WorldHeart Announces 2006 Financial Results



    Completes Restructuring to Focus on Levacor(TM) Rotary VAD

    OAKLAND, Calif., March 27 /CNW/ -- World Heart Corporation (Nasdaq:   WHRT;
TSX: WHT), a developer of mechanical circulatory support systems, today
reported its fourth quarter and full year 2006 financial results, including
recent milestones.

    Summary Financial Results

    For the fourth quarter of 2006, the Company recorded quarterly revenues
of $1.0 million, which is a decrease of approximately $2.6 million, compared
with revenues of $3.6 million in the 2005 fourth quarter. The net loss
applicable to common shareholders was $5.1 million, or $0.08 per share, in the
fourth quarter ended December 31, 2006, compared with $22.0 million, or
$0.40 per share, in last year's fourth quarter. Significant non-cash charges,
detailed below, were incurred in the fourth quarter of both years.
    For the year ended December 31, 2006, WorldHeart generated revenues of
$8.6 million, which represents a decrease of $3.0 million, or 26%, compared
with the previous fiscal year. Both revenue recognized on implant kits and
peripheral product sales decreased in 2006 due to WorldHeart's decision to
significantly reduce its commercial efforts for its first-generation, Novacor
LVAS, product and a shifting in the market place toward the next generation
products.
    The net loss applicable to common shareholders for 2006 was
$20.1 million, or $0.34 per share, including a restructuring charge of
$0.6 million in the fourth quarter and a write down of $4.6 million in
inventory associated with the Novacor LVAS product. For 2005, the net loss
applicable to common shareholders was $58.7 million, or $1.76 per share,
including significant non- cash charges of approximately $41.2 million.
    WorldHeart ended 2006 with cash and cash equivalents of $12.2 million,
compared with $10.7 million at year-end 2005 and $1.5 million at the end of
the third quarter of 2006. The Company completed a $14.1 million private
placement with existing and new investors during the fourth quarter of 2006.
In conjunction with the financing, the Company restructured its operations to
reduce operating expenses and realigned resources toward development of the
Company's next-generation products.
    "WorldHeart will continue to focus its energies on the final development,
evaluation, regulatory approval and eventual commercialization of our next-
generation Levacor Rotary VAD," said Jal S. Jassawalla, President and Chief
Executive Officer of WorldHeart. "We expect to initiate clinical use of the
Levacor in Canada in the near-term and start a U.S. feasibility trial in the
latter half of 2007. Thus far, we have been very pleased with the performance
of the Levacor in the first two patients in our European feasibility trial. We
announced, yesterday, the formation of a Clinical Trial Coordinating Committee
for the Levacor VAD, with the participation of leading U.S. cardiologists and
surgeons active in mechanical circulatory support therapy. We are seeing
strong interest, from leading clinical centers, in participating in a trial of
the only fully magnetically levitated, bearingless, centrifugal pump."

    
    Key 2006 Milestones

    -   In March 2006, WorldHeart announced a successful first in human
        implant of its next-generation Levacor Rotary VAD. The procedure,
        performed at St. Luke's Hospital in Thessaloniki, Greece, was the
        beginning of the Levacor VAD feasibility trial. There was a second
        successful Levacor implant completed at St. Luke's Hospital in May.
        Both patients were successfully weaned from the device and discharged
        from the hospital in 2006.

    -   In March 2006, WorldHeart announced the first successful chronic
        animal implant of its Novacor II LVAS, next-generation pulsatile VAD,
        by a team headed by Dr. James Long, Director of the Utah Artificial
        heart program at LDS Hospital in Salt Lake City. The Novacor II
        builds on proven Novacor LVAS technology.

    -   On November 13, 2006, WorldHeart entered into a purchase agreement
        with certain new and current investors for a private placement
        financing. Gross proceeds from two tranches of the financing, which
        was completed on December 21st, totaled approximately $14.1 million
        at a price of $0.25 per common share.

    -   In conjunction with the financing announcement, the Company initiated
        a significant restructuring and realignment of its business
        operations to better focus on the development of the next-generation
        Levacor VAD. The restructuring program reduced manufacturing, selling
        and administrative costs, primarily associated with the Novacor LVAS
        product. The program included a reduction in workforce primarily at
        the Oakland, California, and Heesch, Netherlands locations.
    

    About the Levacor VAD

    The Levacor VAD is a next-generation rotary VAD. It is the only
bearingless, fully magnetically levitated implantable centrifugal rotary pump
in clinical trials. An advanced, continuous-flow pump, the Levacor uses
magnetic levitation to fully suspend the spinning rotor, its only moving part,
inside a compact housing. The proprietary levitation technology employs a
unique arrangement of magnetics expected to provide optimal system simplicity
and reliability. In contrast to pumps with blood-immersed mechanical or
hydrodynamic bearings, full magnetic levitation eliminates wear within the
pump as well as dependence on blood properties for rotor suspension, and is
expected to provide improved blood compatibility by allowing greater
clearances around the rotor and more idealized flow patterns across a wider
range of operation. The Levacor VAD has been designed to address the needs of
current and future heart-failure patient populations with a high safety
profile and robust range of operation.

    A live webcast beginning at 11:00 a.m. EDT (8:00 a.m. PDT) this morning
will be hosted by Jal S. Jassawalla, President and Chief Executive Officer,
and Richard Juelis, Vice President, Finance and Chief Financial Officer. The
webcast can be accessed through the Company's home page, www.worldheart.com,
by clicking on the "Webcasts" link under News & Events. The teleconference can
be accessed domestically by dialing 866-202-1971 and internationally by
dialing 617-213-8842 and entering passcode 94442047 ten to fifteen minutes
prior to the beginning of the presentation. A replay of the conference call
will be available through April 3, 2007, starting at 1:00 p.m. EST (10:00 a.m.
PST) on March 27, 2007. The recording can be accessed domestically at
888-286-8010 and internationally at 617-801-6888 and entering passcode
14323819.

    About WorldHeart

    World Heart Corporation is a developer of mechanical circulatory support
systems with leading next generation technologies, headquartered in Oakland,
California, with additional facilities in Salt Lake City, Utah and in Heesch,
Netherlands. WorldHeart's registered office is Ottawa, Ontario, Canada.

    Any forward-looking statements in this release are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995
and include statements regarding the Company's expectations with respect to
the progress and timing of clinical studies and their impact on the Company's
ability to secure additional funding or enter into other strategic
relationship, as well as, other statements that can be identified by the use
of forward-looking language, such as "believes," "feels," "expects," "may,"
"will," "should," "seeks," "plans," "anticipates," or "intends" or the
negative of those terms, or by discussions of strategy or intentions.
Investors are cautioned that all forward-looking statements involve risk and
uncertainties, including without limitation: need for additional financing in
the future; continued slow market acceptance of Ventricular Assist Devices
(VADs) including WorldHeart's products; costs and delays associated with
clinical trials; limitations on third-party reimbursement; inability to
protect proprietary technology; continued slower Destination Therapy adoption
rate for VADs; and other risks detailed in the Company's filings with the
United States Securities and Exchange Commission, including its Current Report
on Form 8-K filed on December 22, 2006, and its forthcoming Annual Report for
the year ended December 31, 2006.


    
    WORLD HEART CORPORATION
    Condensed Consolidated Balance Sheets
    (United States Dollars in thousands)

                                                    December 31,
                                                 2006          2005
    ASSETS

    Cash and cash equivalents                  $12,217       $10,662
    Trade and other receivables                  2,298         3,896
    Inventory                                    3,088         8,216
    Capital assets                                 950         1,838
    Other assets                                 1,945         2,210
    Total assets                               $20,498       $26,822

    LIABILITIES and SHAREHOLDERS' EQUITY

    Liabilities
    Accounts payable and accrued liabilities    $4,403        $3,755
    Deferred revenue and clinical fees             470         1,205
    Other liabilities                              919         1,149
    Total liabilities                            5,792         6,109

    Total shareholders' equity                  14,706        20,713
    Total liabilities and shareholders'
     equity                                    $20,498       $26,822


    WORLD HEART CORPORATION
    Condensed Consolidated Statements of Operations
    (United States Dollars and Shares in the thousands except per share
     amounts)

                                 Three months ended     Twelve months ended
                                    December 31,           December 31,
                                   2006      2005         2006      2005

    Revenue                         $956    $3,630       $8,616   $11,646

    Cost of goods sold             2,354     2,499       10,201     8,479

    Gross margin                  (1,398)    1,131       (1,585)    3,167

    Operating expenses
      Selling, general and
       administrative              1,969     3,038        8,664    12,041
      Research and development       910     3,012        9,003     7,388
      Restructuring costs            646         -          646       333
      Amortization of
       intangibles                    48        52          191       339
      Acquired in-process
       research and development        -         -            -    18,147
      Goodwill impairment              -    17,180            -    17,180
        Total operating expenses   3,573    23,282       18,504    55,428

    Operating loss                (4,971)  (22,151)     (20,089)  (52,261)

    Other income (expenses)         (165)      153            4      (573)

    Net loss for the period       (5,136)  (21,998)     (20,085)  (52,834)

    Effect of warrant exchange         -         -            -    (5,860)

    Net loss applicable to
     common shareholders         $(5,136) $(21,998)    $(20,085) $(58,694)

    Weighted average number of
     common shares outstanding    66,381    55,480       58,227    33,369

    Basic and diluted loss per
     common share                 $(0.08)   $(0.40)      $(0.34)   $(1.76)

    




For further information:

For further information: Mr. Richard Juelis, (510) 563-4713, or Ms.
Peggy Allman, (510) 563-4721, both of World Heart Corporation Web Site:
http://www.worldheart.com/

Organization Profile

WORLD HEART CORPORATION

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