This is a pilot study to evaluate the safety and efficacy of the Algisyl-LVR™ device. The purpose of this study is to investigate Algisyl-LVR™ employed as a method of left ventricular augmentation and restoration in patients with dilated cardiomyopathy. Algisyl-LVR™ will be injected into the myocardium under direct visualization during the surgical procedure.

This study will evaluate the concept that direct mid left ventricular (LV) intramyocardial injections of Alginate hydrogel implants into the free wall of the failing LV will reduce LV size, restore LV shape, lower LV wall stress and improve global LV function.

The Primary Efficacy Endpoint of the study is the change in Peak VO2 (maximum oxygen uptake) from baseline to 6 months of follow-up. The Primary Safety Endpoint of the study is to estimate the 30 day mortality associated with the implantation of the Algisyl-LVR device

The hypothesis of the study is that there is a statistically significant difference in change in Peak VO2 from baseline to 6 month follow-up when the medically managed arm is compared to the Algisyl-LVR arm, i.e. the Algisyl LVR arm is superior to medical management.

This is a prospective, randomized, parallel group evaluation of the safety and effectiveness of Algisyl-LVR in patients with dilated cardiomyopathy of either ischemic or non-ischemic origin. The evaluation for primary efficacy endpoint (Peak VO2) at 6 months will be investigator-blinded. The primary safety endpoint, while not blinded, is 30 day all-cause mortality and an objective assessment. The remaining study endpoints will evaluate the effects of the device through the evaluation of functional, structural, biochemical, and electrocardiographic evaluations at 6 and 12 months. Evaluation of adverse events and these assessments will also provide evidence of the safety profile of the device in patients with dilated cardiomyopathy.

Pre-enrollment baseline patient evaluation will include clinical assessment, assessment of New York Heart Association (NYHA) functional class, blood tests, chest x-ray, echocardiography, magnetic resonance imaging (MRI), electrocardiogram, cardiopulmonary exercise testing, submaximal exercise testing, and quality of life assessments. Blinded central evaluation will be performed for measures of cardiopulmonary exercise testing, blood tests, Holter Monitors and cardiac imaging.

After written patient informed consent has been obtained and verification of eligibility, patients who meet the selection criteria will be randomized. All patients must be on stable, evidence-based therapy for heart failure. Patients assigned to the Investigational Device group will have the Algisyl-LVR™ device (implants) administered during a surgical procedure. For patients randomized to the investigational device group, the investigator will make every attempt to minimize the time between randomization and surgery (i.e, no more than 7 to 10 days). Patients will be considered part of the study cohort as soon as they have been randomly allocated to either the Treatment or Control group. This time point will also be considered as the start of follow-up. For patients allocated to the Investigational Device group, the starting point of follow-up for surgical mortality and surgical complications will start as of the date when the surgical procedure is performed (or attempted). The acute response to device implant will be monitored intraoperatively via continuous electrocardiographic cardiac monitoring, arterial pressure lines, transesophageal echocardiography (TEE), and pulmonary artery catheter. Patients receiving the investigational device are expected to remain hospitalized for 5 to 14 days. Patients assigned to the control group will continue on standard medical therapy (without the investigational device).

Follow-up in this study is divided into two phases. During the first phase, referred to as the "efficacy phase", repeat testing of patient functional and cardiac structural parameters will be conducted at follow-up visits scheduled at 3 months and 6 months, and every 6 months thereafter. Follow-up testing will be supplemented by a 30 day (post randomization) telephone contact with all patients. The efficacy phase of the trial will end on a common closing date after a minimum of 6 months of follow-up (i.e., after the last patient enrolled has been completed the 6 month visit). At that point data analysis will be performed and an initial study report will be generated. Following completion of the efficacy phase, long-term monitoring will continue through each patient's 24-month visit. This second phase is referred to as the "extended follow-up phase". During this phase, data collection will be focused on long-term safety and will be conducted at 6-month intervals.

Patient's randomized to the control group and completing the 12 month visit will be provided the option of enrolling in Clinical Study LSH-11-001: An Open Label Rollover Trial for Patients Randomized to the Control Group of Study LSH-10-001. Patients must continue to meet the inclusion and exclusion criteria as stated in Study LSH-10-001 to be eligible for Study LSH-11-001.

Inclusion Criteria:

1. The patients must be able and willing to give written informed consent

2. The patients will be adult (age ≥ 18 years and ≤ 79 years) males or females

3. The patients must be on stable, evidence-based therapy for heart failure

   * Note: CRT or CRT-D are acceptable co-therapy, if placed > 3 months before randomization or the investigator does not anticipate within 6 months after randomization

4. The patients will have a left ventricular ejection fraction equal to or less than 35% via echocardiography, cardiac catheterization, radionuclide scan, or magnetic resonance imaging (measured within the last 30 days)

5. The patients will have a left ventricular end diastolic dimension indexed to body surface area (LVEDDi) of 30 to 40mm/m2 (LVEDD/BSA) (measured within the last 30 days)

6. Patients must have symptomatic heart failure with a Peak VO2 of 9.0 - 14.5 ml/min/kg (performed using a bicycle ergometer). Patients must perform two CPX tests (within 30 days of randomization and performed at least 20 hours apart) that differ by no more than 15% in the observed value for Peak VO2 and have a mean value of 9.0 - 14.5 ml/min/kg from these two tests.

7. Patient's surgical risk must be considered reasonable and the evaluation of surgical risk should include review of coronary and left ventricular angiography

8. If female, the patients must be (a) post-menopausal, (b) surgically sterile, or (c) using adequate birth control and have a negative serum pregnancy test within 7 days prior to administration of study device

Exclusion Criteria:

1. Patients for whom it is planned to receive CABG, MVR, heart transplantation or LVAD within the next 6 months.
2. Patients presenting with cardiogenic shock.
3. Patients who have undergone a previous mid-sternotomy surgical procedure are excluded unless the surgeon's assessment is that the left sided limited thoracotomy is feasible and considered reasonable surgical risk.
4. Patients presenting with a restrictive cardiomyopathy such as due to amyloidosis, sarcoidosis, or hemochromatosis
5. Patient with a history of constrictive pericarditis
6. Patients with a Q wave myocardial infarction (MI) within the last 30 days
7. Patients with a recent history of stroke (within 60 days prior to the surgical procedure)
8. A left ventricular (LV) wall thickness of the LV free-wall, at the mid-ventricular level, of less than 8 mm (screening echocardiography must confirm a minimum wall thickness of 8 mm)
9. Patients with a serum creatinine > 2.5 mg/dL
10. Clinically significant liver enzyme abnormalities, i.e., AST(SGOT) and ALT (SGPT) more than 2.5 times the upper limit of normal
11. History of severe COPD (i.e., FEV 1< 1 liter or FEV1 < 50% predicted)
12. The patients will not be receiving concurrently an investigational Product in another clinical trial or have received an investigational Product in another clinical trial in the 30 days prior to enrollment
13. A life expectancy of less than 1 year or any other condition that, in the opinion of the clinical investigator, might compromise any aspect of the trial