By Jake King
In May, following a $14M equity financing, PropThink outlined why Sunshine Heart (SSH) was an attractive opportunity at less than $6.00 per share and a $60M valuation. Namely the pricing disparity between Sunshine Heart and competing, larger LVAD players offers a clear picture of what Sunshine Heart might look like in five years. You can read the full article here. Additionally, earlier this month we laid out why we're still bullish on SSH following the company's first-ever quarterly conference call, here. Sunshine Heart has a number of catalysts upcoming, despite what looks like a relatively quiet few years as the company awaits key trial results from a domestic study of the C-Pulse device.
Considering the precipitous climb in Sunshine Heart's share price and increasing attention from the healthcare investing community in the last two months, PropThink.com is orchestrating an exclusive conference call and interview with Sunshine Heart Chief Executive Officer David Rosa for the afternoon of September 3rd. Much has been written about Sunshine Heart in the past month, and as with any rapidly appreciating healthcare stock, questions about the underlying technology and business have begun to materialize. Facilitating access to management for an oft-overlooked investing community - retail investors - is one of our goals at PropThink, thus this upcoming conference call will be structured around an open Q&A with Mr. Rosa - interested investors are invited to participate free of cost. Sunshine Heart has been a major win for PropThink since we suggested investors pick up shares around $5.25 in May of this year. SSH opened trading on Friday at $11.01 after hitting a new 52-week high of $13.80 on the 26th. Nevertheless, we continue to like the long-term potential in Sunshine Heart - at $130M, we believe the small company is still attractive in relation to its long-term prospects.
Sunshine Heart takes a novel approach to the treatment of late-stage heart failure in the development of its lead heart assist device, the C-Pulse system, which may mitigate the need for heart replacement surgery in patients with congestive heart failure. Unlike competing products developed by incumbents Thoratec (THOR) and Heartware (HTWR), Sunshine Heart's approach brings a much less invasive product, both in terms of surgical installation and function, to an ailing patient population. While most Left Ventricular Assist Devices (LVADs) used in late-stage heart failure patients improve heart function with a small, constant-flow or pulsatile impeller installed within the patient's bloodstream, the C-Pulse uses a thumbprint-sized balloon and cuff wrapped around the aorta to improve blood flow and reduce burden on the failing heart. With no direct blood contact, C-Pulse may eliminate the need for chronic anticoagulants and antiplatelets in this patient population - and reduce the occurrence of strokes. Furthermore, Sunshine Heart is tackling an unmet market in Stage III heart failure patients, those at risk of progressing to the final and most severe stage of the disease, Class IV. Study results to date indicate that Sunshine Heart's approach may be an ideal methodology.
Sunshine Heart has made significant progress in developing its lead product candidate since (and arguably because) Mr. Rosa joined the small company in 2009. C-Pulse IPO'd in 2004 on the Australian Securities Exchange (ASX), but progress at the firm had been disappointingly slow following a feasibility trial that began enrolling five years after the IPO, in 2009, had initiated just four of 20 planned patients when Rosa joined the company in October of the same year. Twelve months later, 16 patients had been implanted with the new device and SSH was well on its way to completing the design of a smaller external driver and powersource for the C-Pulse. By the time the company listed on the NASDAQ early in 2012, the company had compelling results from its small feasibility study in hand and was preparing for a sizable trial to begin in the U.S. The 388-patient COUNTER-HF trial, which began enrolling patients earlier this year, is designed to establish C-Pulse's safety and efficacy in a large population of Class III and IVa patients ahead of a Premarket Approval Application with the U.S. Food and Drug Administration. Likewise, C-Pulse was granted a CE Mark in Europe, and a 50-patient open-label trial was initiated this year.
Mr. Rosa joined Sunshine Heart in '09 from a position as President and CEO of Milksmart, a privately held agricultural technology firm. But Mr. Rosa's management background has centered predominantly on the cardiovascular medical device space. Prior to his time at Milksmart, Rosa spent four years as VP of Global Marketing for Cardiac Surgery and Cardiology at St. Jude Medical (STJ), and as CEO of the privately held A-Med Systems, a company that designs devices for acute heart failure. Likewise, from '95-'99 he held varying managerial positions at SCIMED Life Systems, another cardiovascular-centric and privately held company that was acquired by Boston Scientific in 1994, where it continues to operate as a subsidiary.
We invite investors to participate in this exclusive conference call with Mr. Rosa on Tuesday, September 3rd, at 3:00PM EDT. Mr. Rosa will offer his insight on the C-Pulse system and Sunshine Heart in a guided interview before the call is turned over to participants for an open Q&A. Details and free registration can be found at Propthink.com/SunshineHeartCall, or by clicking here.
Questions about the event can be directed to firstname.lastname@example.org.
Additional disclosure: PropThink is a team of editors, analysts, and writers. This article was written by Jake King. We did not receive compensation for this article, and we have no business relationship with any company whose stock is mentioned in this article. Use of PropThink’s research is at your own risk. You should do your own research and due diligence before making any investment decision with respect to securities covered herein. You should assume that as of the publication date of any report or letter, PropThink, LLC and persons or entities with whom it has relationships (collectively referred to as "PropThink") has a position in all stocks (and/or options of the stock) covered herein that is consistent with the position set forth in our research report. Following publication of any report or letter, PropThink intends to continue transacting in the securities covered herein, and we may be long, short, or neutral at any time hereafter regardless of our initial recommendation. To the best of our knowledge and belief, all information contained herein is accurate and reliable, and has been obtained from public sources we believe to be accurate and reliable, and not from company insiders or persons who have a relationship with company insiders. Our full disclaimer is available at www.propthink.com/disclaimer.