Friday, May 23, 2008

New HeartWare HQ lures Boston Scientific talent

By Ryan McBride

Just a few miles away from where he used to work as a division president of medical devices giant Boston Scientific Corp. in Natick, Doug Godshall has spent the past year building a corporate office for Australian medical devices firm HeartWare Ltd.  

In an effort to attract more U.S. investors to HeartWare, Godshall, CEO of the company, said he plans to move its official headquarters to Framingham from Sydney, Australia, this year.

The move — similar to that of other overseas companies drawn to this area’s deep executive talent in life sciences and medical devices — comes as HeartWare begins a U.S clinical trial for its implantable heart pump this month. Also, the firm’s shares halted trading on the Australian Securities Exchange (ASX) this week, which it has done twice in the past prior to announcing a financing.

“The plan is to be a Massachusetts-headquartered company within the next 12 months,” said Godshall. HeartWare, which must clear customary legal hurdles to complete the move, revealed the plans to become a U.S. firm at its annual shareholder meeting in Australia this month. And while Godshall said the firm’s stock would likely continue to trade on the ASX, it may also seek a listing on an American stock exchange.

Last week, Godshall was in downtown Boston to meet with institutional stock buyers and to drum up interest in HeartWare. He traveled with a model of the firm’s device, a metal pump designed to keep blood flowing in patients’ hearts until they receive transplants.

The U.S. Food and Drug Administration this month cleared HeartWare to implant the device in 150 patients for a clinical trial, adding to the 33 people who have already been treated with the experimental product. Godshall said he expects to grow the Framingham office from 10 people now to 30 workers by the end of next year by adding clinical workers and marketing staff in support of the trials and anticipated U.S. product launch in 2011.

Meantime, HeartWare has expanded in Florida, where it employs about 80, with the relocation of its manufacturing operations from a plant in Miramar to a former Johnson & Johnson facility, which is twice as large, in Miami Lakes. Godshall said he has also been able to recruit engineering and regulatory workers from J&J, the New Jersey-based medical products giant.

While it hunts for more investors, HeartWare anticipates its first revenue from sales of the heart pumps to hospitals for use in the new clinical trials in the first half of 2008.

To be sure, there are products on the market with similar functions to the company’s $70,000 device. Abiomed Inc., a medical devices maker in Danvers, markets pump systems to provide cardiac support to people with heart failure. HeartWare’s other major competition is Thoratec Corp., a California maker of heart pumps, which has a local operation in Burlington. Both Abiomed and Thoratec are larger and better-funded than HeartWare.

Tapping local talent

With commercial growth in mind, HeartWare two years ago lured Godshall away from his job as president of the vascular division of Boston Scientific, where he had worked for 16 years. (Boston Scientific has since sold its vascular business as part of a divestment strategy to raise cash and reduce expenses.)

HeartWare’s expected move is perhaps the latest example of how former executives from large life sciences companies in Massachusetts have brought their new firms to the commonwealth. Industry watchers said HeartWare’s Massachusetts migration shows how the talent pool in the state draws new life sciences firms here.

“Certainly the CEOs and (venture capitalists) are magnets that draw companies here,” said Jeffrey Quillen, a partner in the life sciences practice of law firm Foley Hoag LLP in Boston. Quillen cited Mark Leuchtenberger, a former executive of Cambridge biotech powerhouse Biogen Idec Inc., as an example of someone who moved the corporate offices of biotech firm Targanta Therapeutics Corp. from outside of the state to his home turf in Cambridge in 2006. 

“New (medical devices) employers have an opportunity to recruit from a very well-established base of employees” in the state, said Thomas Sommer, president of Massachusetts Medical Device Industry Council, known as MassMEDIC.

Massachusetts has the third-largest cluster of medical devices companies in the country, behind California and Minnesota, Sommer said.

For his part, Godshall said he has been able to scoop up four other Boston Scientific staffers to join his HeartWare office. Last month the firm also appointed Timothy Barberich, a founder and former CEO of Marlborough drug maker Sepracor Inc., to its board of directors.