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"day traders at heart of action" the age

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    "Day traders at heart of action
    August 24, 2003

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    One patient's progress sends Ventracor shares through the roof. Richard Webb reports.

    Shares in artificial heart pump maker Ventracor rocketed last week after news that the first patient to be fitted with one of its heart-assist devices had been discharged from hospital.

    While this news was clearly the trigger for the huge share gain, sharemarket watchers also reported another phenomenon at work - huge levels of online trading in Ventracor shares, particularly on Thursday and Friday.

    This showed that day traders were back in the Australian sharemarket and working stocks following the sharemarket rally this year.

    Last week's share gains for Ventracor were remarkable. The stock soared early on Friday to a high of $3.81, valuing the company at $620 million - not bad for a business that a fortnight earlier reported sales worth $6 million for the year to June 30, a net loss of $9.4 million for the year, and had net tangible assets worth only 8 cents a share at balance date.

    Although Ventracor shares fell back during afternoon trade, at Friday's close of $3.05, the stock was still 48 per cent higher than the $2.06 finish a week earlier.

    There were two elements behind last week's remarkable rise, according to stock watchers.

    First, news that the first patient fitted with Ventracor's VentrAssist left ventricular assist device had been discharged from The Alfred hospital on Tuesday night was taken as a highly positive sign. It pointed to a successful pilot trial at The Alfred to evaluate the device.

    The trial will involve the implantation of the device into 10 patients who are very ill and are no longer responding to other treatment.

    In a statement released by The Alfred and Ventracor's managing director Michael Spooner to the Australian Stock Exchange on Wednesday, chief medical investigator Don Esmore appeared particularly positive.

    "While ongoing monitoring will be required as with a heart transplant patient, the quality of life for this patient has been substantially enhanced," Professor Esmore said.

    This was followed on Thursday by a company presentation to stockbrokers and company analysts. In the presentation, Ventracor outlined its plan to rapidly commercialise its left ventricular assist device should the Alfred trial prove successful.

    The Ventracor device is an alternative to a heart transplant and sits in the blood, helping the left ventricle of the heart to pump. The left ventricle does the bulk of the work in distributing blood around the body.

    In its presentation, Ventracor said the market potential for its product was enormous as there were 11 million people who had congestive heart failure but only 3500 who received heart transplants each year. It estimated that the market for its product was potentially worth more than $US7 billion ($A10.7 billion) a year.

    As Ventracor shares soared on Friday, some were left to rue selling earlier in the week. One seller predicted the shares had to collapse some time soon because they could not continue to rise at that rate, but he pointed out that this view might be the result of sour grapes."




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