After offering investors a solid second chance to take a look at the company during a recent share price pullback, news of a European CE Mark approval sent shares of Sunshine Heart (NASDAQ:SSH) flying once again to close out the month of July as the company was newly positioned to capitalize on commercial sales while a North American trial geared toward an eventual FDA approval could initiate later this year in the United States. While that trial milestone is still in place and the CE Mark approval allows the company to commence registering commercial sales of its product, Sunshine received another round of milestone news to open the new trading week.
According to a press release issued during the morning hours on Monday, Sunshine has received conditional approval from the US FDA to utilize its next-generation C-Pulse device for all patients "currently on its C-Pulse device at all U.S. sites upon Institutional Review Board (IRB) approval." Additionally, this next-generation device, which was also approved by Health Canada earlier this year, will also be used in the upcoming clinical trial in the United States.
Sunshine's C-Pulse Heart Assist system treats patients with Class III and ambulatory Class IV heart failure and has thus far in development demonstrated the ability to reverse the effects of heart failure, not only just treat it. Based on patient feedback after short and long term reviews of treatment, the company developed its "next-generation" device that will be the center of development from here on out.
Sunshine shares had already exploded earlier this month, running from roughly $3 to over $17 at one point, as encouraging news regarding the potential of C-Pulse to quickly become the standard-of-care in treating heart failure made the rounds, but had since retreated to the $10 price level as the swing, momentum and day traders exited with huge profits. Since that point, shares again visited prices below the $9 mark before Monday's rebound on news saw share once again hit prices of over $10.
With the European approval now in the bag and North American regulators seemingly confident about the company's progress, Sunshine can move ahead with plans to register its first commercial sales later this year while initiating the pivotal US trial. Those potential catalysts should line up nicely with the continued examination of long term results from patients participating in the North American feasibility trial and perennially keep SSH on the radar as a potential growth story.
Given the relatively modest market cap of the company as the C-Pulse device makes its way through various regulatory processes, consideration should also be given to Sunshine Heart's status as a potential takeover or merger target. The market cap is currently relative chump change for large medical device companies - whose market caps are in the billions - and its likely that, if C-Pulse continues to prove successful, one of the big players would look to acquire the technology. Each and every bit of this run of milestone news would make the company that much more of an attractive target - for both investors and potential suitors.
Shares gapped higher to open the day on Monday and were trading over $10 on the news. Still one to watch, especially on every pullback.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.