Is this the future of cardiac care?
Two decades after the Jarvik-7--and all its problems--a medical research firm has quietly designed an artificial heart that actually works.
By Patricia B. Gray

(FORTUNE Small Business) – Shortly after 7 a.m. Dr. Laman Gray stepped into the operating room at Jewish Hospital in Louisville to begin the most important procedure of his 30-year career as a cardiac surgeon. Outside, the city was waking to July heat so intense that the fabled bluegrass was turning a withered brown, but the operating room was chilled to a crisp 55 degrees. Dr. Gray paused for a moment, scalpel in gloved hand, then firmly pressed the blade into the chest laid bare before him. Over the next seven hours he and his surgical team would cut the exhausted but still beating heart from the chest of a dying man and stitch in its place a gleaming titanium and plastic pump with a compact battery and a two-year warranty.

The patient, Robert Tools, 59, had come to the hospital slumped in a wheelchair and so weakened by heart disease that he couldn't lift his chin from his chest. Once a muscular 6-foot-5 and 250 pounds, the former schoolteacher had shriveled to 150 pounds and was just days--maybe hours--from death. But moments after doctors placed the new heart in his chest and turned it on, it began pumping steadily: 115 beats a minute, more than three million beats a month. Six weeks later Tools stood at a press conference, beaming, and pronounced himself delighted with his new ticker. Four months after that, carrying a tackle box and a four-pound backup battery for his new heart, Robert Tools went fishing with Dr. Gray.

Tools wasn't the first patient to wake from surgery with a machine thumping inside his rib cage, but his 2001 operation marked the first installation of a fully enclosed, battery-powered artificial heart. The device, called the AbioCor and designed by Abiomed, a small company in Danvers, Mass., is designed not merely to sustain life but to give recipients a life worth living. Doctors have long experimented with artificial hearts: In the 1980s they implanted a device called the Jarvik-7 into six patients in the U.S. and Europe. But the Jarvik-7 required wires poking through patients' chests to a nearby power supply, leaving them vulnerable to infection. They lived an average of ten months, but died of organ failure, stroke, and other complications.

Yet during the past four years, with little fanfare, surgeons have implanted the self-contained AbioCor into 14 dying men, who have lived an average of six months. One, an amiable tire salesman from Central City, Ky., named Tom Christerson, lived for 17 months, going home to a hero's welcome and the simple pleasures of sipping a cold beer on his blue leather La-Z-Boy.

There have been setbacks. The widow of one man who received an artificial heart sued Abiomed in 2002, alleging that she and her husband had not been adequately informed about the difficulties of the procedure. (The case was settled out of court.) Still, encouraged by its successes, Abiomed has asked the Food and Drug Administration for permission to implant the device into patients who do not qualify for human-heart transplants and have no other viable options. The agency is likely to rule on the request this spring, and FDA approval is "all but certain," says Greg Simpson, senior medical-device analyst at Stifel Nicolaus & Co., a brokerage firm in St. Louis.

Leading up to the FDA decision, Abiomed has undergone a quiet but radical transformation. Last year David Lederman, 60, who founded the company in 1981, recruited a new CEO--Michael Minogue, 38, a hard-charging West Point graduate who had risen rapidly at GE Medical Systems. (Lederman remains chairman.) Minogue's mission: to transform the tiny research shop into a profitable leader in medical technology by leveraging the company's 77 patents and other proprietary knowledge. Minogue promptly raided GE for talent, hiring 11 former colleagues for key positions, and last September he delivered the company's first profitable quarter in its history. For fiscal 2005, Minogue says the company expects to post revenues of more than $37 million, up from $25.7 million in 2004, and will have a small loss for the year.

Commercial approval of the artificial heart would only enhance Abiomed's finances. While the FDA mulls the company's application, Abiomed is training surgical teams to implant its hearts at ten heart centers in the U.S. If approved by the FDA, the artificial heart could launch a new era in the treatment of cardiac disease, which is becoming epidemic in the U.S. Some 250,000 Americans die of heart failure every year, up 35% in the past decade. Although new drugs and devices are helping, the diagnosis still means a slow and agonizing death for many. Human-heart transplants offer hope to some, but the demand for donor organs far outstrips supply.

Abiomed estimates that the artificial heart alone could initially cost as much as $100,000, but that is a fraction of the total cost of treating a patient who receives the device. Jewish Hospital says it has spent $20 million so far upgrading its facilities to accommodate advanced cardiac devices such as the AbioCor. That sum includes the cost of refitting the operating and recovery rooms for the electronic equipment that monitors the heart. The hospital has also provided funding for years of animal testing in its labs and specialized training for dozens of its employees. When Tom Christerson, the tire salesman from Kentucky, left the hospital eight months after surgery, his home and the family van had to be outfitted with backup power sources to recharge the batteries for his heart. Abiomed footed the bill. Unless the government and private health insurers are willing to pay for the device and related rehabilitation, the heart will be nothing but medicine's Concorde, the supersonic jet that was a masterpiece of aeronautical engineering but in the end proved too pricey a ride. "FDA approval is no guarantee that insurers will cover the cost," says David Cassak, managing partner of Windhover Information, a market research firm in Norwalk, Conn. "But if doctors consider the device a breakthrough, and if patients start clamoring for it, insurers will fall in line and pay."

David Lederman initially wanted to work in the aerospace industry. Born in Bogotá, he won a scholarship to Cornell in the 1960s, where he ultimately received a doctorate in aerospace engineering. He joined a think tank at Avco Corp., a conglomerate with interests in aerospace, medicine, and munitions. (Avco was later bought out by Textron, a conglomerate based in Providence.) The U.S. government was funding research into an artificial heart; some of the most exciting work was being done at Avco, and Lederman got involved. "Landing a man on the moon was just a matter of physics," Lederman says. "Biology is more complex."

Though Lederman had no formal medical training, he and his colleagues were tackling--and solving--some of the most perplexing mysteries of human physiology. Then, in 1980, Avco pulled out of the medical research business. Lederman was stunned. For him, creating an artificial heart had become a personal quest. He decided he would continue the government-funded work on his own. "I had no intention of starting a company," he recalls. "I was not born to be an entrepreneur. But I had no choice."

At the time, Lederman was a married father of two--charismatic, tall, and handsome, with a distinguished accent. He managed to win over some hardened capitalists with the promise of making history--while also making a buck. Within months he had lined up funding from the National Institutes of Health, hired a few key engineers away from Avco, and gotten to work.

After only a year in business, Abiomed was jolted by a setback. Surgeons at the University of Utah implanted the Jarvik-7 artificial heart into 61-year-old Barney Clark; he survived more than three months with the plastic, polyester, and aluminum device. A media frenzy erupted as five other patients got Jarvik implants. Dr. Robert Jarvik, the dashing young surgeon who had invented the device, chatted about his sex life in Playboy and posed with one of his plastic hearts clutched to his chest for a fashion magazine. Even typically buttoned-down hospital administrators couldn't resist the chance to preen in public, and called press conferences to talk about their roles in the groundbreaking trial.

Up on the cardiac ward, doctors and nurses knew the sobering truth. Though the Jarvik heart was capable of prolonging life for months, its recipients had to be tethered to an air compressor the size of a washing machine, which powered the device. The Jarvik heart had wires protruding from the body and they led to repeated infections. Already close to death before they got the mechanical heart, these patients suffered complications such as infection, bleeding, and stroke.

As word of the problems leaked out, the National Institutes of Health threatened to cut funding. Lederman and others fought to restore government support for further research on artificial hearts and to recruit doctors to help with the suddenly unfashionable project. In 1987, Jarvik was fired by the company that owned the rights to his device, but he formed a new company called Jarvik Heart, and the Texas Heart Institute is currently testing his Jarvik 2000, a tiny, valveless device that is implanted in the left ventricle to help a failing heart pump blood. Jarvik told FSB he now believes that artificial hearts offer only "false hope" to those suffering from heart disease. He believes devices such as his, which boost heart function without replacing the organ itself, have more promise. "Whatever benefits those patients got wasn't worth the ordeal they endured," he says.

The Jarvik experiment offered valuable lessons for Lederman. He decided that prospective patients chosen to get his artificial heart would have an independent expert educate them about the dangers they would face. Abiomed would manage press coverage with dignity and restraint and without showboating.

Even though the company retained its federal funding, Abiomed still had difficulty finding hospitals willing to collaborate in transplant operations. But in the mid-1990s, Lederman found an advocate in Dr. Laman Gray. In 1983, Gray performed the first human-heart transplant in the South, at Louisville's Jewish Hospital. Gray had had a front-row seat at the Jarvik debacle--several of the surgeries had been done in Louisville--but unlike many of his colleagues, he thought an artificial heart still had promise. He met Lederman on a visit to the National Institutes of Health in Bethesda, Md., and volunteered to help Abiomed with its research efforts.

Gray and his surgical partner, Dr. Robert Dowling, started implanting the AbioCor device into 3-month-old calves, whose chest cavity is the same size as that of humans. (They tried pigs, but the animals were nasty patients with a tendency to bite.) Their first surgery was an eye-opener. Shortly after the anesthesia began to wear off and the groggy animal scrambled to its feet, the two doctors watched in horror as the heavy, beating heart started to burst through the sutures in the animal's chest. At four pounds, the softball-sized device is three times the weight of a young calf's heart, and four times the weight of the average human heart. The surgeons anesthetized the calf and anchored the heart with a double row of sutures.

Animal testing convinced the two surgeons that the heart was viable. The calves lived as long as two months with the device until they outgrew it and were euthanized. With every implant, Abiomed's engineers made improvements to the device. By 2001, Gray and Dowling had implanted the pump into 80 animals and were ready for the main event, replacing a human heart.

Congestive heart failure, caused by weakened muscle tissue in the heart, is a slow, gruesome way to die. Smoking and diet are factors, as are genetics, earlier heart ailments, and even viruses. Over time the diseased heart grows flabby and swollen, pumping faster and faster (though less efficiently) to try to satisfy oxygen-starved muscles and organs. Fluids build up in the legs and lungs. Victims often have the bug-eyed look of someone who is being strangled. Gray and Dowling see the disease every day, yet even they were taken aback when they first saw Robert Tools in June 2001.

Thirty years ago the African American was a brawny member of the U.S. Army's elite Special Forces in Vietnam. But heart disease and diabetes eventually put him in a wheelchair, and by 2001 he was running out of options. His kidneys were failing, and he was too sick to qualify for a human-heart transplant. Still, Robert Tools wanted desperately to live. Given his condition before the operation, Abiomed and Tools' surgeons hoped he would live for two months; the artificial heart kept him alive for more than four months. He never did get to go home. After surgery he lived in the hospital, making occasional forays to his favorite ice-cream stand and going on fishing trips with one of his surgeons. He died after severe abdominal bleeding and organ failure.

Thirteen more men have received implants, but Abiomed has disclosed little about the trial and what it has learned. Only one patient has spoken out publicly against the experiment: James Quinn, 52, a baker from Philadelphia who received his artificial heart in November 2001. Baker lived nine months with the device, but his wife later said that he regretted having volunteered for the trial, because they were unprepared for the difficulties of living with a complex mechanical device. In a lawsuit filed in state court against Abiomed and the hospital that implanted the device, his wife complained that the dangers and the stresses of the trial were never completely explained to the couple. The suit was settled for $125,000 in 2003.

As it awaits word from the FDA, Abiomed is already at work on an improved artificial heart, one that is lighter and small enough to fit in the chest cavity of most men and half of all women. The device is similar to the one now in clinical trials, although the company has incorporated some improvements. In its research lab in Danvers, Mass., a dozen or more of the next-generation hearts are submerged in tanks of warm, briny water meant to simulate the fluids of the human body. Some of these prototypes have been pumping in the saltwater tanks for years as the company tests their reliability. On and on they beat, night into day into night, minded by technicians and a bank of computers. Abiomed hopes to have the smaller heart in clinical trials by 2006. One sign of the company's optimism: The newer model will come with a five-year warranty.