sewing ring, which enables clinicians to position the inflow cannula to facilitate optimal blood flow into the pump. The integrated Pal controller and battery system includes a touch-screen
display and two sizes of small, light-weight, snap-on batteries.
In July 2015, we commenced our MVAD System CE Mark international
clinical trial. The MVAD System CE Mark trial is a multicenter, prospective, non-randomized, single-arm trial that evaluates the clinical safety and performance of the MVAD System for the treatment of advanced heart failure. The trial will enroll 70
patients at 11 sites in the United Kingdom, Austria, Australia, France and Germany. In the trial, patients will be implanted with the MVAD Pump via sternotomy or thoracotomy, and the device will be evaluated for short- and long-term use. The primary
endpoint is survival at six months.
On September 9, 2015, we announced a voluntary pause of enrollment in our MVAD CE Mark clinical
trial to address an MVAD controller manufacturing process issue. We are in the process of implementing manufacturing improvements as well as software updates, which were also described on September 9, 2015. Subsequently on October 13,
2015, and following discussions with the trial investigators, we began investigating causes of reported adverse events in certain clinical trial patients. The events being analyzed are typical of those seen in other clinical trials for ventricular
assist devices. We took similar actions successfully during our initial human study for the HVAD System during the HVAD CE Mark clinical trial in 2007, and HeartWare remains confident in its MVAD System and the potential for the MVAD design to
meaningfully improve outcomes for ventricular assist patients. A date for re-initiation of the MVAD clinical trial has yet to be established.
We have submitted to the FDA an Investigational Device Exemption seeking approval to commence an MVAD System clinical trial in the United
States. Health Canada is also reviewing a submission for a 15-patient, three-center study, which is expected to commence around the time the MVAD CE Mark trial is re-initiated.
September 1, 2015 we entered into a Business Combination Agreement (BCA) with Valtech, an early-stage, privately-held company headquartered in Or Yehuda, Israel specializing in the development of devices for mitral and tricuspid
valve repair and replacement, pursuant to which HeartWare and Valtech will both become subsidiaries of a new holding company, HW Global, Inc, (Holdco). HeartWare stockholders would receive one share of Holdco common stock for each share
of HeartWare common stock and Valtech shareholders would receive 5.2 million shares of Holdco common stock, 700,000 shares of Holdco common stock upon achievement of certain milestones, warrants to purchase 850,000 shares of Holdco common stock
which are exercisable upon attainment of $75 million of net sales (trailing 12 months) of Valtech products and an earn-out payment of $375 million (payable in cash or stock at the discretion of Holdco), upon attainment of $450 million of net sales
(trailing 12 months) of Valtech products. The respective boards of HeartWare and Valtech have approved the agreement. Completion of the transaction is subject to customary closing conditions, including approval of HeartWare and Valtech stockholders
and regulatory approvals. The closing of the transaction is expected in late 2015 or early 2016. In the event the BCA is terminated in accordance with the termination provisions of the BCA, HeartWare would be obligated to make a loan to Valtech in a
principal amount equal to $30 million pursuant to a convertible promissory note.
The preceding description of the business combination
agreement is not intended to be complete and is subject to the full text of the business combination agreement and related agreements, which are incorporated herein by reference to Exhibits 2.1 and 99.1 through 99.6 of our Form 8-K filed with the
Securities and Exchange Commission on September 1, 2015.
On December 1, 2013, we acquired CircuLite, Inc. CircuLite is the developer of the SYNERGY Circulatory Support System, a partial support
system designed to treat less sick, ambulatory, chronic heart failure patients who are not yet inotrope-dependent. The SYNERGY Surgical System is designed for long-term partial support and is intended to reduce the hearts workload while
improving blood flow to vital organs. The system is currently undergoing an upgrade to resolve issues that arose after its commercial release and caused the loss of its CE marking in the European Union in March 2014. In January 2015, we discontinued
development of the prior micropump and have focused our efforts on a version of our MVAD pump for our SYNERGY partial-assist program. Following the necessary clinical trials and regulatory approvals, we plan to re-launch the system in Europe and
will focus on building experience at a small number of centers of excellence, refining training techniques and implementing additional system upgrades. The next-generation endovascular system,