Medical Device Link.

Originally Published MX September/October 2005

COVER STORY

Since Thoratec Corp.'s 2001 merger with Thermo Cardiosystems, a Massachusetts-based manufacturer of cardiac-assist, blood-coagulation testing, and skin-incision devices, the company has risen to become a world leader in products to treat cardiovascular disease.

Sales of cardiac-assist devices in particular have been driving Thoratec's overall revenue this year, and the company continues to pour much of that money back into developing its future.

Share price for Thoratec Corp. (Pleasanton, CA), August 2003-July 2005 versus the S&P 500 index. (click to enlarge)

For its second quarter ended in June, Thoratec reported net income of $2.4 million on product sales of $47.6 million, compared with income of $207,000 on sales of $40.6 million in the year-ago period.

The 17% overall sales increase was driven, the company reports, by a 23% growth in sales of its ventricular-assist devices (VADs).

International Technidyne Corp.—Thoratec's wholly owned subsidiary that manufactures hemostasis management and point-of-care testing devices—turned in sales growth of 7% over last year's second quarter.

In 2001, Thoratec's research and development expenses accounted for almost 20% of the company's $113.4 million in sales. Even now that the company's sales are on the rise, it continues to reinvest a large chunk of this money in R&D.

In the second quarter of 2005, the company spent $7.9 million on R&D, or almost 17% of its product sales. Year-to-date, the company has spent 16% of its $98.1 million in product sales (compared with $83.4 million in sales in the first six months of 2004) on R&D.

In 2004, the company delivered sales of $172.3 million, with reported net income of $3.6 million. R&D costs amounted to $28.7 million, or 17% of the company's revenue.

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