Sunshine Heart Inc (NASDAQ:SSH) announced its financial results and provided a corporate update for the second quarter of 2015. The Company will host a conference call and webcast at 9:00 AM ET today to discuss its financial results and provide an update on its ongoing clinical studies.

“The past quarter was clearly a critical one for the Company, highlighted by the resumption of enrollment in the COUNTER HF™ pivotal study. We are pleased we were able to resolve this matter with the FDA in an expeditious manner and are especially encouraged with the speed in which we are reactivating centers. In addition, we are making substantial progress in other initiatives in both the research and product development areas,” commented Dave Rosa, President and Chief Executive Officer of Sunshine Heart.

Second Quarter Corporate Highlights:

  • Resumption of enrollment in COUNTER HF US pivotal study
  • Conducted investigator meeting with 25 participating centers
  • 7 sites activated during the second quarter after receiving Investigational Review Board (IRB) approval. To date, a total of 15 of 27 sites have been activated
  • The 15th OPTIONS HF EU patient was implanted
  • Completed pre-clinical study plans investigating the effect of C-Pulse® with respect to pulmonary artery hypertension with Dr. Mark Slaughterof Jewish Hospital in Louisville Kentucky
  • 3 scientific papers were presented covering improved driveline infection rate, C-Pulse efficacy in CRT patients and pre-clinical results from CPII. 2 additional papers have been submitted to AHA on improved hospitalization rates and clinical hemodynamic data demonstrating novel mechanism of action.

Second Quarter Financial Highlights:

  • Cash used in operations was $12.8 million in the first six months of 2015 vs. $11.9 million in the first six months of 2014
  • Additional $2.0 million term loan from Silicon Valley Bank funded based on FDA approval for interim analysis
  • Cash and cash equivalents on hand at June 30, 2015 was $33.4 million vs. $31.3 million at year-end 2014

As previously reported, the COUNTER HF study was temporarily paused this past March after Sunshine Heart communicated to the FDA four deaths in the treatment arm of the study. The deaths were independently adjudicated as not being device or therapy related and, on May 26th, the Company announced that the FDA had approved resumption of patient enrollment into the study. Upon receiving the FDA’s approval, the Company immediately provided participating sites all of the required documentation for IRB submission. To date, 15 of 27 sites have received IRB approval and are activated. Sunshine Heart currently expects the remaining 12 sites to receive approval by the end of August. Also, the Company is pleased to report that the first 3 patients have been enrolled in COUNTER HF shortly after sites were activated for a total of 51 enrollments in the study to date. The Company has a growing pipeline of patients that are being evaluated for enrollment in the third quarter of 2015. In addition, Sunshine Heart’s newly formed Physician Subject Selection Committee met to review the profiles of these initial patients and the process was both efficient and expeditious.

A COUNTER HF study investigator meeting was held on May 7-8, 2015 to prepare the study sites for resumption of enrollment. The Company is pleased to report that while the study remained in pause during this timeframe, 25 centers attended. There was a high level of enthusiasm among attending physicians and clinicians and the Company plans to post a video on its website from sessions held at the meeting.

The European based OPTIONS HF study implanted its 15th patient, which was the first referred by Professor Hüseyin Ince. Professor Ince is head of the cardiology department at the Vivantes clinic Friedrichshain and Vivantes clinic Urban in Berlin.

A key development during the second quarter was the Company’s continued work around exploring the breadth and potential of the C-Pulse technology platform. Clinical data was recently obtained from OPTIONS HF patients, in collaboration with Prof. Segers’ lab at University of Ghent,Belgium, to quantify the effects of C-Pulse on arterial stiffness. This is a first of its kind study, employing noninvasive measurements of pressure and flow in the ascending aorta to quantify the unloading effects of C-Pulse which may be mediated by relaxing the muscle in the walls of blood vessels in the peripheral circulation. These unique observations may be due to neuromodulation effects of C-Pulse where compression of the ascending aorta may lead to signals being sent to the brain resulting in alteration of sympathetic nerve activity to the blood vessels, kidney and heart. Additionally, physician initiated studies are being planned and the Company is providing technical support for these studies where the physicians are obtaining clinical data to directly measure sympathetic nerve activity during device ON/OFF phases. Pre-clinical studies evaluating the effects of C-Pulse for pulmonary artery hypertension are also planned to begin in the third quarter at The University of Louisville. Initial observations have indicated counterpulsation of the pulmonary artery may lead to relaxation of the pulmonary blood vessels. Based on physician feedback, this may be possibly related to release of nitric oxide. The studies will be designed to measure hemodynamic and hormonal mechanisms.

During the quarter, Sunshine Heart also continued to make substantial progress regarding development of its fully implantable system. Chronic animal studies are expected to occur in the latter half of 2015 and the Company is preparing to commence a first-in-human study using the novel transcutaneous energy transmission (TET) system and a new smaller implantable pump in Q3 2016. The study will initially enroll patients at hospitals outside the US, and will target patients suffering from advanced Class III/IV heart failure, similar to the patient population of Sunshine Heart’s current ongoing COUNTER HF Study. Feasibility of implant, safety and short term durability will be the primary objectives. Performance and efficacy data will be collected to evaluate patient quality of life, freedom from heart failure symptoms and other standard heart failure measures including the ability to bridge to other therapies.

Finally, Thoratec Corporation, a shareholder of Sunshine Heart, with board observation rights, announced on July 22, 2015 that it has entered into a definitive agreement pursuant to which it will be acquired by St. Jude Medical. If the proposed transaction is consummated, Sunshine Heart expects St. Jude will succeed to the rights of Thoratec Corporation under the terms of the observation rights agreement. There can be no assurance that the proposed transaction will occur, and Sunshine Heart makes no representations regarding the proposed transaction, Thoratec Corporation or St. Jude Medical.


During the quarter, there were a number of important presentations and papers submitted including:

  • ISHLT (Nice) presentation – C-Pulse System Extra-Aortic Counterpulsation for Heart Failure: Driveline Infections and Management – PresentedApril 2015: Dr. Mark Slaughter
  • HRS (Boston) presentation – Clinical experience with the C-Pulse Extra Aortic Counterpulsation system in patients previously treated with Optimal Medical Therapy and CRT – Presented May 2015: Dr. William Abraham
  • ASAIO (Chicago) presentation – Development and Chronic In-vivo testing of fully implantable extra-aortic counterpulsation device – PresentedJune 2015: Dr. William Cohn

Two papers were submitted to AHA (Orlando) by Dr. Sanjeev Aggarwal and Dr. Eduardo Rame for presentation:

  • Reduced Heart Failure Readmission Rates: Clinical Experience with the C-Pulse® Extra-Aortic Counterpulsation System (Dr. Sanjeev Aggarwal)
  • Arterial and Cardiac Hemodynamics in Advanced HF Patients Implanted with the C-Pulse Counterpulsation Device: Implications for Myocardial Recovery (Dr. Eduardo Rame)


The Company’s revenue to date has been generated by sales of the C-Pulse System to hospitals and clinics in conjunction with its U.S. clinical study. The Company did not record any revenue under its U.S. COUNTER HF study during the second quarter of 2015 or 2014. There were no enrollments into the study during the second quarter of 2015 as the Company worked to resume enrollment after the May 2015 FDA approval to resume the study. The Company’s results for the six months ended June 30, 2015 include revenue of $59,000, the same amount for the same period in 2014. The Company has obtained reimbursement for some, but not all of its implant procedures, because some private insurance companies and certain governmental institutions have a non-coverage policy for experimental or investigational procedures.

Product costs incurred for the Company’s clinical studies are deemed to be development costs and, accordingly, are expensed to research and development as incurred.

Operating expenses in the second quarter of 2015 totaled $6.3 million, compared to $6.7 million in the second quarter of 2014. Equity compensation expense included in operating expenses totaled $0.7 million for the second quarter of 2015 and $0.8 million for the comparable period in 2014. Excluding equity compensation expense, non-GAAP operating expenses totaled $5.6 million and $5.9 million for the three months ended June 30, 2015 and 2014, respectively. The decrease in operating expenses during the second quarter of 2015 is the result of decreased spending in the COUNTER HF pivotal study as a result of the clinical study pause that was announced in March 2015. The Company received FDA approval to resume enrollment in the study in May 2015, and is currently in the process of reactivating its clinical sites and restarting patient enrollment into the study.

Operating expenses for the six months ended June 30, 2015 were $13.4 million, compared to $13.1 million in the same period of 2014. Equity compensation expense included in operating expenses during the first half of 2015 totaled $1.6 million, compared to $1.5 million during the same period of 2014. Excluding equity compensation expense, non-GAAP operating expenses totaled $11.8 million and $11.6 million for the six months ended June 30, 2015 and 2014, respectively. The slight increase over the prior year is primarily attributable to increased development expenses associated with the Company’s fully-implantable system, offset by decreased clinical research expenses related to the pause of the Company’s U.S. pivotal study, which was announced in March 2015 .

Net loss in the second quarter of 2015 was $6.4 million, or $0.35 per share, compared to $6.4 million, or $0.38 per share, in the second quarter of 2014. Excluding equity compensation expense, second quarter 2015 and 2014, net non-GAAP losses totaled $5.7 million, or $0.31 per share, and$5.6 million, or $0.33 per share, respectively. Net loss in the six months ended June 30, 2015 was $13.4 million, or $0.75 per share, compared to$12.7 million, or $0.75 per share, in the six months ended June 30, 2014. Excluding equity compensation expense, net non-GAAP losses for the six months ended June 30, 2015 and 2014 totaled $11.9 million, or $0.66 per share, and $11.2 million, or $0.67 per share, respectively.

Cash used in operating activities totaled $12.8 million for the six months ended June 30, 2015 compared to $11.9 million for the same period of 2014, with the increase driven primarily by higher research and development expenses as well as interest expense on outstanding debt. During the first six months of 2015, the Company received net proceeds from financing activities of $15.1 million, as follows: $7.1 million from the sale of common shares under the Company’s existing “at the market” facility, and $8.0 million from borrowings under a $10.0 million debt facility withSilicon Valley Bank. The Company had $33.4 million in cash and cash equivalents on June 30, 2015, compared to $31.3 million at December 31, 2014. (Original Source)

Shares of Sunshine Heart Inc closed yesterday at $2.97. SSH has a 1-year high of $6.90 and a 1-year low of $2.41. The stock’s 50-day moving average is $3.49 and its 200-day moving average is $4.29.

On the ratings front, Sunshine Heart has been the subject of a number of recent research reports. In a report issued on May 5, Oppenheimer analyst Steven Lichtman reiterated a Buy rating on SSH, with a price target of $12, which represents a potential upside of 304.0% from where the stock is currently trading. Separately, on the same day, Canaccord Genuity’s Jason Mills reiterated a Buy rating on the stock and has a price target of $7.50.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Steven Lichtman and Jason Mills have a total average return of 2.2% and 4.7% respectively. Lichtman has a success rate of 58.6% and is ranked #1397 out of 3724 analysts, while Mills has a success rate of 52.7% and is ranked #840.

Sunshine Heart Inc is an early stage medical device company. It is engaged in developing, manufacturing and commercializing its C-Pulse Heart System for treatment of Class III and ambulatory Class IV heart failure.