“We launched an initiative to
explore emerging therapies that
represent new approaches to the
treatment of heart failure.”

Milestones in Product Development
During the year, we continued our track record of getting products to market with FDA approval of the Thoratec IVAD (Implantable VAD). This approval followed a very successful clinical trial that involved more than 2,400 patient days of cumulative support without any device failures.

We launched our U.S. sales effort for the IVAD in the fourth quarter. Initial market response to the device, along with the TLC-II Portable VAD Driver that was approved for use outside the hospital at the end of 2003, furthered our position as having the broadest product portfolio in the industry and contributed to incremental market expansion.

One of the most exciting developments in 2004 was the initiation and completion of our promising HeartMate II Phase I clinical trial. This device represents a major step forward in next-generation technology and is designed to support patients for five years or longer.

We were encouraged to learn of dramatic reductions in surgical and recovery times with this ground-breaking device, and we were pleased to hear from clinicians that many patients have been living comfortably at home. In fact, as of early 2005, our first patient in the trial had been supported by the device for more than 15 months and has resumed many normal activities.

In February 2005, the FDA gave approval for our Phase II pivotal study. This Phase II study for the HeartMate II will include a number of first-time elements, including both a Bridge-to-Transplantation and Destination Therapy arm—the first time both classes of patients have been included in a device trial. The innovative and unique elements of this trial signal the importance of this study, and were made possible by the Company’s significant historical data, experience and expertise.

While the first FDA approval of this device in the U.S. is not likely until at least late 2006, its performance to date offers the promise of a heart failure therapy that might be indicated for many more patients than our currently approved devices. In the meantime, we filed for European approval in March 2005 and hope to begin marketing the device there by the end of the year or in early 2006.

To ensure that we maintain our leadership position, we launched an initiative to explore emerging therapies that represent new approaches to the treatment of heart failure. Our first visible effort in this area was our equity investment in BioCardia, Inc., which is developing tools for the delivery of cellular and other biotherapeutic agents directly to the heart. We believe that there will be a meaningful opportunity to combine these and other pharmalogic agents with our VADs in treating a certain segment of the heart failure population in whom full recovery of their heart might be a realistic option.

Growth at ITC
Our ITC division continued its excellent performance in 2004 and is contributing increasing value to the Company. We are benefiting from underlying market growth for quick and accurate patient information at the point of care, such as the operating room and doctor’s office, or even at home. By having nearly instantaneous and accurate analysis, clinicians are able to act on a patient’s condition immediately, rather than waiting for results from a central laboratory.

© 2005 Thoratec Corporation
Design: Howry Design Associates SF/CA