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Biotech / Medical : World Heart Corp - WHRT and TSE/WHT -- Ignore unavailable to you. Want to Upgrade?

To: kidl who wrote (179)	1/19/1999 8:47:00 AM
From: Steve Bevington	Read Replies (1) \| Respond to of 500

From today's Ottawa Citizen...(also received a mention in The Globe & Mail) ___________________________ Tuesday 19 January 1999 Investors flock to WorldHeart as stock jumps Price continues meteoric rise even as firm predicts loss Bert Hill The Ottawa Citizen <Picture>The Ottawa Citizen / WorldHeart Corp. Share prices WorldHeart Corp. stock jumped 20 per cent yesterday, continuing a market surge that has doubled the stock price in only 11 days of trading since the start of the new year. The stock closed at $23 yesterday with no specific reason to explain the sharp increase in stock value but plenty of questions from investors, analysts and the media. In the past week WorldHeart has become a classic momentum play for short-term day stock traders looking for quick gains. With no competition on U.S. exchanges, which were closed yesterday, investors fought it out on the Toronto Stock Exchange for the relatively few shares available of a thinly traded stock. WorldHeart is developing an implanted medical device that could keep diseased hearts of millions of people working without wires penetrating the chest cavity. The device has worked in testing on calves but still has to pass the biggest hurdle, human tests, before it is cleared for sale. The share-price explosion triggered pressure on the company to make a statement. Ian Malone, vice-president of finance, said there were no new developments to explain the sudden increase. He said the company is not involved in negotiations with any major drug company or other partners to finance the human testing of the company's artificial heart device. And he said there have been no sales this month by the major insider investors, who control about 60 per cent of WorldHeart stock. "If I knew how to predict events like this, my job would be much easier," Mr. Malone said. In response to a request from the Toronto Stock Exchange, the company released preliminary financial results for 1998 and its outlook for 1999. The anticipated losses of $3.7 million, or 30 cents a share, were in line with analyst estimates and the anticipated expenditures of $12 million, or $1 a share, were slightly higher than anticipated. The company is not expecting any significant sales revenues this year to offset the testing costs. It has already said it has sufficient financing to cover these costs. The impact of day traders, who make frequent, low-cost trades via the Internet, was obvious: WorldHeart stock rose from $20 to $26 in slightly more than two hours of hectic morning buying before speculators started cashing in profits in the early afternoon. Almost 100,000 shares changed hands, a 12-month daily high for the company but only a tiny percentage of the company's 12.2 million shares. WorldHeart is gaining credibility with U.S. investors through the promotional efforts of company executives and increasing coverage in U.S. business publications. It won a listing on the key Nasdaq exchange last month, a move that opens the doors to more U.S. technology investors. Mike Lorimer, the analyst with Scotia Capital Markets, said WorldHeart is on a roll because it now offers investors the hope of making a big gain within a 12- to 24-month period. He said many investors, particularly high-income people with a sophisticated knowledge of the market, "are willing to take a risk, provided they get a well-defined set of events to base it on." WorldHeart helped provide that schedule last week when it announced the appointment of a top medical expert to supervise clinical human testing scheduled to start late this year. "Investors know that once human testing starts, they should know within about 100 days whether the product works or does not," Mr. Lorimer said. In a report in November, Mr. Lorimer warned investors that the stock carries a high risk along with the implicit recommendation to buy. He put a 12-month target price on the stock of $24. WorldHeart said yesterday that the final phase of testing with calves started this month, about three weeks behind schedule. It said the delay is not expected to materially delay the timing of human implant testing later this year. Mr. Lorimer said WorldHeart probably also got an assist from investors in other heart device products who are now hedging their bets by buying the stock. Thoratec Laboratories, a California company that is competing with WorldHeart, jumped 25 per cent last week after it announced a financing and distribution deal with Guidant Corp., a major pharmaceutical industry player. Canadian investors might also be feeling more positive about high-risk biomedical stocks after the recent price explosion of QLT Phototherapeutics Inc. of Vancouver. The stock more than doubled in value after the company announced successful test results in mid-December of a new drug that treats a leading cause of blindness in people over the age of 50.