March 20, 2009 ARTIFICIAL heart maker Ventracor's decision to...

March 20, 2009

ARTIFICIAL heart maker Ventracor's decision to enter voluntary administration yesterday has dealt a body blow to the life science sector.

The company said "exhaustive efforts" to seek capital to fund its operations through to June 30 had failed, despite the success of its VentrAssist device in clinical trials.

Ventracor's shares have not traded since February 6 when the company requested a halt pending an announcement about a possible finance deal.

Days later it requested the stock be suspended from quotation and said administrators would be called in if funding could not be found.

The hunt for a suitor to buy the company outright had begun in earnest in December.

Chairman John Ward said yesterday the decision to enter administration was made with "a deep sense of sadness and regret".

The global credit crunch has strangled funding in the life science sector, threatening the end for many cash-strapped biotechs, some of which are close to commercialising.

A spokeswoman for Ventracor said the company could not elaborate on its hope that the administrators -- Steven Sherman and John Gothard of Ferrier Hodgson -- would succeed in "enabling commercialisation of the VentrAssist device".

"Now that the company is in the hands of the administrator, we are not able to comment on any Ventracor matters," the spokeswoman said.

The device, which helps to extend the lives of patients with severe heart problems, is believed to have been between six and 12 months away from the market.

Bioshares analyst David Blake said Ventracor shareholders would be asking why the board had not "read the signals earlier".

"There will be a lot of investors crying into their beer over this one," Mr Blake said.

Biotech Daily editor David Langsam said the appointment of administrators had not surprised him.

"The fact it has gone into voluntary administration is unfortunate, but for the last year or so it hasn't been an investment for the faint-hearted," Mr Langsam said.

"We have consistently said the demise of Ventracor would be damaging to the sector because the company has spent so long developing an Australian device in use around the world and any failure of a major medical device company reflects on the whole sector.

"I've always said that I would not invest $2000 in Ventracor, but I would have invested $12 million to take the heart pump all the way through to US registration because that might have made a significant difference."

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