Thanks Steve, here is the article:
Heart entering critical stage with human trials
This is the third in a series of articles profiling People to Watch in local business in 1999
by Derek Mellon
Ottawa Business Journal
THEY ARE FACELESS and nameless.
Yet the lucky few who will participate in WorldHeart Corp.'s first human clinical trials are sure to be some of the most-watched people in
Canada's medical and business communities.
By December of this year, Dr. Wilbert Keon, director of the Ottawa Heart Institute, is expected to implant WorldHeart's HeartSaver device into
the first human being.
The HeartSaver weighs 500 grams and is about the size of a hand. It's designed to help those suffering from degenerative heart failure.
The device fits inside the chest and lies next to the heart, where it assists the organ in pumping blood. Contrary to other artificial heart
technology, the HeartSaver leaves no holes or openings in the skin.
A small coil taped to the chest and another coil implanted underneath the skin transmit power from an external battery pack which powers
the device. The battery pack is worn on a belt.
Within 100 days of the first human trial, a verdict should be in -- WorldHeart's technology either works, has some problems or fails.
WorldHeart understands this is a major milestone for the company. From a medical perspective, success would place WorldHeart ahead of
those who are competing to build an artificial heart.
The first set of trials is slated to take place in Ottawa and other cardiac centres across Canada. Similar trials will also be held in Europe, with
hospitals in Germany and Belgium as likely trial centres.
The choice of Canada is obvious, since Ottawa's Keon pioneered the WorldHeart technology. But bypassing the U.S. to focus on Europe is a
strategic move by WorldHeart.
"The need in Canada and western Europe is large and we believe that we will be able to move more quickly through the approval process in
those two countries than we would be able to move through the (Food and Drug Administration) process in the United States," says Rod
Bryden, WorldHeart's ceo. Clinical trials in the U.S. are not expected to begin until late 2000 or early 2001.
WorldHeart cautiously estimates its clinical success rate will be "something better than 50 per cent," though Bryden says he expects
"substantially" better than that.
Nevertheless, Bryden is resigned to the fact that the first trials will not save everyone.
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"Everybody would die without (the HeartSaver) and to give a 50/50 chance would be worth doing ... Nevertheless these people are very ill and
some of them will almost certainly die because they couldn't stand the operation," says Bryden.
WorldHeart has already begun implanting the HeartSaver in calves to see if the device will allow the animals to survive for a minimum of 90
days. If all goes well with the pre-clinical tests, the human trials will begin.
But for WorldHeart, there are business rewards attached to successful clinical trials.
"The results of the trials give the market and all concerned a good idea into the probability of (the HeartSaver) being approved for marketing,"
says Michael Lorimer, equity research analyst with Scotia Capital Markets.
The artificial heart market is estimated to be worth between $10-$15 billion a year, with 94 per cent of that being outside of Canada.
WorldHeart says it will turn a profit of $13 million by 2001.
But approval to sell the device hinges on successful trials.
Already WorldHeart supporters are hinting that early success in the Canadian clinical trials could put pressure on Health Canada to approve
the HeartSaver device sooner rather than later. It's a move which would mean WorldHeart could begin selling its product as early as the
middle of 2000.
Bryden says the early approval scenario is a possibility, even though the company's business plan calls for approval to sell the product to be
granted only by the end of 2000.
"If you have 10 or 20 patients and, of those, two-thirds of them are back to a normal life, are the others who are waiting (for the device) better
served by saying 'we want to wait until we have enough trials to be sure that it works?' Or are they better served by not dying while they wait?
That's an issue that Health Canada will have to address."
WorldHeart's ability to raise capital could also hinge on the success or failure of the trials.
WorldHeart's value has risen from $65 million in December of 1996 to approximately $260 million by the end of last week. But Bryden thinks
there are still a number of investors who are shying away from a stock which, for now, is seen as a venture risk.
Lorimer agrees. He says if WorldHeart can hold out before looking for cash -- and has good news from the clinical trials -- it would reduce its
risk value. Then, it would almost certainly find investors who have "deeper pockets" than those already on board with WorldHeart.
Bryden says successful trials even in the first few weeks will attract a number of funds which, to date, have shied away from investing in
WorldHeart.
Bryden may have a point. qlt Phototherapeutics Inc. of Vancouver saw its stock more than double after successful test results for a new drug
that treats blindness.
WorldHeart also has $15 million in cash and expects to spend just under $12 million by the time the trials begin in December. Bryden says the
company is funded "well into the next year," but adds it won't wait until the last few months to seek more money.
Already, the fact that WorldHeart will begin trials this year appears to be fuelling a spectacular rise in the company's stock price.
Since early January, WorldHeart's share price has skyrocketed from $12 to peak at $26 on Jan. 20 before closing at $20.95 at the end of last
week.
The company also recently named Dr. Gerard M. Guiraudon as its clinical trials director.
But can something go wrong?
Lorimer notes that failures in the late stages of trials generate more attention from investors and the media.
Companies must also deal with the shattered expectations from investors.
Lorimer notes that in the
biotechnology sector, clinical
disappointments have often cut companies' stock prices in half.
But if WorldHeart suffers only minor setbacks, the markets may be patient.
"If there is no outright bad news and (the problem) is something that has been identified and corrected, the market will be somewhat tolerant,"
says Lorimer.
Bryden predicts everything will follow expectations.
"The only factor that would
really cause this corporation to have less access to the capital market would be if we identify some factor in the device which we have to say
causes (the HeartSaver) to fail or causes the patient not to be
properly treated by it and we haven't got a solution. We haven't found any of those and half the world has looked," says Bryden.
Many more people will be
watching WorldHeart as it prepares to proceed with human clinical
trials in early December. |
