World Heart Corp                                                        WHT
Shares issued 14,078,743                                Jul 21 close $15.00
Thu 22 Jul 99                                                  News Release
Dr. Tofy Mussivand reports
The second quarter saw significant advances by World Heart  Corporation  in
bringing  Heartsavervad  to  initial  clinical  use  and  in developing the
strength and capabilities of the corporation. With six months remaining  in
this  millennium,  the objective of implanting the first Heartsavervad in a
human during 1999 continued to be achievable. However, on July  16,  during
internal  performance  testing,  a  reliability  issue arose respecting the
battery currently intended for use with the device. Full assessment of this
issue is being undertaken by World Heart and the battery supplier. In light
of the time required to complete this assessment and fully test any changes
in  the battery, it is likely that preclinical trials will not be completed
in time for clinical use of Heartsavervad this year.
Operating  financial  results  for  the  quarter  were  again  better  than
forecast,   with   no  revenues  reported  and  expenses  below  budget  by
approximately $396,000. The net loss for the quarter was $2,199,016, or  16
cents  per  share,  compared with $922,671, or nine cents per share for the
second quarter of 1998. As budgeted, research and development expenses  for
the  quarter,  reflecting the costs of prototype production and preclinical
trials, were $1,296,910 compared with $211,664 for the second quarter  last
year.
The financial condition  of  the  corporation  was  strengthened  with  net
proceeds  of  $26.5-million from the sale of 1,780,548 shares from treasury
at $16.50 per share. At end of the quarter cash and securities held by  the
corporation totalled $36,381,913. Total cash usage for the first six months
of the  year  was  approximately  $5.5-million,  and  is  projected  to  be
approximately  $10-million  for the second half. The projected cash balance
of approximately $26-million entering  2000  is  expected  to  finance  the
corporation well into 2001.
Dr. Tofy Mussivand, president of World Heart, said: "Overall, activities in
the  quarter  added  to  our  confidence  in  the success of Heartsavervad.
Although first human use will  not  likely  occur  this  year,  we  do  not
anticipate  delays,  which would be material in the timing of completion of
clinical trials or commercial introduction of the product."
The program to complete preparations for clinical  trials  progressed  well
during   the  quarter.  Seven  in  vivo  performance  tests  of  the  final
preclinical system were conducted bringing the total of such  tests  to  12
for  more  than  70  hours  of  run  time.  The  decision was made to group
long-term formal trials in the third and fourth quarters, resulting in  the
two  long-term  trials  that  had  been  forecast for the quarter not being
performed. The absence of these trials during the second quarter  does  not
affect  the  timing  of  completion of the preclinical trials. These trials
will be completed 90 days following the final in vivo preclinical  implant.
To  provide  added  flexibility  in  managing  the  timing of these trials,
additional preclinical trial centres were  added,  bringing  the  total  to
nine.  With  timely  availability  of systems during the third quarter, and
subject to the battery review now under way, the preclinical trial  program
can be completed in the fourth quarter.
An additional 12  preclinical  systems  were  manufactured  bringing  total
preclinical  systems  to  23.  These  were subjected to a range of in vitro
tests including more than 32 weeks of cumulative run  time.  Six  of  these
systems  were implanted for in vivo performance tests. A further 20 systems
were in various stages of manufacturing at the end of  the  quarter.  These
systems,  together  with  the  systems built during the second quarter, are
expected to be available for use in the preclinical trials program.
The in vivo performance  tests  provided  satisfactory  results  respecting
evidence  of  the  efficacy  of  the  Heartsavervad  system.  The system is
designed to support the patient's natural heart by replacing part or all of
the  pumping  capacity of the left ventricle. In vivo tests indicated blood
flow rates of more than 10.5  litres  per  minute  from  the  device.  This
comfortably  exceeds  the  maximum  capacity  of  eight  litres per minute,
currently accepted as a guideline.
A key factor in  the  success  of  Heartsavervad  is  minimization  of  any
thrombogenic  effect  of  the device, potentially permitting operation with
little or no continuing use of anticoagulant.  In  vivo  tests  during  the
quarter  demonstrated the best results yet achieved in this regard. Earlier
prototypes had performed satisfactorily, however,  a  number  of  technical
improvements  in  the  manufactured  product appear to have further reduced
risks of thrombosis.
Operation of transcutaneous energy and information transfer  (TEIT)  system
was  tested  in the in vivo performance tests. Initial tests in this series
indicated a need for increased strength of the communication signal between
the  internal  electronics  of  the  device  and  the  external controller.
Technical adjustments were made followed by a  series  of  in  vivo  tests,
which produced satisfactory results from the TEIT. The corporation believes
that this is the only VAD,  which  is  powered,  monitored  and  controlled
remotely without perforation in the skin and tissue. During the quarter the
corporation agreed to supply, subject to the appropriate  propriety  rights
and  confidentiality agreement, a TEIT system to Baylor College of Medicine
for use in the college's research and development activities.
The  second  quarter  test  program  identified   eight   items   affecting
operational  reliability  or  convenience of implantation requiring further
improvement. Action on each of these items was in process at the end of the
second  quarter.  Technical  adjustments are being made to existing devices
and those in process.
Preparation of preclinical and clinical protocols  proceeded  according  to
plan.  Manufacturing  staff increased by eight people, engineering by three
and regulatory affairs by one person.
WARNING:   The   company   relies   upon    litigation    protection    for
"forward-looking" statements.
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