Tuesday, June 24, 2008

Abiomed moves $5M loan into stake in World Heart

By Mass High Tech Staff

Abiomed Inc., a Danvers-based maker of cardiac devices, reports it has agreed to convert a $5 million loan it received from World Heart Corp. into World Heart common stock.

The agreement is part of Oakland, Calif.-based World Heart’s plan to recapitalize itself through the issuance of 300 million shares of common stock for a total purchase price of at least $30 million. Other stock purchasers that are part of the deal include venture firm Venrock and Special Situations Fund (SSF), according to Abiomed (Nasdaq: ABMD).

Abiomed said it has agreed to convert its note from World Heart into 86 million shares of World Heart common stock and to terminate a warrant it holds to purchase 3.4 million shares of World Heart stock. Also, Abiomed and World Heart have agreed to terminate a distribution agreement between the two companies, and an amended pact between the companies gives World Heart the ability to distribute its own products but allows Abiomed to negotiate distribution rights to World Heart products before other third parties.

The recapitalization agreement enables Abiomed, Venrock, and SSF to each designate a nominee to be elected to the board of directors of World Heart, according to Abiomed. World Heart expects to close the recapitalization deal with Abiomed and the other investors on July 31, 2008.

Abiomed, which makes the Impella heart pump, AbioCor artificial heart, and other cardiac devices, reported a loss of $27.8 million on revenue of $50.6 million for 2007. The firm employs 300 workers.