UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934

     For quarterly period ended March 31, 2005

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from           to
                               ---------    --------------------

                       Commission file number: 000-28882
                                               ---------

                             WORLD HEART CORPORATION
        (Exact name of small business issuer as specified in its charter)

            Ontario                                       52-2247240
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)

                7799 Pardee Lane, Oakland, California, USA, 94621
                    (Address of principal executive offices)

                                 (510) 563-5000
                           (Issuer's telephone number)

                                       N/A
              (Former name, former address and former fiscal year,
                         if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.   Yes [X]     No [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

The number of common shares outstanding as of March 31, 2005 was 17,101,400.

Transitional Small Business Disclosure Format (Check one):  Yes [ ]     No [X]
<PAGE>

                                TABLE OF CONTENTS

         Item                                                               Page
         ----                                                               ----

Part I   1        Financial Statements                                       3

         2        Management's Discussion and Analysis                      11

         3        Controls and Procedures                                   17

Part II  2        Exhibits and Reports on Form 8-K                          18

                  Signatures                                                19
<PAGE>

PART I--FINANCIAL INFORMATION

Item 1.  Financial Statements.


WORLD HEART CORPORATION
Consolidated Balance Sheets
(United States Dollars)

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                                                              March 31,         December 31,
                                                                                   2005                 2004
-------------------------------------------------------------------------------------------------------------
                                                                            (unaudited)
<S>                                                             <C>                      <C>
ASSETS
Current assets
   Cash and cash equivalents                                    $             4,536,861  $         3,818,767
   Short-term investments                                                             -            4,999,034
   Trade and other receivables                                                4,137,000            4,238,049
   Prepaid expenses                                                             991,467              575,261
   Deferred transaction and financing costs                                     330,247                    -
   Inventory                                                                  8,453,189            8,112,525
                                                               ----------------------------------------------
                                                                             18,448,764           21,743,636
Long-term receivable                                                                  -              318,553
Cash pledged as collateral for lease                                            750,000              750,000
Capital assets                                                                1,937,490            2,011,586
Goodwill                                                                     17,179,643           17,179,643
Intangible assets                                                               127,498              255,012
                                                               ----------------------------------------------
                                                                $            38,443,395  $        42,258,430
                                                               ==============================================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
   Accounts payable and accrued liabilities                     $             4,234,969  $         3,854,833
   Taxes payable                                                                744,000              832,000
   Accrued compensation                                                         744,249            1,343,364
   Deferred revenue                                                           1,702,163            1,607,622
                                                               ----------------------------------------------
                                                                              7,425,381            7,637,819
Convertible debentures (note 3)                                               7,473,840            8,177,140
Long-term obligation                                                              8,830               16,368
                                                               ----------------------------------------------
                                                                             14,908,051           15,831,327
                                                               ----------------------------------------------

Shareholders' equity
   Common shares                                                            215,740,523          214,616,061
     Issued and outstanding - 17,101,359 common shares
      (December 31, 2004 - 15,744,522 common shares)
   Additional paid-in capital                                                11,377,442           11,451,267
   Cumulative other comprehensive income                                     (6,285,577)          (6,285,577)
   Accumulated deficit                                                     (197,297,044)        (193,354,648)
                                                               ----------------------------------------------
                                                                             23,535,344           26,427,103
                                                               ----------------------------------------------
                                                                $            38,443,395  $        42,258,430
-------------------------------------------------------------------------------------------------------------
</TABLE>

              (The accompanying notes are an integral part of these
                      consolidated financial statements.)

                                      -3-
<PAGE>

WORLD HEART CORPORATION
Consolidated Statements of Operations and Accumulated Deficit
(United States Dollars)

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Three months ended
                                                                                                  March 31,            March 31,
                                                                                                       2005                 2004
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                (unaudited)          (unaudited)
<S>                                                                                       <C>                <C>
Revenue                                                                                   $      3,416,988   $        2,192,343
Cost of goods sold                                                                              (2,111,702)          (1,178,397)
                                                                                          ---------------------------------------

Gross margin                                                                                     1,305,286            1,013,946
                                                                                          ---------------------------------------
Expenses
   Selling, general and administrative                                                          (3,445,829)          (3,035,445)
   Research and development                                                                     (1,187,558)          (1,345,568)
   Restructuring costs (note 5)                                                                   (129,498)                   -
   Amortization of intangibles                                                                    (127,514)            (129,166)
                                                                                          ---------------------------------------
                                                                                                (4,890,399)          (4,510,179)
                                                                                          ---------------------------------------

Operating loss before the undernoted                                                            (3,585,113)          (3,496,233)

Other income (expenses)
   Foreign exchange loss                                                                           (24,372)            (100,467)
   Investment income                                                                                20,026               90,797
   Interest expense and financing costs                                                           (352,937)              (3,704)
                                                                                          ---------------------------------------

Net loss for the period                                                                         (3,942,396)          (3,509,607)

Accumulated deficit, beginning of the period                                                  (193,354,648)        (167,212,850)
                                                                                          ---------------------------------------

Accumulated deficit, end of the period                                                    $   (197,297,044)  $     (170,722,457)
                                                                                          =======================================

Weighted average number of common shares outstanding                                            16,556,950           15,117,096
                                                                                          =======================================

Basic and diluted loss per common share                                                   $          (0.24)  $            (0.23)
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

              (The accompanying notes are an integral part of these
                      consolidated financial statements.)

                                      -4-
<PAGE>

WORLD HEART CORPORATION
Consolidated Statements of Cash Flow
(United States Dollars)

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Three months ended
                                                                                                     March 31,         March 31,
                                                                                                          2005              2004
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                   (unaudited)        (unaudited)
<S>                                                                                         <C>                 <C>
CASH FLOWS FROM (USED IN)

Operating activities
  Net loss for the period                                                                   $       (3,942,396) $     (3,509,607)
  Items not involving cash -
     Amortization                                                                                      294,522           325,840
     Issuance of options and warrants for services and
        financing costs                                                                                      -             8,201
     Interest and accretion on convertible debentures                                                  347,322                 -
     Unrealized foreign exchange loss                                                                   97,547           123,345
  Change in operating components of working capital                                                   (971,549)       (4,189,108)
                                                                                            -------------------------------------
                                                                                                    (4,174,554)       (7,241,329)
                                                                                            -------------------------------------

Investing activities
  Redemption of short-term investments                                                               4,999,034        11,504,032
  Purchase of capital assets                                                                           (92,912)          (34,251)
  Cash pledged as collateral for lease                                                                       -          (222,003)
                                                                                            -------------------------------------
                                                                                                     4,906,122        11,247,778
                                                                                            -------------------------------------

Financing activities
  Common shares issued through exercise of warrants                                                          -         1,499,404
                                                                                            -------------------------------------
                                                                                                             -         1,499,404
                                                                                            -------------------------------------

Effect of exchange rate changes on cash and cash equivalents                                          (13,474)            27,929
                                                                                            -------------------------------------

Change in cash and cash equivalents for the period                                                     718,094         5,533,782

Cash and cash equivalents, beginning of the period                                                   3,818,767         6,337,677
                                                                                            -------------------------------------
Cash and cash equivalents, end of the period                                                $        4,536,861  $     11,871,459
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
Supplementary Cash Flow Information                                                                   Three months ended
                                                                                                     March 31,         March 31,
                                                                                                          2005              2004
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                   (unaudited)        (unaudited)
<S>                                                                                         <C>                 <C>
Convertible debentures settled with the issuance
   of common shares                                                                         $        1,679,461  $              -
Accrued interest on convertible debentures
   settled with the issuance of common shares                                               $           19,977  $              -
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

              (The accompanying notes are an integral part of these
                      consolidated financial statements.)

                                      -5-
<PAGE>

WORLD HEART CORPORATION
Notes to the Unaudited Consolidated Financial Statements
--------------------------------------------------------------------------------

1.   Going Concern Assumption

These consolidated financial statements have been prepared on the basis of
accounting principles applicable to a going concern, which assume that World
Heart Corporation (the "Corporation" or "WorldHeart") will continue in operation
for the foreseeable future and will be able to realize its assets and discharge
its liabilities in the normal course of operations.

The use of these principles may not be appropriate because, as at March 31,
2005, there was substantial doubt that the Corporation would be able to continue
as a going concern. The Corporation's ability to continue as a going concern is
dependent upon its ability to obtain additional financing and become
commercially successful.

On January 31, 2005, the Corporation announced a definitive agreement to
concurrently: acquire all the assets of MedQuest Products, Inc. ("MedQuest") for
9,300,000 common shares; issue 8,888,889 common shares, through a private
placement, for gross proceeds of $12,000,000; convert all of its outstanding
convertible debentures; and issue 10,655,000 common shares upon the exercise of
10,655,000 warrants for gross proceeds of $10,655,000. During the quarter,
$1,679,461 of the convertible debentures and $19,977 of accrued interest were
converted into 1,356,837 common shares of the Corporation (see Note 3). There
can be no assurance that the Corporation will be successful in completing this
transaction and therefore sustain operations for the foreseeable future.

These financial statements do not reflect adjustments to the carrying values of
assets and liabilities, the reported revenues and expenses, and the balance
sheet classifications used that would be necessary if the going concern
assumption were not appropriate. Such adjustments could be material.

2.   Significant Accounting Policies

(a)  Basis of presentation

The accompanying interim unaudited consolidated financial statements have been
prepared by management in accordance with accounting principles generally
accepted in the United States ("GAAP"), and include all assets, liabilities,
revenues and expenses of the Corporation and its wholly owned subsidiaries;
World Heart Inc. and World Heart B.V. All material intercompany transactions and
balances have been eliminated. These interim unaudited consolidated financial
statements follow the same accounting policies and methods of their application
as the Corporation's audited consolidated financial statements for the year
ended December 31, 2004. These interim unaudited consolidated financial
statements do not conform in all respects to the requirements of GAAP for annual
financial statements. These condensed notes to the interim unaudited
consolidated financial statements should be read in conjunction with the audited
consolidated financial statements and notes for the year ended December 31,
2004.

The preparation of these unaudited consolidated financial statements in
conformity with GAAP requires management to make estimates and assumptions that
affect the amounts reported in the unaudited consolidated financial statements
and the accompanying notes. Actual results could differ from these estimates and
the operating results for the interim periods presented are not necessarily
indicative of the results expected for the full year. In the opinion of
management, these unaudited consolidated financial statements reflect all normal
and recurring adjustments considered necessary to state fairly the results for
the periods presented.

3.   Convertible Debentures

On September 15, 2004, the Corporation issued unsecured convertible debentures
("Debentures") and detachable warrants ("Warrants") for gross proceeds of
$13,318,750 and net proceeds of $12,101,668 after share issue costs of
$1,217,082. The Debentures, which become due on September 15, 2009, are
convertible at any time at the holders' option into common shares of the
Corporation at a price of $1.25 per share and accumulate non-compounding
interest at an annual rate of 3%. Interest is convertible at any time into
common shares of the Corporation at a price based on the five day weighted
average trading price immediately prior to conversion. The Corporation can
redeem the Debentures when the trading price of the Corporation's common shares
is greater than $3.00 for 20 consecutive trading days, subject to a maximum of
20% of the initially issued Debentures in any 90-day period. In addition,
Warrants to purchase 10,655,000 common shares of the Corporation at an exercise
price of $1.55 per share and exercisable for a period of five years were issued
to the Debenture holders. The Corporation may call the Warrants when the trading
price of the Corporation's common shares is greater than $4.50 for 20
consecutive trading days, subject to a maximum of 20% of the initially issued
Warrants in any 90-day period.

                                      -6-

<PAGE>

WORLD HEART CORPORATION
Notes to the Unaudited Consolidated Financial Statements
--------------------------------------------------------------------------------

3.   Convertible Debentures (continued)

The proceeds of the issue were split between the Debentures, the Warrants and
the beneficial conversion feature included in the Debentures based on their
relative fair values. The respective fair values of the components of the
Debentures as at the time of issue, as at December 31, 2004 and as at March 31,
2005 are as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                         September 15,          December 31,             March 31,
                                                                  2004                  2004                  2005
                                                                                                       (unaudited)
-------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>                  <C>                   <C>
Convertible debentures                                    $   1,911,128        $   8,177,140         $   7,473,840
Warrants                                                      4,369,170            4,369,170             4,369,170
Beneficial conversion feature                                 5,821,370                    -                     -
                                                  -----------------------------------------------------------------

                                                          $  12,101,668        $  12,546,310         $  11,843,010
-------------------------------------------------------------------------------------------------------------------
</TABLE>

On September 16, 2004, the earliest possible conversion date, the full value of
the beneficial conversion feature was charged to interest expense. Interest and
accretion is accrued at the effective rate of the Debentures up to its original
maturity value of $15,316,563 on September 15, 2009. As a result, $347,322 of
interest and accretion was charged during the three months ended March 31, 2005.

As a condition of the MedQuest transaction, investors that participated in the
Corporation's September 2004 convertible debenture transaction have unanimously
agreed, subject to shareholder approval of a reduction in the Warrant exercise
price from $1.55 to $1.00 per share, to convert their Debentures at their stated
conversion price of $1.25 per common share into approximately 10,655,000 common
shares. The accrued interest will be converted into common shares at a
conversion price equal to the market prices at the date of conversion. The
Debenture holders have also unanimously agreed, subject to shareholder approval
of the reduction in the Warrant exercise price, to exercise the corresponding
Warrants into 10,655,000 common shares of the Corporation at an exercise price
of $1.00 per share. The Warrants are currently exercisable until September 2009
at a price of $1.55 per common share. The Corporation is seeking shareholder
approval for the $0.55 reduction in the Warrant exercise price.

4.   Stock-based Compensation

The Corporation accounts for its stock option plan in accordance with the
Financial Accounting Standards Board's ("FASB") Statement of Financial
Accounting Standards ("SFAS") No. 123, "Accounting for Stock Based
Compensation", which requires companies to recognize as expense, over the
vesting period, the fair value of all stock based awards on the date of grant or
to continue to apply the provisions of Accounting Principles Board ("APB")
Opinion No. 25, "Accounting for Stock Issued to Employees" and provide pro forma
net income and pro forma income per share disclosures as if the fair value based
method defined in SFAS No. 123 had been applied to stock-based awards. The
Corporation follows this alternative method.

The estimated share-based compensation costs based on stock options granted to
directors and employees and the pro forma net loss and loss per share are as
follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                                 Three months ended       Three months ended March
                                                                          March 31,                            31,
                                                                               2005                           2004
                                                                        (unaudited)                    (unaudited)
-------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>                            <C>
Net loss for the period                               $                 (3,942,396)  $                 (3,509,607)
Share-based compensation costs                                            (331,720)                      (617,503)
                                                      -------------------------------------------------------------

Adjusted pro forma net loss                           $                 (4,274,116)  $                 (4,127,110)
                                                      =============================================================

Reported basic and diluted loss per common share      $                      (0.24)  $                      (0.23)
Share-based compensation costs per common share                              (0.02)                         (0.04)
                                                      -------------------------------------------------------------

Pro forma basic and diluted loss per common share     $                      (0.26)  $                      (0.27)
                                                      -------------------------------------------------------------
</TABLE>

                                      -7-
<PAGE>

WORLD HEART CORPORATION
Notes to the Unaudited Consolidated Financial Statements
--------------------------------------------------------------------------------

4.   Stock-based Compensation (continued)

On September 23, 2004, the Corporation conditionally granted 2,383,725 options
to purchase common shares of the Corporation, to employees, officers, directors,
and consultants, subject to shareholder approval of an increase in the number of
options available under the employee stock option plan. These options have an
exercise price of $1.12 per share, except for 215,000 options which have an
exercise price of Cdn $1.43 per share. The options vest one third on each of the
first, second and third anniversaries of the date of grant and expire on
September 22, 2013. In addition, the Corporation conditionally granted on
January 31, 2005, 3,418,750 options to purchase common shares of the
Corporation, to employees, officers, directors and consultants, subject to
shareholder approval of an increase in the number of options available under the
employee stock option plan; 1,309,500 of these options are reserved for new
officers and employees. These options have an exercise price of $1.48 per share,
vest one third on each of the first, second and third anniversaries of the date
of grant and expire six years after each vesting date. The share-based
compensation costs and the adjusted pro forma net loss above do not include the
charges related to the options conditionally granted by the Corporation. These
options will be measured and the resulting compensation cost will be recorded
after shareholder approval.

The Corporation did not have any new option issuances requiring measurement
during the three months ended March 31, 2005. The weighted average fair value of
the options issued during the three months ended March 31, 2004 was $5.09. The
fair values of options granted are determined using the Black-Scholes model. For
the three months ended March 31, 2004, the following weighted average
assumptions were utilized:

------------------------------------------------------------
                                         Three months ended
                                                  March 31,
                                                       2004
------------------------------------------------------------
Expected option life, in years                            6
Volatility                                              73%
Risk free interest rate                               4.00%
Dividend yield                                          Nil
------------------------------------------------------------

5.   Restructuring

On August 25, 2004, the Corporation approved a plan to consolidate its Ottawa,
Ontario operations into its facilities in Oakland, California where the Novacor
LVAS is manufactured. The consolidation of the North American operations into
one location is expected to reduce ongoing business expenses and improve the
Corporation's operational efficiency and effectiveness. The Corporation expects
the restructuring to be completed by the end of June 2005 and expects to incur
total restructuring charges of $2,661,002 comprised of employee severance costs
of $1,535,510; contract settlement costs of $723,685; write down of capital
assets to net realizable value of $335,049; and other costs of $66,758.

The amounts accrued and expensed to date are as follows:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                           Employee         Contract         Write
                                          severance       settlement          down            Other           Total
--------------------------------------------------------------------------------------------------------------------
<S>                                     <C>                <C>           <C>              <C>           <C>
Costs accrued during 2004               $ 1,396,037        $  57,653     $ 338,595        $  22,509     $ 1,814,794

Costs paid or settled in 2004              (795,923)               -      (338,595)          (8,624)     (1,143,142)
                                      ------------------------------------------------------------------------------

Balance in accrued liabilities as at
   December 31, 2004                        600,114           57,653             -           13,885         671,652

Costs accrued during the period             110,539                -        (3,546)          22,505         129,498

Costs paid or settled in the period        (674,414)               -         3,546          (20,518)       (691,386)
                                      ------------------------------------------------------------------------------

Balance in accrued liabilities as at
   March 31, 2005                       $    36,239        $  57,653     $    -           $  15,872     $   109,764
--------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      -8-
<PAGE>

WORLD HEART CORPORATION
Notes to the Unaudited Consolidated Financial Statements
--------------------------------------------------------------------------------

6.   Canadian Accounting Principles

The interim unaudited consolidated financial statements have been prepared in
accordance with U.S. GAAP. These principles differ, as they affect the
Corporation, for the three month period ended March 31, 2005 and for the balance
sheets as at March 31, 2005 and December 31, 2004, in the following material
respects from Canadian GAAP. There are no differences in reported cash flows for
the periods presented.

(a)  Balance sheets - Canadian GAAP

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                                                     March 31,        December 31,
                                                                                          2005                2004
-------------------------------------------------------------------------------------------------------------------
                                                                                   (unaudited)
<S>                                                                              <C>                 <C>
ASSETS
Current assets                                                                   $  18,448,764       $  21,743,636
   Long-term receivable                                                                      -             318,553
   Cash pledged as collateral for lease                                                750,000             750,000
   Capital assets                                                                    1,937,490           2,011,586
   Goodwill and intangible assets                                                   17,307,141          17,434,655
                                                                            ---------------------------------------

                                                                                 $  38,443,395       $  42,258,430
                                                                            =======================================

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities                                                              $   7,425,381       $   7,637,819
   Convertible debentures (1)                                                        2,797,869           2,530,659
   Long-term obligation                                                                  8,830              16,368
                                                                            ---------------------------------------

                                                                                    10,232,080          10,184,846
                                                                            ---------------------------------------

Shareholders' equity (deficiency)
   Common shares (2)                                                               188,194,744         187,027,058
   Contributed surplus (1)                                                          22,389,807          22,871,780
   Cumulative translation adjustment                                                (6,490,184)         (6,490,184)
   Accumulated deficit (1) (2)                                                    (175,883,052)       (171,335,070)
                                                                            ---------------------------------------

                                                                                    28,211,315          32,073,584
                                                                            ---------------------------------------

                                                                                 $  38,443,395       $  42,258,430
-------------------------------------------------------------------------------------------------------------------
</TABLE>

(b)  Statements of loss - Canadian GAAP

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                                                    March 31,          March 31,
                                                                                         2005               2004
                                                                                  (unaudited)        (unaudited)
----------------------------------------------------------------------------------------------------------------

<S>                                                                              <C>                <C>
  Net loss for the period in accordance with U.S. GAAP                           $(3,942,396)       $(3,509,607)
  Adjustments to reconcile to Canadian GAAP:
     Non-cash share based compensation costs (3)                                    (331,720)          (617,503)
     Interest and accretion on convertible debentures (1)                           (273,866)                  -
                                                                           --------------------------------------

  Net loss for the period in accordance with Canadian GAAP                        (4,547,982)        (4,127,110)
                                                                           ======================================

  Weighted average number of common shares outstanding                            16,556,950         15,117,096
                                                                           ======================================

  Basic and diluted loss per common share                                        $     (0.27)       $     (0.27)
-----------------------------------------------------------------------------------------------------------------
</TABLE>

                                      -9-
<PAGE>

WORLD HEART CORPORATION
Notes to the Unaudited Consolidated Financial Statements
--------------------------------------------------------------------------------

6.   Canadian Accounting Principles (continued)

(c)  Footnotes

(1)  Under U.S. GAAP the proceeds of the issue on the convertible debentures
     were split between the convertible debentures, the warrants for common
     shares, and the beneficial conversion feature based on their relative fair
     values. The value of the warrants and the beneficial conversion feature
     were recorded in additional paid-in capital. On September 16, 2004, the
     earliest possible exercise date, the full value of the beneficial
     conversion feature was charged to interest expense. Under Canadian GAAP the
     proceeds of the issue were allocated based on the relative fair values of
     the debentures, the warrants and the conversion option. The net proceeds
     were allocated as follows:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                                             September 15,      December 31,         March 31
                                                                      2004              2004             2005
                                                                                                  (unaudited)
--------------------------------------------------------------------------------------------------------------
<S>                                                             <C>              <C>              <C>
Convertible debentures                                          $ 1,734,350      $ 2,530,677      $ 2,797,869
Warrants                                                          4,504,127        4,504,127        4,504,127
Conversion feature                                                5,863,191        5,863,191        5,049,501
                                                         -----------------------------------------------------

                                                                $12,101,668      $12,897,995      $12,351,497
--------------------------------------------------------------------------------------------------------------
</TABLE>

     The value allocated to the debentures will accrete to the cash value at
     maturity at the effective interest rate. Due to the conversion of
     debentures and the related accrued interest during the three months ended
     March 31, 2005, under U.S. GAAP $1,050,622 was transferred from convertible
     debentures and $73,825 was transferred from additional paid-in capital to
     common shares. Under Canadian GAAP, the amount transferred from convertible
     debentures was $353,996 and from contributed capital was $813,693.

(2)  The difference between the issue price and initial public offering (IPO)
     price of shares issued within a one-year period prior to the IPO is
     generally accounted for as an expense and charged against earnings for the
     period with a corresponding and equal amount recorded as paid-in capital.
     There is no corresponding requirement under Canadian GAAP. The difference
     of $32,867,182 related to the Corporation's IPO in 1996, increases the
     common shares and accumulated deficit reported under U.S. GAAP, with no
     difference reported in total shareholders' equity.

(3)  Under U.S. GAAP, the Corporation accounts for its stock option plan in
     accordance with APB Opinion No. 25 and provides pro forma net income and
     pro forma income per share disclosure as if the fair value based method as
     defined in SFAS No. 123 had been applied to stock-based awards. Under
     Canadian GAAP, the Corporation accounts for its stock option plan in
     accordance with CICA 3870 which requires entities to account for employee
     stock options using the fair value based method, where compensation cost is
     measured at fair value at the date of grant and is expensed over the
     stock-based awards vesting period.

7.   New Accounting Pronouncements

In June 2001, the FASB issued SFAS No. 148, which amended the transitional
provisions of SFAS No. 123 for companies electing to recognize employee
stock-based compensation using the fair value based method. The provisions of
FASB No. 148 will be effective for years beginning on or after January 1, 2006.
In addition, during 2004, the FASB issued SFAS No. 123R, which also amended the
provisions of SFAS No. 123. The provisions of FASB No. 123R will be effective
for years beginning on or after January 1, 2006. The Corporation plans on
adopting these new pronouncements in 2006.

                                      -10-
<PAGE>

WORLD HEART CORPORATION
Notes to the Unaudited Consolidated Financial Statements
--------------------------------------------------------------------------------

Item 2.  Management's Discussion and Analysis.

INTRODUCTION

World Heart Corporation and its subsidiaries are collectively referred to as
"WorldHeart". The following Management Discussion and Analysis of Financial
Condition and Results of Operations ("MD&A") was prepared by management as of
April 26, 2005, was approved by the Board of Directors and is an update of our
discussion and analysis for the year ended December 31, 2004. This MD&A
discusses material changes in WorldHeart's financial condition and results of
operations and cash flows for the three months ended March 31, 2005. Such
discussion and comments on the liquidity and capital resources should be read in
conjunction with the information contained in WorldHeart's audited consolidated
financial statements for the year ended December 31, 2004, prepared in
accordance with accounting principles generally accepted in the United States
("GAAP") included in our Annual Report on Form 10 - KSB for the fiscal year
ended December 31, 2004. Significant differences between Canadian GAAP and U.S.
GAAP are presented in Note 6 to the unaudited consolidated financial statements
for the three months ended March 31, 2005. In this discussion, all amounts are
in United States dollars ("U.S. dollars") unless otherwise stated.

The discussion and comments contained hereunder include both historical
information and forward-looking information. The forward-looking information,
which generally is information stated to be anticipated, expected, or projected
by management, involves known and unknown risks, uncertainties and other factors
that may cause the actual results and performance to be materially different
from any future results and performance expressed or implied by such
forward-looking information. Potential risks and uncertainties include, without
limitation, the uncertainties inherent in the development of new products for
use in the human body, WorldHeart's need for significant additional funding,
successful integration of acquisitions, WorldHeart's need to establish
reimbursement mechanisms and product acceptance from third-party payers,
extensive government regulation of our products, rapid developments in
technology, including developments by competitors, potential lack of anticipated
synergies and efficiencies of scale related to the MedQuest Products, Inc.
("MedQuest") acquisition, and potential difficulties in the integration of the
MedQuest operations.

OVERVIEW

WorldHeart is a global medical device company currently focused on the
development and commercialization of implantable pulsatile ventricular assist
devices ("VADs"), which are mechanical pumps that allow for the restoration of
normal blood circulation to patients suffering from late-stage congestive heart
failure. WorldHeart has facilities in Oakland, California, United States,
Ottawa, Ontario, Canada, and Heesch, Netherlands. On August 25, 2004, we
approved a plan to consolidate the Ottawa operations into our facility in
Oakland. WorldHeart currently derives substantially all of its revenue from its
Novacor(R) LVAS (left ventricular assist system) and related peripheral
equipment.

WorldHeart manufactures and distributes the Novacor LVAS. The Corporation sells
its Novacor products directly to medical clinics and hospitals in the United
States, most of Europe and Canada and through a distributor in Japan and certain
other countries.

The Novacor LVAS is commercially approved as a bridge to transplantation device
in the United States and Canada. In Europe, the Novacor LVAS has unrestricted
approval for use as an alternative to transplantation, a bridge to
transplantation, and to support patients who may have an ability to recover the
use of their natural heart. In Japan, the device is commercially approved for
use in cardiac patients at risk of imminent death from non-reversible left
ventricular failure for which there is no alternative except heart
transplantation.

WorldHeart has commenced a long-term use (Destination Therapy) trial in the
United States called RELIANT (Randomized Evaluation of the Novacor LVAS in a
Non-Transplant Population). Data from the RELIANT Trial is expected to support a
Pre-market Approval Supplement that will request approval for the use of the
Novacor LVAS by non-transplant eligible, or Destination Therapy. patients in the
United States.

WorldHeart is in the process of developing a next-generation implantable
pulsatile VAD and, subject to certain approvals, has recently agreed to acquire,
from MedQuest, the technology associated with a magnetically levitated
centrifugal rotary VAD. Development work on the Novacor II small pulsatile VAD
will continue with initial clinical trials in 2007, and initial commercial
approvals in Europe in 2008 and in the United States in 2010.

                                      -11-
<PAGE>

SUMMARY OF QUARTERLY RESULTS

<TABLE>
-----------------------------------------------------------------------------------------------------------
                                                                    Three Months Ended
                                                -----------------------------------------------------------
                                                      March 31,  December 31,  September 30,      June 30,
                                                           2005          2004           2004          2004
-----------------------------------------------------------------------------------------------------------
<S>                                                <C>           <C>          <C>             <C>
Net revenue                                        $ 3,416,988   $ 2,986,980  $   2,250,050   $ 2,146,388
Net loss                                            (3,942,396)   (5,608,818)   (11,620,584)   (5,402,789)
Net loss applicable to common shareholders          (3,942,396)   (6,293,510)   (10,935,893)   (5,402,792)
Basic and diluted loss per share                   $     (0.24)  $     (0.41) $       (0.71)  $     (0.35)
-----------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                                    Three Months Ended
                                                -----------------------------------------------------------
                                                      March 31,  December 31,  September 30,      June 30,
                                                           2004          2003           2003          2003
-----------------------------------------------------------------------------------------------------------
<S>                                                <C>            <C>           <C>           <C>
Net revenue                                        $ 2,192,343    $  559,704    $ 2,023,170   $ 1,944,702
Net loss                                            (3,509,607)   (4,846,928)    (8,125,804)      (95,642)
Net loss applicable to common shareholders          (3,509,607)   (6,864,152)    (9,222,682)     (308,212)
Basic and diluted loss per share                   $     (0.23)   $    (0.47)   $     (2.24)  $     (0.10)
-----------------------------------------------------------------------------------------------------------
</TABLE>

RESULTS OF OPERATIONS FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2005 COMPARED
TO THE THREE MONTH PERIOD ENDED MARCH 31, 2004

Consolidated results of operations

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                                            Three months ended     As a %    Three months ended     As a %
                                                     March 31,         of             March 31,         of
                                                          2005    revenue                  2004    revenue
-----------------------------------------------------------------------------------------------------------
<S>                                            <C>                  <C>         <C>                   <C>
Revenue                                        $    3,416,988       100%        $    2,192,343        100%

Cost of goods sold                                 (2,111,702)       62%            (1,178,397)        54%
                                        -------------------------------------------------------------------

Gross margin                                        1,305,286        38%             1,013,946         46%

Selling, general and administrative                (3,445,829)                      (3,035,445)
Research and development                           (1,187,558)                      (1,345,568)
Restructuring costs                                  (129,498)                               -
Amortization of intangibles                          (127,514)                        (129,166)
Foreign exchange loss                                 (24,372)                        (100,467)
Investment income                                      20,026                           90,797
Interest and financing expenses                      (352,937)                          (3,704)
                                        -------------------------------------------------------------------

Net loss                                       $   (3,942,396)                  $   (3,509,607)
-----------------------------------------------------------------------------------------------------------
</TABLE>

Revenue. The sale of Novacor LVAS implant kits ("implant kits") and related
peripheral equipment and services accounts for substantially all of WorldHeart's
revenues. WorldHeart primarily sells its products directly, except for certain
countries, including Japan, where we sell through distributors.

                                      -12-
<PAGE>

The composition of revenue is as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                                                   Three months ended         Three months ended
                                                                            March 31,                  March 31,
                                                                                 2005                       2004
                                                                            Number of                  Number of
                                                                   $          Units           $          Units
-----------------------------------------------------------------------------------------------------------------
<S>                                                            <C>                 <C>     <C>                <C>
Implant kits                                                   2,146,326           32      1,729,266          26

Peripherals and other                                          1,270,662                     463,077
                                                             ----------------------------------------------------

Revenue                                                        3,416,988                   2,192,343
-----------------------------------------------------------------------------------------------------------------
</TABLE>

Revenue for the first quarter of 2005 increased to approximately $3.4 million
representing an increase of 56% over the same quarter in 2004. Novacor LVAS
implant kit revenue increased to approximately $2.1 million for the quarter
ended March 31, 2005 compared to approximately $1.7 million for the quarter
ended March 31, 2004, representing an increase of 24%. Implant kits recognized
as revenue in the first quarter of 2005 totaled 32 compared to 26 in the first
quarter of 2004. The revenue per implant kit increased during the first quarter
of 2005. In the first quarter of 2004 there was a multiple implant kit
transaction with a discounted price per implant kit. We expect the average
revenue per implant kit to continue to increase as centers become enabled with
the required peripheral equipment and increase implant volume under the RELIANT
Trial.

An additional five implant kits were shipped and invoiced in the first quarter
of 2005; however, revenue relating to these implant kits was deferred at the
time of shipment as the transactions did not meet our revenue recognition
criteria. As at December 31, 2004, 17 implant kits had been shipped and invoiced
but had been deferred as revenue at the time of shipment as the transactions
also did not meet our revenue recognition criteria. Revenue was recognized on
four of these implant kits during the first quarter of 2005, leaving 18 implant
kits in deferred revenue at March 31, 2005. This represents approximately $1.1
million and will be recognized as the earnings process is completed in future
periods. The remaining balance in deferred revenue of approximately $564,000
mainly relates to undelivered components of multiple element transactions, which
will be recognized when delivered.

Peripherals and other revenues, including Novacor LVAS hardware and peripheral
sales and services for the quarter ended March 31, 2005, were approximately $1.3
million, which represents an increase of 174% over peripherals and other revenue
of approximately $460,000 recorded in the quarter ended March 31, 2004. We
anticipate that the proportionate sales may shift from hardware, peripheral and
service sales to implant kit sales as centers enrolled in our RELIANT Trial
increase implant volume under the RELIANT Trial. As at March 31, 2005, there
were 10 centers and nine patients enrolled in the RELIANT Trial.

Cost of goods sold. For the first quarter of 2005, the overall cost of goods
sold increased to 62% of revenue as compared to 54% for the first quarter of
2004.

Despite continued efforts to improve per unit manufacturing costs, we continued
to experience significant production inefficiencies during the first quarter of
2005 caused by supply shortages associated with the acceptance process for
components being manufactured by new suppliers and production volumes well below
capacity. This resulted in higher Novacor LVAS per unit production costs. We
expect the cost per unit to decrease as we continue to address the supply issues
and increase production.

Gross Margin. Gross margin for the three months ended March 31, 2005 decreased
to 38% of revenues from 46% of revenues for the three months ended March 31,
2004. This decrease was due in part to production inefficiencies. In addition,
during the first quarter of 2005, certain lower margin sales were made to new
centers for the initial equipment investment needed to begin a Novacor LVAS
implant program at those centers. Improvement in gross margin percentage is
expected as costs per unit decrease from contract manufacturing of some
components and production volume increases. In addition, we expect the effects
of higher incentives on start-up equipment initially offered to certain new
centers to decrease as the centers shift to purchasing implant kits in response
to usage.

                                      -13-
<PAGE>


Selling, general and administrative. Selling, general and administrative
expenses consist primarily of payroll and related expenses for executives,
sales, marketing, accounting and administrative personnel, professional fees,
communication expenses, promotional activities, costs associated with meeting
multi-jurisdictional regulatory requirements, insurance premiums, and occupancy
and other general corporate expenses.

The composition of selling, general and administrative expenses is as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                                               Three months ended         Three months ended
                                                                        March 31,                  March 31,
                                                                             2005                       2004
-------------------------------------------------------------------------------------------------------------
<S>                                                      <C>                       <C>
Selling                                                  $              1,768,114  $               1,196,555
General and administrative                                              1,677,715                  1,838,890
                                                       ------------------------------------------------------

                                                         $              3,445,829  $               3,035,445
-------------------------------------------------------------------------------------------------------------
</TABLE>

Selling, general and administrative expenses for the three months ended March
31, 2005 increased by approximately $410,000 or 14% over the same period in
2004. Selling expenses increased in the first quarter of 2005, as compared to
the first quarter of 2004, as we increased sales personnel and our sales and
marketing program initiatives in the United States and Europe. General and
administrative expenses have decreased in the first quarter of 2005 compared to
the first quarter of 2004 as we have started to experience the costs savings
associated with the consolidation of our North American operations.

Research and development. Research and development expenses consist principally
of payroll and related expenses for development staff, prototype manufacturing,
testing, and configuration of equipment expenses, trial expenses, and regulatory
affairs expenses.

Research and development expenses for the three months ended March 31, 2005
decreased by approximately $158,000 or 12% compared to the three months ended
March 31, 2004. Gross research and development expenditures excluding the impact
of government programs decreased by 20% to approximately $1.2 million in first
quarter of 2005 compared to approximately $1.5 million in the first quarter of
2004.

Lower research and development costs for the first quarter of 2005 compared to
the same period in 2004 reflect the reduction in expenses due to the
consolidation of the North American operations. Development work on the
next-generation pulsatile VAD will continue with initial clinical trials
expected to begin in 2007.

Investment tax credits for the three months ended March 31, 2004 totalled
approximately $137,000 and relate to Canadian provincial government assistance
received. We continue to review various tax credit programs but only record a
credit when collection of the claim is reasonably assured.

Restructuring costs. On August 25, 2004, we approved a plan to consolidate the
Ottawa, Ontario operations into our facilities in Oakland, California where the
Novacor LVAS is manufactured. The consolidation of the North American operations
into one location is expected to reduce ongoing business expenses and improve
operational efficiency and effectiveness.

We expect the restructuring to be completed by the end of June 2005 and expect
to incur total restructuring charges of approximately $2.7 million comprised of
employee severance costs of approximately $1.6 million; contract settlement
costs of approximately $724,000; write down of capital assets to net realizable
value of approximately $335,000; and other costs of approximately $67,000. As at
March 31, 2005, we revised our estimate of total restructuring costs to reflect
additional employee severances of approximately $26,000, changes in our
estimates that resulted in an increase in contract settlement costs of
approximately $3,800 and other restructuring costs of approximately $23,000 and
the receipt of proceeds from the disposition of capital assets of approximately
$4,000.

                                      -14-
<PAGE>

Restructuring costs accrued and expensed to date are as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                         Employee         Contract         Write
                                        severance       settlement          down            Other          Total
-----------------------------------------------------------------------------------------------------------------
<S>                                    <C>               <C>           <C>              <C>          <C>
Costs accrued during 2004              $1,396,037        $  57,653     $ 338,595        $  22,509    $ 1,814,794
Costs paid or settled in 2004           (795,923)                -      (338,595)          (8,624)    (1,143,142)
                                   ------------------------------------------------------------------------------

Balance in accrued liabilities
as at December 31, 2004                   600,114           57,653             -           13,885        671,652

Costs accrued during the period           110,539                -        (3,546)          22,505        129,498
Costs paid or settled in the period      (674,414)               -         3,546          (20,518)      (691,386)
                                   ------------------------------------------------------------------------------

Balance in accrued liabilities
as at March 31, 2005                   $   36,239        $  57,653     $       -        $  15,872    $   109,764
-----------------------------------------------------------------------------------------------------------------
</TABLE>

During the quarter ended March 31, 2005, actual restructuring costs of
approximately $129,000 have been recorded. Employee severance costs that have
been recorded represent the amounts employees have earned to March 31, 2005.
Contract settlement costs are recorded when notice is provided that the contract
is being terminated and WorldHeart ceases to use the right conveyed under the
contract. We expect to provide these notices in the second quarter of 2005 with
a cease use date of June 30, 2005. The capital assets were written down to their
net realizable value when the decision was made to consolidate the North
American operations and it was determined that the carrying value of the capital
assets was impaired. Other restructuring costs are recognized when the services
are actually received.

Amortization of intangibles. Amortization of intangibles for the first quarter
of 2005 was approximately $127,000 compared to approximately $129,000 for the
same period in 2004. The majority of the intangible assets arose from the
purchase of the Novacor business in June 2000. Most of these assets have now
reached the end of their original estimated useful life and have been fully
amortized. As at March 31, 2005, intangible assets totaling approximately
$127,000 remain unamortized.

Interest expense and financing costs. During the first quarter of 2005, interest
and financing costs of approximately $353,000 were recorded compared to costs of
approximately $4,000 during the first quarter of 2004. Interest expense and
financing costs in the three month period ended March 31, 2005, consisted mainly
of the interest and accretion related to the convertible debentures. These
non-cash interest charges will continue to accrete ratably on the convertible
debentures until their conversion or maturity. It is anticipated that all
outstanding debentures will be converted in accordance with the terms of the
MedQuest acquisition.

LIQUIDITY AND CAPITAL RESOURCES

Historically, WorldHeart has funded losses from operations through the sale of
equity and issuance of debt instruments. Combined with revenues, these funds
have provided us with the resources to operate our business, attract and retain
key personnel, fund our research and development program and clinical trials,
apply and obtain the necessary regulatory approvals and develop our technology
and products.

Liquidity. At March 31, 2005, WorldHeart had cash and cash equivalents of
approximately $4.5 million and net working capital of approximately $11.0
million compared to cash, cash equivalents and short-term investments of
approximately $8.8 million and net working capital of approximately $14.1
million at December 31, 2004.

Cash, cash equivalents and short-term investments decreased in the first quarter
of 2005 by approximately $4.3 million. This primarily related to cash used to
fund operating losses of approximately $4.2 million including a net pay down of
approximately $307,000 of accounts payable and accrued compensation and an
increase in inventory of approximately $341,000 and cash used in investing
activities of approximately $93,000 for the purchase of capital assets

On January 31, 2005, WorldHeart announced that it had entered in to a definitive
agreement to acquire the assets of MedQuest, subject to certain approvals,
consents, conditions and the approval of the shareholders. MedQuest, based in
Salt Lake City, Utah, is in the final development stages of its HeartQuest(TM)
ventricular assist device, a magnetically levitated centrifugal rotary blood
pump. As separate components of that transaction, WorldHeart also announced that
it had entered into definitive agreements to issue through a private placement,
approximately 8.9 million common shares, at $1.35 per share, for gross proceeds
of $12 million and raise approximately $10.7 million through the exercise of
10.7 million existing warrants at an exercise price of $1.00 per share, assuming
shareholder approval of a reduction in the Warrant exercise price from $1.55 to
$1.00 per share. These transactions are expected to be completed
contemporaneously with the MedQuest acquisition in the second quarter of 2005.
Upon completion of the private placement and warrant exercise it is anticipated
that WorldHeart will receive approximately $22.7 million of cash and extinguish
all of

                                      -15-
<PAGE>

its convertible debentures providing adequate resources to fund operations into
2006 when we may be required to obtain additional funding to sustain operations.

Our long-term working capital and capital requirements will depend upon numerous
factors, including the following: our continued focus on improving commercial
operations and viability through the expanded sales of Novacor LVAS; increasing
revenues through higher average selling prices and enrollment in the RELIANT
Trial; decreasing production costs through a manufacturing cost reduction
program; the rate of investment in our next-generation technologies, including
our under-development pulsatile VAD and the rotary VAD expected to be acquired
in the second quarter of 2005; the costs associated with clinical trials and the
approval process for the next-generation technologies; and our general efforts
to improve operational efficiency and effectiveness.

OUTLOOK

External environment. The market for effective pharmacological,
electro-physiological or device treatments for late-stage heart failure
continues to grow, and despite significant progress on many fronts, no
competitive breakthroughs have been announced or are believed to be imminent.
The number of diagnosed heart failure patients is increasing as a result of both
population demographic trends, and also as a response to the increasing number
of survivors from sudden cardiac events, many of whom subsequently develop
congestive heart failure. We believe the potential market for our heart assist
devices, with their current regulatory approvals, continues to be at least
100,000 patients per annum in North America, Europe, Japan and certain other
countries.

There is growing evidence of increasing clinical acceptance of the use of
mechanical circulatory assist therapies in the treatment of late stage heart
failure, and on two separate occasions in March 2003 and May 2004, the Centers
for Medicare and Medicaid Services in the United States announced the extension
of reimbursement coverage for both bridge and destination therapy VAD use. These
extensions have resulted in increased payments for procedures using such
devices. These developments are expected to continue to accelerate the use of
ventricular assist devices both in the United States and elsewhere. Also,
effective April 1, 2004, reimbursement in Japan for implantable VADs was
approved. Novacor LVAS is the only approved device of its kind in Japan.

In the United States, WorldHeart commenced a randomized equivalency trial called
RELIANT in the second quarter of 2004. In this trial the Novacor LVAS is being
randomized to the Thoratec HeartMate(R) XVE LVAS, which will be the control arm.
RELIANT is a randomized 40 center equivalency trial where patients will receive
a Novacor LVAS or Thoratec Corporation's Heartmate(R)XVE LVAS on a 2:1 ratio. It
is expected that data from this trial will support a Premarket Approval
Supplement, which will be submitted to the United States Food and Drug
Administration for the use of the Novacor LVAS by non-transplant eligible
patients (i.e. destination therapy).

We continue to believe that the long-term use or Destination Therapy market will
evolve rapidly when devices are accepted as reliable and durable. A wider
adoption of VADs as a Destination Therapy will likely occur with the
next-generation VADs and we believe that late-stage heart failure will be best
served by a combination of pulsatile and rotary flow VADs.

Internal environment. We expect to continue to incur net operating losses on a
quarterly basis, through 2006, assuming the completion of the MedQuest
acquisition in the second quarter of 2005. We believe that our commercial
operations associated with Novacor LVAS will continue to improve. We expect to
continue to increase revenues as a result of higher Novacor LVAS Implant Kit
sales, particularly in the United States. Enrollment in the RELIANT Trial
commenced in the second quarter of 2004 and implantation under the RELIANT Trial
commenced in the third quarter of 2004 and is expected to continue through 2005
and 2006. We also expect gross margin contribution to increase through a
combination of higher volumes, which should lead to lower per unit manufacturing
costs through more efficient and optimal manufacturing levels and continuation
of our manufacturing cost reduction program.

In addition, in the third quarter of 2004, a plan was put in place to
consolidate the Ottawa operations into our Oakland operations to further improve
operating cost structure, increase efficiency and improve effectiveness.

We expect to complete the acquisition of MedQuest in the second quarter of 2005
and commence an initial feasibility clinical trial of its magnetically levitated
centrifugal rotary VAD by the beginning of 2006. Initial commercial approvals
for the MedQuest rotary VAD are expected to occur in Europe in 2007 with
approvals for the MedQuest rotary VAD in the United States two years later.

Development work on the Novacor II pulsatile VAD will continue with anticipated
initial clinical trials in 2007, and anticipated initial commercial approvals in
Europe in 2008 and in the United States in 2010.

                                      -16-
<PAGE>

OTHER FACTORS

Current Product. WorldHeart's near-term commercial operations are exclusively
focused on its Novacor LVAS Implant Kit and related equipment and support.
Commercial success will therefore be dependant on our ability to continue to
increase Novacor LVAS sales. Novacor LVAS is approved for use by eligible heart
failure patients without limitation, in Europe and Japan and as a
bridge-to-transplant device in the United States and Canada. WorldHeart has
commenced an equivalency clinical trial in the second quarter of 2004 in the
United States called RELIANT in which patients will be randomized to receive
either the Novacor LVAS or the Thoratec HeartMate(R) XVE LVAS. It is expected
that data from this clinical trial will support a Premarket Approval Supplement,
which will be submitted to the United States Food and Drug Administration, for
the use of the Novacor LVAS by non-transplant eligible patients (i.e.
destination therapy). Implants under this trial are eligible for reimbursement
by the Centers for Medicare and Medicaid Services ("CMS") and certain private
insurers. We believe that approval of the Novacor LVAS for long-term or
destination therapy use in the United States would increase the market for the
Novacor LVAS substantially.

Pulsatile VADs. WorldHeart has several competitors with commercially approved
pulsatile VADs having pumps that are externally located or abdominally
implanted. The devices which are developed by the Corporation's competitors are
now primarily used as bridges to transplant, although one product (Thoratec
HeartMate(R) XVE) was approved in 2002 for a destination therapy indication for
use in the United States. Some of WorldHeart's existing known competitors have
significantly greater financial, production and marketing resources. There can
be no assurance that the development program, including pre-clinical and human
clinical trials will be successful or that the necessary regulatory approvals
will be received.

WorldHeart believes that our pulsatile next-generation implantable VAD is the
only pulsatile device that is currently at an advanced stage of development.
During 2002 management merged the three next-generation VAD development programs
into one VAD program. We expect clinical trials for our next-generation
implantable pulsatile VAD will commence in 2007. However, there can be no
assurance that the development program, including pre-clinical and human
clinical trials will be successful or that the necessary regulatory approvals
will be received.

Non-pulsatile VADs. As discussed above, subsequent to year-end WorldHeart
entered into a definitive agreement to purchase the assets of MedQuest including
its rotary flow, centrifugal, magnetically levitated next generation VAD
technology. We expect clinical trials for our next-generation implantable
non-pulsatile VAD will commence in early 2006. However, there can be no
assurance that the development program, including pre-clinical and human
clinical trials, will be successful or that the necessary regulatory approvals
will be received.
Research and development by WorldHeart's competitors is proceeding for several
next-generation non-pulsatile continuous flow assist devices. Certain of these
devices have received CE Mark in Europe and are in clinical trials in the United
States and Europe. It has not been determined whether these non-pulsatile
devices will be suitable for long-term use.

Novacor LVAS Sales. Sales of the Novacor LVAS contribute to overhead and other
indirect costs of producing the Novacor LVAS product. To date, however, at
current volumes the Novacor commercial operations have contributed only modest
gross margin or have resulted in gross margin deficits. We expect to continue to
increase gross margin through increased sales and reduced manufacturing costs,
however, to the extent that we are unable to do so, there is risk that we could
be adversely affected and the Novacor operations could continue to consume cash
resources.

NEW ACCOUNTING PRONOUNCEMENTS

In June 2001, the FASB issued SFAS No. 148,which amended the transitional
provisions of SFAS No. 123 for companies electing to recognize employee
stock-based compensation using the fair value based method. The provisions of
FASB No. 148 will be effective for years beginning on or after January 1, 2006.
In addition, during 2004, the FASB issued SFAS No. 123R, which also amended the
provisions of SFAS No. 123. The provisions of FASB No. 123R will be effective
for years beginning on or after January 1, 2006. The Corporation plans on
adopting these new pronouncements in 2006.

Item 3.  Controls and Procedures.

Evaluation of disclosure controls and procedures. Based on their evaluation of
our disclosure controls and procedures (as defined in Rules 13a-14(c) and
15d-14(c) under the exchange act) as of March 31, 2005, our president and chief
executive officer (principal executive officer) and our chief financial officer
(principal accounting and financial officer) have concluded that our disclosure
controls and procedures are designed to ensure that information required to be
disclosed in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission's rules and forms are operating in an
effective manner.
Changes in internal controls over financial reporting. There was no change in
our internal controls over financial reporting that occurred during the quarter
ended March 31, 2005, that has materially affected, or is reasonably likely to
materially affect, our internal controls over financial reporting.

                                      -17-
<PAGE>

                           PART II--OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K.

(a)  Exhibits

Exhibit 10.1        Letter agreement dated June 23, 2000, as amended on October
                    28, 2004, between the Company and Jal S. Jassawalla.

Exhibit 31.1        Certification of Principal Executive Officer pursuant to
                    Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2        Certification of Principal Financial Officer pursuant to
                    Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1        Certification of Principal Executive Officer pursuant to
                    Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.
                    1350.

Exhibit 32.2        Certification of Principal Financial Officer pursuant to
                    Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.
                    1350.

(b)  During the quarter ended March 31, 2004, the Company filed the following
     reports on Form 8-K:

Date:              Item:      Description:
-----              ----       ------------

April 11, 2005     8.01       Concerning its announcement that the financial
                              statements for the year ended December 31, 2004
                              contained a note describing the going concern
                              assumption as it related to the financial
                              statements and requirements for the Company to
                              raise additional capital.

April 28, 2005     2.02       Announcing financial results for the quarter ended
                              March 31, 2005

                                      -18-
<PAGE>

SIGNATURES

     In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                              World Heart Corporation
                                              ----------------------------------
                                              (Registrant)

Date     May 16, 2005                         /s/ Jal S. Jassawalla
         --------------------------           ----------------------------------
                                              (Signature)*

Date     May 16, 2005                         /s/ D. Mark Goudie
         --------------------------           ----------------------------------
                                              (Signature)*

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