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Biotech / Medical : World Heart Corp - WHRT and TSE/WHT
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To: Ducks who wrote (358)2/5/2000 10:12:00 AM
From: Dan Hamilton   of 500
 
Ducks, you asked for my opinion - here it is.

I continue to believe in the long term potential of the HeartSaver VAD, and everyone on this thread knows I have been long on the stock for years.

However, there still exists considerable risk and uncertainty in World Heart's ability to deliver this technology on a timely basis, if at all. (Just reread Mindshare's excellent posts on this thread.) That is why the market has discounted the stock so far.

I believe the battery problem last year provided an opportunity to delay the schedule while they also sorted out a number of issues unrelated to the battery. Total delay 6 months. Not surprising when you consider the magnitude of the challenge of perfecting this technology. Others have spent hundreds of millions and failed.

So here we are on February 5.

Merrill Lynch issues a strong buy on the stock. Great news for all shareholders, but it does not change the company or its product one iota.

This is followed by an announcement after market close that they have lost the first round of a lawsuit to protect their TET technology. As I said before, probably this in itself is not a big deal and doesn't hinder them at all in continuing to develop the HeartSaver. But it does potentially mean they have lost one PROPRIETARY advantage over competitors. With further delays in the development schedule it means other competitors have an improved chance to catch up.

Which brings us to the calf trials. The company is in a position where it has an obligation to shareholders to disclose material changes. This is made even more neccessary by the timing on the Merrill recommendation. World Heart has previously stated the first human implant will occur in 2Q 2000. We can all "do the math", so we know it will not happen in 2Q 2000. When will the company announce this? I expect soon; very soon.

Again, delays are to be expected in this kind of development project. However, so are ups and downs in the stock price as the market digests each new piece of information.

I lightened my position on Friday with the expectation there will be a downtick following the news. I plan to buy again once it becomes clear what the reasons are for the delay, and what is the new (projected) timeline.

I'm not a trader by nature either, but I hate to leave money on the table.

BWDIK, IMHO yada yada...

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