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Hershey, Pa. -- Researchers from Penn State's College of Medicine announced today that they will be working with a new corporate partner as they continue their work on the total electric artificial heart.

"We are very pleased to begin working with ABIOMED, Inc., they are a recognized leader in the field," says Gerson Rosenberg, Ph.D., professor of surgery and chief of the Division of Artificial Organs.

ABIOMED announced today that it has entered into agreements to acquire the exclusive rights to Penn State's implantable replacement heart (the Penn State Heart) as well as the assets of BeneCor Heart Systems, Inc., a company recently created to commercialize the Penn State Heart.

The terms of these transactions consist of payment by ABIOMED of 55,000 shares of ABIOMED common stock, plus the issuance of warrants for up to 200,000 additional shares of ABIOMED common stock. Exercise of the warrants is contingent on the achievement of certain clinical and regulatory milestones with the Penn State Heart by specified dates.

In addition to the acquisition of exclusive rights to intellectual property and physical assets, the transaction includes arrangements for ABIOMED to begin a collaborative relationship with Penn State, its College of Medicine, and The Milton S. Hershey Medical Center. ABIOMED will also have access to future advances in related implantable replacement heart technology generated by the Penn State research and development team. ABIOMED intends to pursue the commercialization of the Penn State Heart at its Danvers, Massachusetts facility.

Rosenberg and his team had been working earlier with 3M and more recently with BeneCor Heart Systems, Inc.

The completely implantable total artificial heart is implanted in the space created by removal of the patient's heart. This system also uses an implanted controller and energy transmission system. ABIOMED will help Penn State researchers continue their work as they move toward clinical trials of the device.

Heart disease remains the number one cause of death in the United States. Rosenberg stressed that Penn State's College of Medicine will continue working with another corporate partner, Arrow International of Reading, Pa., on research with heart assist devices.

"We have worked with Arrow for a number of years and have benefited greatly from our relationship with them. This agreement with ABIOMED, Inc., doesn't change in any way our work with Arrow," states Rosenberg. A heart assist device called the Arrow LionheartTM was developed at Penn State's College of Medicine in conjunction with Arrow International, Inc. It was first implanted in Germany in October 1999. The device is in clinical trials in Europe and trials are expected to begin in the next few months in the United States.

"Currently all assist pumps have drive lines or external tethers that protrude through the skin. These lines often cause infections. The Lionheart ventricular assist system and the Penn State replacement heart are both totally implantable. Neither is intended for bridge-to-transplant or temporary support. They are both intended as permanent therapies for end stage heart failure in patients who are not fortunate enough to be transplanted due to the limited supply of donor hearts," said Rosenberg. "These devices, which address different patients, will greatly reduce the chance for infection, improve mobility for patients and enhance their quality of life.

"We have always been very fortunate at Penn State to work with outstanding companies regarding the artificial heart research and that will continue now that we have this new relationship with ABIOMED," stated Rosenberg.