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Case Status:    SETTLED
On or around 11/21/2006 (Date of order of final judgment)

Filing Date: August 03, 2004

On November 21, 2006, the Court entered the Final Judgment Order of Dismissal with Prejudice, approving the settlement. That day, the Court also entered the Orders approving the plan of allocation and awarding lead counsel’s attorneys’ fees and reimbursement of expenses.

According to the Stipulation of Settlement filed August 23, 2006, the proposed settlement fund is in the amount of $3,375,000.

As disclosed by the Company’s FORM 10-Q for the quarterly period ended July 1, 2006, the parties to both the Federal securities law putative class action and the state shareholder derivative actions have reached a preliminary settlement of all pending actions, and we currently anticipate that the parties will be able to finalize these settlements during the third quarter of this year and expect court approval for both settlements to occur during the third or fourth quarter of this year.

On June 15, 2006, the plaintiffs filed a First Amended Consolidated Complaint.

On May 10, 2006, United States District Judge Ronald M. Whyte signed an Order granting the motion to dismiss the consolidated complaint. According to the Order, the court finds the complaint fails to adequately allege the falsity of the challenged statements and defendants' scienter with the requisite particularity. Therefore, the court grants without prejudice defendants' motion to dismiss the complaint for failure to state a claim. Plaintiffs shall have 30 days from the date of this order to file an amended complaint.

The original complaint charges Thoratec and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company claims that its HeartMate XVE ("HeartMate") is an approved ventricular assist device designed to provide permanent support for these patients. The Complaint alleges that during the Class Period, defendants made a number of false and misleading statements regarding expected sales and the market for the HeartMate as a "Destination Therapy" treatment for end-stage heart failure patients. As a result of these statements, Thoratec's stock traded at artificially inflated levels and defendants were able to complete a $143.7 million note offering.

Specifically, the complaint alleges that during the Class Period defendants knew but concealed from the investing public the following adverse material facts: (i) even as the Company estimated that as many as 100,000 patients per year in the U.S. could be helped by their new Destination Therapy treatment option, the actual "true" market for the product was far less than claimed, as it was severely constrained by limited reimbursement dollars available under Medicare and Medicaid service guidelines; (ii) although the defendants claimed that there were approximately 900 hospital centers in the U.S. qualified for the practice of Destination Therapy and implantation of the HeartMate, in fact less than 75 centers have been designated as Medicare-approved for Destination Therapy; (iii) Medicare had rigid preset reimbursement guidelines and schedules for Destination Therapy that could only translate into a serious negative impact on the Company's FY2004 sales projections for the HeartMate; (iv) cardiothorasic surgeons were rejecting and/or not accepting the HeartMate as a viable device for Destination Therapy patients because of issues with the device's reliability in a long-term setting; (v) the demand for the Company's Destination Therapy implants was not growing at the rate claimed; (vi) the Company's Destination Therapy implant estimate for FY2004 of between 300 to 500 pumps was grossly overstated and was internally projected to be a fraction of this estimate; (vii) the Company's FY2004 projections of $190-$200 million were overstated by tens of millions of dollars; (viii) not only were CMS reimbursement charges delaying the number of implants, implantation centers and medical professionals had delayed any significant expansion of the existing implant programs until after October 1, 2004 (the expected date of the availability of a significant increase in the CMS reimbursement rate); and (ix) sales of the HeartMate implants would be depressed until Q4 2004, and as a result, the Company's earnings shortfall experienced in Q1 2004 (versus Q4 2003 and Q1 2003) would not be made up for nearly one year, until Q1 2005, at best.

The complaint further alleges that on June 29, 2004, after the market closed, Thoratec released its preliminary results for the quarter ended June 30, 2004. These results were much worse than previous forecasts. On this news the price of Thoratec stock dropped precipitously to $10.74 per share, a drop of more than 25% from the previous day's close, on extraordinarily heavy volume of over 11 million shares.

Note: Thoratec is the leading supplier of implantable heart pumps and left ventricular assist devices. The Company manufactures these circulatory support products for use by patients with congestive heart failure, including "end-stage" patients. Traditionally these products have been used in such patients as a "bridge to transplant," for patients awaiting a heart transplant. In contrast, "Destination Therapy," or permanent support, is the Company's flagship new treatment option for patients with end-stage heart failure.

COMPANY INFORMATION:

Sector: Healthcare
Industry: Medical Equipment & Supplies
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: THOR
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: N.D. California
DOCKET #: 04-CV-3168
JUDGE: Hon. Ronald M. Whyte
DATE FILED: 08/03/2004
CLASS PERIOD START: 04/28/2004
CLASS PERIOD END: 06/29/2004
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Abraham, Fruchter & Twersky (New York, One Pennsylvania Plaza)
    One Pennsylvania Plaza, Suite 1910, Abraham, Fruchter & Twersky (New York, One Pennsylvania Plaza), NY 10119
    212.279.5050 212.279.3655 · JFruchter@FruchterTwersky.com
  2. Bernstein Liebhard & Lifshitz, LLP (New York)
    10 E. 40th Street, 22nd Floor, Bernstein Liebhard & Lifshitz, LLP (New York), NY 10016
    800.217.1522 · info@bernlieb.com
  3. Brodsky & Smith, LLC (former Pennysylvania)
    11 Bala Avenue, Suite 39, Brodsky & Smith, LLC (former Pennysylvania), PA 19004
    610.668.7987 610.660.0450 · esmith@Brodsky-Smith.com
  4. Federman & Sherwood (Oklahoma City)
    120 North Robinson, Suite 2720, Federman & Sherwood (Oklahoma City), OK 73102
    405-235-1560 · wfederman@aol.com
  5. Glancy Binkow & Goldberg LLP (Los Angeles)
    1801 Ave. of the Stars, Suite 311, Glancy Binkow & Goldberg LLP (Los Angeles), CA 90067
    310.201.915 310. 201-916 · info@glancylaw.com
  6. Kirby McInerney & Squire LLP
    830 Third Avenue 10th Floor, Kirby McInerney & Squire LLP, NY 10022
    212.317.2300 ·
  7. Law Offices of Charles J. Piven, P.A.
    World Trade Center-Baltimore,401 East Pratt Suite 2525, Law Offices of Charles J. Piven, P.A., MD 21202
    410.332.0030 · pivenlaw@erols.com
  8. Lerach Coughlin Stoia Geller Rudman & Robbin (San Francisco)
    100 Pine Street, Suite 2600, Lerach Coughlin Stoia Geller Rudman & Robbin (San Francisco), CA 94111
    415.288.4545 415.288.4534 · info@lerachlaw.com
  9. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Boca Raton)
    197 South Federal Highway, Suite 200, Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Boca Raton), FL 33432
    561.750.3000 56.750.3364 · info@lerachlaw.com
  10. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego)
    401 B Street, Suite 1700, Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego), CA 92101
    206.749.5544 206.749.9978 · info@lerachlaw.com
  11. Schatz & Nobel, P.C.
    330 Main Street, Schatz & Nobel, P.C., CT 06106
    800.797.5499 860.493.6290 · sn06106@AOL.com
No Document Title Filing Date
COURT: N.D. California
DOCKET #: 04-CV-3168
JUDGE: Hon. Ronald M. Whyte
DATE FILED: 06/15/2006
CLASS PERIOD START: 04/28/2004
CLASS PERIOD END: 06/29/2004
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Abraham, Fruchter & Twersky (New York, One Pennsylvania Plaza)
    One Pennsylvania Plaza, Suite 1910, Abraham, Fruchter & Twersky (New York, One Pennsylvania Plaza), NY 10119
    212.279.5050 212.279.3655 · JFruchter@FruchterTwersky.com
  2. Bernstein Liebhard & Lifshitz, LLP (New York)
    10 E. 40th Street, 22nd Floor, Bernstein Liebhard & Lifshitz, LLP (New York), NY 10016
    800.217.1522 · info@bernlieb.com
  3. Federman & Sherwood (Oklahoma City)
    120 North Robinson, Suite 2720, Federman & Sherwood (Oklahoma City), OK 73102
    405-235-1560 · wfederman@aol.com
  4. Glancy Binkow & Goldberg LLP (Los Angeles)
    1801 Ave. of the Stars, Suite 311, Glancy Binkow & Goldberg LLP (Los Angeles), CA 90067
    310.201.915 310. 201-916 · info@glancylaw.com
  5. Lerach Coughlin Stoia Geller Rudman & Robbin (San Francisco)
    100 Pine Street, Suite 2600, Lerach Coughlin Stoia Geller Rudman & Robbin (San Francisco), CA 94111
    415.288.4545 415.288.4534 · info@lerachlaw.com
  6. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego)
    401 B Street, Suite 1700, Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego), CA 92101
    206.749.5544 206.749.9978 · info@lerachlaw.com
No Document Title Filing Date
No Document Title Filing Date