Shareholders Vote to Dissolve Artificial Heart Manufacturing Company
Jul. 11, 1991
SCOTTSDALE, Ariz. (AP) _ Shareholders of Symbion Inc., the artificial-heart manufacturer, voted Thursday to dissolve the company, leaving the pioneering technology in limbo.
Two not-for-profit institutions have reached an agreement in principle to acquire the technology, but no deal was announced at the 15-minute-long meeting attended by a half dozen shareholders.
Arizona's University Medical Center and Utah's Medforte Foundation hope to keep alive the technology behind the Jarvik total artificial heart and heart- assist devices.
UMC is Arizona's teaching hospital. Medforte housed Symbion in Salt Lake City until the firm moved to Tempe, Ariz., about two years ago.
Lane Castleton, chief financial officer, said he did not know whether an announcement from the affiliates of the universities of Utah and Arizona would be forthcoming.
''The alternatives are that we find somebody to take over the technology or we just abandon the technology,'' Castleton said. He said discussions with Arizona officials have included the possibility of providing ''up to $100,000 to assist them in re-achieving FDA approval'' for the technology.
The Food and Drug Administration withdrew approval to use the Jarvik total hearts or assist devices in January 1990, citing failure to comply, and its action effectively sealed the company's fate. The joint venture would seek to regain FDA approval for their use in humans.
The technology was developed at the University of Utah, which provided it to Symbion under a licensing agreement.
The University of Utah has claimed that Symbion is in default on the license agreement and therefore the technology should revert back to it.
Symbion, which was formed in 1976 and went public in 1983, disputes that contention, Castleton said, but because of the company's impending liquidation would not fight it.
''It's not worth our effort, even though we disagree with the University of Utah. We have nothing to gain by fighting them on it,'' Castleton said.
He said about 79 percent of ballots cast by proxy were in favor of liquidation - a move the directors had recommended earlier this year.
The board will oversee liquidation proceedings and may establish a liquidating trust after a year or so if assets remain.
One sticking point in negotiations to achieve the technology transfer has been the question of indemnifying Symbion from subsequent claims, such as any the FDA might make related to the artificial heart and heart assist devices.
The proxy statement the company issued before the shareholders' meeting said the company expected to transfer its interest in the license agreement ''without any warranty concerning its continued viability.''