ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read
together with our unaudited interim condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. Certain abbreviated key terms have the meanings defined elsewhere in this Quarterly Report
on Form 10-Q.
a medical device company that develops and manufactures miniaturized implantable heart pumps, or ventricular assist devices, to treat patients suffering from advanced heart failure.
The HeartWare® Ventricular Assist System (the HVAD® System), which includes a ventricular assist device (VAD),
or blood pump, patient accessories and surgical tools, is designed to provide circulatory support for patients in the advanced stage of heart failure. The core of the HVAD System is a proprietary continuous flow blood pump, the HVAD Pump, which is a
full-output device capable of pumping up to 10 liters of blood per minute. The HVAD System is designed to be implanted adjacent to the heart, avoiding abdominal surgery, which is generally required to implant similar devices.
In November 2012, we received approval from the United States Food and Drug Administration (FDA) for the HVAD System as a bridge
to heart transplantation in patients with end-stage heart failure. The HVAD System has been available in the European Union since receiving CE marking in 2009. In May 2012, we received an expanded European label for long-term use of the HVAD System
in all patients at risk of death from refractory, end-stage heart failure. As of September 30, 2015, there have been approximately 9,000 implants of the HVAD System in patients at over 290 health care sites in 47 countries.
We also intend to seek an expanded indication for the HVAD System in the U.S. to include destination therapy. In May 2012, we completed
enrollment in our ENDURANCE destination therapy clinical trial. Each trial patient has now been followed to the primary endpoint of two years, and will be followed for a subsequent five-year period post-implant. On August 27, 2013, the FDA
approved a supplemental Investigational Device Exemption trial (ENDURANCE2) allowing us to commence enrollment in an additional patient cohort for the ENDURANCE clinical trial. ENDURANCE2 studies the benefits of blood pressure management
to reduce neurological events. Enrollment commenced in October 2013 and was completed in August 2015. Patients have been, or will be, followed for 12 months after implant. In 2016, we intend to incorporate the data from both ENDURANCE2 and
ENDURANCE into an anticipated pre-market approval application seeking approval of the HVAD System for the destination therapy indication.
In April 2015, we presented results from our ENDURANCE clinical trial during the Opening Plenary Session at the 35th International Society for
Heart and Lung Transplantation (ISHLT) Annual Meeting in Nice, France, which demonstrated that the trial achieved the primary endpoint. Although neurological events in the treatment arm were higher than in the control arm, the data suggested that
blood pressure management appears to reduce neurological events, a hypothesis being tested in the ENDURANCE2 trial. The data presented also showed that sintering of the inflow cannula, a system modification which occurred during the trial, reduced
the overall rate of suspected thrombus and that pump exchanges for thrombus were less frequent in patients with the currently available HVAD system as compared to the control.
to expand our pipeline through research and development into next-generation products and peripherals and through ongoing and new clinical trials and to expand our presence in commercial markets outside of the United States. The MVAD Pump is a heart
pump that supports a wide range of flows to enable circulatory support for patients with advanced heart failure. The MVAD Pump was designed with a low shear stress impeller and optimal blood flow paths, which together are expected to result in
improved hemodynamic performance. In addition, the MVAD System incorporates a pulsatility algorithm called the qPulse Cycle that allows physicians to customize the device for each patient, providing four pulse settings designed to enhance
aortic valve function and reduce chronic bleeding events. The MVAD Pump, which is less than one-half the size of the HVAD Pump, weighs only 78 grams and displaces 22 cc of volume, and has a steerable