Investor Oracle Urges Heart-Pump Maker Thoratec to Seek Bid From Buyers
Thoratec Corp. (THOR), the maker of an implantable heart pump, should seek buyers in an auction, Oracle Investment Management Inc., the company’s fifth-largest shareholder, said in a letter to the board.
Thoratec could increase market share for its heart devices if it were acquired by a larger medical technology company, according to the letter from Larry Feinberg, managing member of Greenwich, Connecticut-based Oracle. The letter called recent growth for the Thoratec’s heart pumps “unsatisfactory” and said the Pleasanton, California-based company hasn’t meaningfully expanded its market share in Europe.
“Thoratec is unable to maximize shareholder value as an independent company,” Feinberg said in the letter. “We believe that an auction process would be the most effective means to find a suitable acquirer and urge the board of directors to take action now to retain an independent investment bank to maximize shareholder value.”
Thoratec was a pioneer in the development of so-called left-ventricular assist devices. It sells the HeartMate pump, designed to help assist in taking over the workload for a failing heart. The market for such devices may grow to 10,000 implants in 2015 from 4,000 in 2010, the Oracle letter said. In the third quarter of 2011, Thoratec revenue increased 13 percent to $102.6 million from the period a year earlier.
Thoratec didn’t immediately return calls for comment on Oracle’s letter. Oracle also didn’t return a call seeking comment.
Oracle owned 2.82 million shares of Thoratec, or 4.7 percent of the company, as of Sept. 30, according to Bloomberg data.
Thoratec gained 4.2 percent to $32.30 at 6:13 p.m. New York time in extended trading after rising 1.9 percent to $31.01 at the close. The company’s shares have increased 9.5 percent this year.
Thoratec ended a proposed merger with its chief rival, Framingham, Massachusetts-based HeartWare International Inc. (HTWR), in July 2009 after U.S. regulators said they would challenge the deal.
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