EXHIBIT 99.1
News Release
For Immediate Release
WorldHeart Announces First Quarter 2005 Financial Results
Reports Record Quarterly Revenues
Oakland, CA, USA - April 27, 2005: (NASDAQ: WHRT, TSX: WHT) - World Heart
Corporation ("WorldHeart" or the "Company"), a global technology leader in
mechanical circulatory support systems, today reported its first-quarter results
for the period ended March 31, 2005.
Summary financial statements are included with this release. WorldHeart's
financial statements have been prepared in accordance with generally accepted
accounting principles in the United States and are presented in U.S. dollars.
2005 First Quarter Financial Results
WorldHeart recorded revenues of $3.4 million in the first quarter of 2005 which
is an increase of $1.2 million, or 56%, over the revenues reported in the first
quarter of 2004 and a sequential increase of $400,000, or 14%, over the revenues
recorded in the previous quarter.
This represents record quarterly revenues for WorldHeart and is the third
consecutive quarter that revenues have increased.
In the first quarter of 2005, WorldHeart recognized revenue on 32 implant kits
as compared to 26 implant kits in the same quarter in 2004 and 35 implant kits
in the fourth quarter of 2004.
Gross margins for the first quarter of 2005 totaled $1.3 million, or 38% of
sales. This compares to a gross margin of $1.0 million, or 46% of sales, in the
first quarter of 2004. Margins continue to be impacted by variances associated
with production levels under capacity and are expected to continue to improve as
production volumes increase. The net loss for the first quarter of 2005 was $3.9
million, or $0.24 per share, as compared to a net loss of $3.5 million, or $0.23
per share, in the first quarter of 2004. The net loss of $3.9 million includes
non-cash interest charges of approximately $350,000 associated with the
accretion of interest associated with WorldHeart's convertible debentures as
well as the non-cash amortization of intangibles and non-recurring restructuring
costs which together total approximately $250,000.
WorldHeart ended the first quarter of 2005 with cash and cash equivalents of
$4.5 million. As has been announced previously, WorldHeart has agreed to
purchase the assets of MedQuest
Products, Inc. ("MedQuest"), which is in the late development stages of a
magnetically-levitated, centrifugal flow rotary ventricular assist device
("VAD"), and to complete a $23 million financing transaction consisting of a
private placement and the voluntary exercise of existing shareholder warrants.
This transaction is subject to WorldHeart shareholder and regulatory approval,
which is expected to be received in the second quarter of 2005.
RELIANT Trial Update
To date, WorldHeart has enrolled fourteen clinical centers and nine patients in
the RELIANT trial. Several other centers are well into the process of completing
their institutional review processes.
"We expect that once twenty centers are enrolled, we will have reached a
critical point at which patient enrollment will be more predictable and implants
will take place at a higher rate", commented Jal S. Jassawalla, who became
WorldHeart President and CEO in July, 2004. Total center enrollment in the study
is expected to be between thirty and thirty-five U.S. centers."
In April 2005, WorldHeart hosted an international Novacor Users' Meeting and a
RELIANT Investigators' Meeting in Philadelphia, preceding the International
Society for Heart and Lung Transplantation (ISHLT) Annual Meeting.
"We are pleased with the attendance of over 45 clinical centers at our Users'
and RELIANT Investigators' Meeting", commented Piet Jansen, MD, WorldHeart's
Chief Medical Officer. " There is strong interest in our RELIANT trial which
evaluates the Novacor LVAS for Destination Therapy, an important area of
clinical need for advanced heart failure patients."
ISHLT Annual Meeting
In addition, at the ISHLT Meeting, results with the Novacor(R) LVAS were
presented by clinical centers in the areas of long-term patient support
(exceeding four years), improvements in renal function and improved outcomes
with the ePTFE inflow conduit.
Product Platform Update
"We believe that the mechanical circulatory support market will require both
pulsatile and rotary next-generation systems. Pulsatile devices are best suited
for end-stage patients with poor ventricular contractility, who require full
support or functional "replacement"; rotary devices are better suited for
late-stage patients, with some contractility, who require only partial support
or assist", commented Mr. Jassawalla.
WorldHeart believes that it is the only mechanical circulatory support company
with both pulsatile and rotary devices under development. Its current and
prospective product platform includes:
o The Novacor LVAS pulsatile device which is a leader in terms of
reliability and long-term durability and is commercially available as
a Bridge-to-Transplant in the US,
Canada, the European Union and Japan. In Europe, it is also
commercially available for Destination Therapy ("DT") and
Bridge-to-Recovery. In the US, it is under evaluation in a pivotal
study for DT (RELIANT trial);
o The next-generation pulsatile VAD (Novacor II) under development, is a
small, bearingless and pulsatile VAD. Development is proceeding as
planned, with animal implants expected to begin by year-end; and
o The HeartQuest VAD, under development, is a small, next-generation
rotary pump currently in preclinical animal and bench testing and is
expected to commence initial feasibility clinical trials by the
beginning of 2006.
"We have made significant progress in each of the last three quarters in three
key areas", commented Mr. Jassawalla. "Our sales revenues have increased
steadily in each quarter, we have enrolled fourteen centers in the RELIANT
Trial, with several others in the pipeline. Finally, with the planned
acquisition of MedQuest, we are broadening our product platform to address the
full spectrum of clinical needs of end-stage and late-stage heart failure
patients. The current Novacor LVAS with its reliability and long-term durability
and our next-generation pulsatile, Novacor II, and the acquisition of a rotary
VAD system, position us well to serve the growing need for Destination Therapy."
WorldHeart will hold a teleconference today at 11:00 a.m. EDT. The
teleconference can be accessed domestically by calling 1-800-814-4890 and
internationally by calling 416-640-4127. Please dial in ten to fifteen minutes
prior to the beginning of the call. A replay will be available starting at 2:00
pm (EST) today through Wednesday, May 4, 2005, 11:59 pm (EST) and can be
accessed at 877-289-8525 and entering pass code 21122250#.
About Novacor(R)LVAS:
The Novacor LVAS, a pump implanted alongside the patient's own heart to take
over a large portion of the workload of the natural heart, supports end-stage
heart failure patients. It is an electrically powered, pulsatile flow device
with 20 years of clinical use. The Novacor LVAS has unprecedented reliability
and durability. It is the first ventricular assist device to provide a recipient
with more than 6 years of circulatory support and continues to hold the industry
record for longest support on a single pulsatile device, over 4.75 years. To
date, more than 1,600 patients have been supported with the Novacor, with over
600 patient-years of experience and no deaths attributed to device failure.
The Novacor LVAS is commercially approved as a bridge to transplantation in the
U.S. and Canada. In Europe, the Novacor LVAS has unrestricted approval for use
as an alternative to transplantation, a bridge to transplantation, and to
support patients who may have an ability to recover the use of their natural
heart. In Japan, the device is commercially approved for use in cardiac patients
at risk of imminent death from non-reversible left ventricular failure for which
there is no alternative except heart transplantation.
About World Heart Corporation:
World Heart Corporation is a global medical device company headquartered in
Oakland, California, USA with an additional facility in Heesch, Netherlands.
WorldHeart's registered office is Ottawa, Ontario, Canada.
Any forward-looking statements in this release are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that all forward-looking statements involve risk and
uncertainties, including without limitation, risks in product development and
market acceptance of and demand for the Company's products, risks of downturns
in economic conditions generally, and in the medical devices markets, risks
associated with costs and delays posed by government regulation, limitations on
third-party reimbursement, inability to protect proprietary technology,
potential product liability and other risks detailed in the Company's filings
with the U.S. Securities and Exchange Commission.
Contact Information:
World Heart Corporation
Peggy Allman
(510) 563-4721
www.worldheart.com
WORLD HEART CORPORATION
Consolidated Balance Sheets
(United States Dollars)
- ------------------------------------------------------------------------------------------------------------
March 31, December 31,
2005 2004
- ------------------------------------------------------------------------------------------------------------
(Unaudited) (Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 4,536,861 $ 3,818,767
Short-term investments - 4,999,034
Trade and other receivables 4,137,000 4,238,049
Prepaid expenses 991,467 575,261
Deferred transaction and financing costs 330,247 -
Inventory 8,453,189 8,112,525
------------------------------------
18,448,764 21,743,636
Long-term receivable - 318,553
Cash pledged as collateral for lease 750,000 750,000
Capital assets 1,937,490 2,011,586
Goodwill 17,179,643 17,179,643
Intangible assets 127,498 255,012
------------------------------------
$ 38,443,395 $ 42,258,430
------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 4,234,969 $ 3,854,833
Taxes payable 744,000 832,000
Accrued compensation 744,249 1,343,364
Deferred revenue 1,702,163 1,607,622
------------------------------------
7,425,381 7,637,819
Convertible debentures 7,473,840 8,177,140
Long-term obligation 8,830 16,368
------------------------------------
14,908,051 15,831,327
------------------------------------
Shareholders' equity
Common shares 215,740,523 214,616,061
Issued and outstanding - 17,101,359 common shares
(December 31, 2004 - 15,744,522 common shares)
Additional paid-in capital 11,377,442 11,451,267
Cumulative other comprehensive income (6,285,577) (6,285,577)
Accumulated deficit (197,297,044) (193,354,648)
------------------------------------
23,535,344 26,427,103
------------------------------------
$ 38,443,395 $ 42,258,430
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WORLD HEART CORPORATION
Consolidated Statements of Operations and Accumulated Deficit
(United States Dollars)
- ------------------------------------------------------------------------------------------------------------
Three months ended
March 31, March 31,
2005 2004
- ------------------------------------------------------------------------------------------------------------
(unaudited) (unaudited)
Revenue $ 3,416,988 $ 2,192,343
Cost of goods sold (2,111,702) (1,178,397)
-------------------------------------
Gross margin 1,305,286 1,013,946
-------------------------------------
Expenses
Selling, general and administrative (3,445,829) (3,035,445)
Research and development (1,187,558) (1,345,568)
Restructuring costs (129,498) -
Amortization of intangibles (127,514) (129,166)
-------------------------------------
(4,890,399) (4,510,179)
-------------------------------------
Loss before the under noted (3,585,113) (3,496,233)
Other income (expenses)
Foreign exchange loss (24,372) (100,467)
Investment income 20,026 90,797
Interest expense and financing costs (352,937) (3,704)
-------------------------------------
Net loss for the period (3,942,396) (3,509,607)
Accumulated deficit, beginning of the period (193,354,648) (167,212,850)
-------------------------------------
Accumulated deficit, end of the period $ (197,297,044) $ (170,722,457)
=====================================
Weighted average number of common shares outstanding 16,556,950 15,117,096
=====================================
Basic and diluted loss per common share $ (0.24) $ (0.23)
============================================================================================================
WORLD HEART CORPORATION
Consolidated Statements of Cash Flow
(United States Dollars)
- ------------------------------------------------------------------------------------------------------------
Three months ended
March 31, March 31,
2005 2004
- ------------------------------------------------------------------------------------------------------------
(unaudited) (unaudited)
CASH FLOWS FROM (USED IN)
Operating activities
Net loss for the period $ (3,942,396) $ (3,509,607)
Items not involving cash -
Amortization 294,522 325,840
Issuance of options and warrants for services
and financing costs - 8,201
Interest and accretion on convertible debentures 347,322 -
Unrealized foreign exchange loss 97,547 123,345
Change in operating components of working capital (971,549) (4,189,108)
-------------------------------------
(4,174,554) (7,241,329)
-------------------------------------
Investing activities
Redemption of short-term investments 4,999,034 11,504,032
Purchase of capital assets (92,912) (34,251)
Cash pledged as collateral for lease - (222,003)
-------------------------------------
4,906,122 11,247,778
-------------------------------------
Financing activities
Common shares issued through exercise of warrants - 1,499,404
-------------------------------------
- 1,499,404
-------------------------------------
Effect of exchange rate changes on cash and cash equivalents (13,474) 27,929
-------------------------------------
Change in cash and cash equivalents for the period 718,094 5,533,782
Cash and cash equivalents, beginning of the period 3,818,767 6,337,677
-------------------------------------
Cash and cash equivalents, end of the period $ 4,536,861 $ 11,871,459
============================================================================================================
- ------------------------------------------------------------------------------------------------------------
Supplementary Cash Flow Information Three months ended
March 31, March 31,
2005 2004
- ------------------------------------------------------------------------------------------------------------
(unaudited) (unaudited)
Convertible debentures settled with the issuance
of common shares $ 1,679,461 $ -
Accrued interest on convertible debentures
settled with the issuance of common shares $ 19,977 $ $ -
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