Market & Competition
Heart failure is a major cause of death throughout the world, and is associated with a high rate of morbidity and a lower quality of life than that of patients suffering from any other chronic disease. More than 10 million people suffer from heart failure worldwide. In the US alone, approximately 5 million people suffer from heart failure with more than 500,000 new diagnoses each year. Approximately 10% of heart failure patients, approximately 1 million, are at the end stage of the condition; these patients are considered Class IV heart failure patients per the New York Heart Association guidelines. HeartWare® estimates that each year approximately 100,000 Class IV patients worldwide might benefit from a left ventricular assist device (LVAD), such as the HeartWare® Ventricular Assist Device (HVADTM). The market for LVADs is increasing enormously each year, at a compound annual growth rate of 29.6% for 2010-2015, details in Table 1.
LVADS are used for two primary purposes when treating heart failure patients: bridge-to-transplant therapy (BTT) and destination therapy (DT). BTT refers to the temporary use of an LVAD while awaiting transplantation, whereas DT refers to the permanent or quasi-permanent use of an LVAD. While BTT patients account for the vast majority of the currently treated population, DT is the long-term goal and accounts for the majority of the prospective market. As such, HeartWare®'s primary emphasis is on DT; however, regulatory approval for BTT is an important interim step.
It is estimated that the market for heart failure patients worldwide who do not qualify for transplantation and would require destination therapy is as large 100,000 new patients annually. The eventual potential market is enormous, with more than 500,000 new cases of heart failure alone diagnosed in the U.S. each year. Assuming device pricing of US$70,000, HeartWare® estimates the total available destination therapy market to exceed US$7 billion.
According to HeartWare® estimates there are approximately 3,000 heart transplant procedures conducted each year. As not all transplant list patients will require a device, HeartWare’s total available BTT market is approximately US$150 million. HVADTM is designed for ease of implantation, HeartWare® expects that general cardiac surgery hospitals will be able to conduct the procedure, thereby providing access to the broadest possible end-stage heart failure market. The MVADTM device is expected to broaden HeartWare®'s target market to include NYHA Class III patients, estimated to represent a further 250,000 patients.
The market strategy of HeartWare® has not changed significantly since its Initial Public Offering (IPO) in 2005. Overall, their strategy was to obtain regulatory approval for their HVADTM technology, while maintaining research and development for next generation products. They sought regulatory approval in Australia and Europe...