Where Are They Now? Start-Up Revisits Cardiac Assist Companies

From time to time, START-UP revisits early-stage companies it has written about in the past to find out what went according to plan and what didn’t. We’ll see if we can draw out some lessons both from the successes and failures of companies that set out to grab an opportunity in emerging markets. This month, we revisit several companies developing cardiac assist devices, pumps to support failing hearts. The cardiac assist market breaks into several segments essentially based on whether a device is designed to support a patient for hours, days, years, or forever. In the realm of short-term support, we’ve found that the acute care market for cardiac assist devices is moving along nicely. But when it comes to the chronic, long-term support of people with heart failure, progress is like watching grass grow. In particular, left ventricular assist devices (LVADs) for end-stage heart failure patients have had prolonged development phases. One start-up founded six years ago is still at the preclinical stage, and another still doesn’t have an FDA-approved product on the market even though the company was founded 14 years ago. Thoratec Corp., the market leader in ventricular assist devices with sales in 2008 of $313 million, has a 90% share in the US LVAD market and, as the first company to gain an FDA approval of an LVAD as a destination therapy, it has singlehandedly been responsible for advancing the field, opening up a large market that was once inaccessible to LVAD manufacturers. Still, start-ups looking for venture funding don’t necessarily like to use Thoratec as a model of success. Thoratec was founded in 1976 and it didn’t receive its first LVAD approval until 1994, and it continued to operate at a loss until 2002. Over more than 30 years, more than a hundred million dollars were invested in the company, and even today, it still hasn’t been able to penetrate very far into the potential multibillion-dollar market that keeps it going.

It’s somewhat surprising, given the slow and halting progress of the one success story in the field, that more than a dozen projects have been funded by venture capital firms...