the dirty trick continue, page-7

Cannacord?s Jason Mills? Full 4-18-11 HTWR ISHLT Update

Bottom Line: ??our due diligence consistently suggests clinicians who have access to both pumps continue to favor HVAD, given ease-of-implantation advantages primarily, and survival & adverse event profile (namely bleeding) secondarily.?

FULL REPORT 18 April 2011
HeartWare Intl. - Jason R. Mills, Cannacord Genuity
HTWR NASDAQ/$83.91 $1,158M => Buy, Target $115
? Solid HVAD data at ISHLT; reiterate BUY, $115 target
http://www.investorvillage.com/groups.asp?mb=13685&mid=10384596&pt=msg

INVESTMENT RECOMMENDATION
We reiterate our BUY rating on HTWR coming out of the ISHLT meeting, during which important, new data was presented on HVAD from the BTT continuous access protocol (CAP). Importantly, data showed 6-month survival remained outstanding (95% vs. 94% in original cohort).

That said, all (investor) eyes were on adverse event (AE) rate ? namely stroke/thrombus, infection and bleeding. Notably, all were similar in the CAP cohort vs. the original, with a trend toward less bleeding. Overall thrombosis event rate of 7% was down from 9% presented at AHA, but higher than HM2 BTT event rate (~3%), which may give Thoratec (THOR: NASDAQ $27.42 HOLD) an opening to defend HM2 against claims by many that HVAD will expeditiously ramp to #1 share.

That said, based on our due diligence, the totality of the updated HVAD data was favorable to clinicians, and we believe the ?thrombus echo chamber? that has resulted in the recent pullback in HTWR shares will dissipate in coming weeks. We remain bullish about long-term LVAD growth potential, and maintain our long-term share expectations, which models HTWR attaining #1 overall share by 2015.

INVESTMENT HIGHLIGHTS
? Survival data. CAP (n=110) patient survival at 6 mos. was 95% vs. 94% in ADVANCE (n=140). At 360 days, CAP survival was 92%, vs. 88%. Both are higher than any LVAD BTT trial to date.
? Device exchange. 8 addl. patients required device exchange due to thrombus, compared to 3 in the original cohort, as certain centers did not follow recommended aspirin dosage, according to co-PI Dr. Slaughter. To wit, in a cohort of 73 patients who received 350mg, thrombus event rate declined to 2%, and did not result in higher bleeding or hemorrhagic stroke events. Further evidence of this aspirin correlation will be important to investors, in our view.
? Clinician feedback ? positive for HVAD. While the aspirin analysis was interesting (and could prove to be very important to HVAD?s treatment protocol long-term), we suspect it may not completely ameliorate the bearish ?echo chamber? created by some investors as it relates to the thrombus-event profile of HVAD vs. HM-II, given that it was a retrospective analysis and includes just 47 patient years worth of experience vs. 119 in the low-dose aspirin group. With that said, the preponderance of feedback we got from clinicians with whom we have spoken in the past few weeks suggest that the HVAD thrombus rate is not dissimilar from HM-II and, contrary to commentary from the bears, we do not get any sense that clinicians will alter their use of HVAD based on reported adverse event profile.

In fact, our due diligence consistently suggests clinicians who have access to both pumps continue to favor HVAD, given ease-of-implantation advantages primarily, and survival & adverse event profile (namely bleeding) secondarily.
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I. HTWR?s 4-15-11 ISHLT?11 Investor Breakout Session ? AUDIO WEBCAST Replay
Friday, April 15, 2011 7:00pmET (1:38)
=> CEO Doug Godshall, Dr. Mark Slaughter, Dr. Thomas Krabatsch, Q&A
IR Home: http://ir.heartware.com/phoenix.zhtml?c=187755&p=irol-irhome
Webcast: http://ir.heartware.com/phoenix.zhtml?p=irol-eventDetails&c=187755&eventID=3961133
Direct: http://viavid.net/dce.aspx?sid=0000846B (1:38)

II. SLIDES from Dr. Mark Slaughter?s 4-15-11 ISHLT?11 HVAD Presentation are available here:
?Dr. Mark Slaughter Presents Addl. Data from BTT Trial and CAP Patients?
http://www.heartware.com.au/IRM/content/usa/clinicians_clinicaltrial.html
PDF (19pgs): http://www.heartware.com.au/IRM/Company/ShowPage.aspx?CPID=1533&EID=96629126
?or: http://www.connect4.com.au/fcas/casdeliver.cgi?img=01171978
4-15-11 PR: http://ir.heartware.com/phoenix.zhtml?c=187755&p=irol-newsArticle&ID=1551135