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Brief research report on the undervalued investment opportunity: Sunshine Heart, Inc. (NASDAQ: SSH)
Sunshine Heart focuses on an innovative cardiac assist therapy to treat heart patients who represent a large and under-served market segment. Company’s lead product, C-Pulse® Heart Assist System, is an innovative approach to assist the heart’s function, not replace it and may be implanted using a minimally invasive approach.
Heart failure (named Class III or moderate and ambulatory Class IV or severe heart failure) is a common condition where for the patients with the heart problems the heart is unable to pump sufficient blood to meet the body’s demand. Millions of people are affected with this condition in the USA alone with the half of million new cases added annually.
Sunshine’s investigational C-Pulse Heart Assist System is the solution for people under these conditions. C-Pulse increased the blood flow from the heart, added more oxygen to the heart muscle and decreased the pressure for the heart. As an output: relief of shortness of breath, increased physical activity, and improved cardiac function of the patient.
C-Pulse is most effective solution on a market today: during the implanting procedure the surgeon does not make a system incision on the heart itself or to any major vessels hence no blood-thinning medications required. Patient stays in the ICU is about 3 days and discharged from the hospital by surgeon and cardiologist depends on the patient’s medical conditions and ability to walk without aid for short distances.
C-Pulse System is currently being studied in seven hospitals in the United States under the Food and Drug Administration (FDA) guidelines. Recently Sunshine Heart’s has been granted approval by Health Canada to use its next generation C-Pulse® Heart Assist System driver in ongoing clinical studies at Royal Victoria Hospital in Montreal, Canada where four patients have been implanted with the initial C-Pulse System. The company has received Health Canada approval to expand the number of participants in the trial to 20 patients.
Sunshine Heart, Inc.
12988 Valley View Road
Eden Prairie, MN 55344
Tel +1 952 345 4200
William Peters, MD, Sunshine Heart’s Chief Technical Officer, invented the proprietary C-Pulse technology and served as Sunshine Heart’s initial CEO upon co-founding the Company in 1999. Previously, Dr. Peters has developed an endovascular cardiopulmonary bypass system for minimally invasive cardiac surgery, which was commercialized by Heartport Inc., that was acquired by Johnson & Johnson (NYSE: JNJ).
When company transformed from the development to the pre-production phase, marketing guru needs to take a leadership instead of the scientist to drive the company success on the market place. That’s why David Rosa, who has over 19 years experience in the medical device industry through variety of the executive management positions, joined Sunshine Heart as the Chief Executive Officer in October 2009.
Take a brief look at the SSH’s board of directors: all of those medical and financial gurus including the Chairman, Nicholas Callinan, non-executive members such as Geoffrey Brooke, MD, Paul Buckman, Donal O’Dwyer or Greg Waller know well “where the money” game when they joined Sunshine Heart ‘s BOD.
Sunshine Heart’s current market capitalization is just a little above $30 million for the $3 billion market for the Class III and $400 million for the severe, or Class IV, heart failure. Not a direct SSH competitor, Heartware International Inc. (HTWR), who develops and manufactures miniaturized implantable heart pumps or ventricular assist devices (VAD) for the treatment of advanced heart failure, has a market capitalization of $1.26 billion or 42 fold of the SSH’s market cap. Sunshine Heart with its C-Pulse unique technologies may grow to the HTWR rank in some time, but even capturing just a few percent of “heart failure” market prospect SSH would have potential sales 5X their tiny $30 million capitalization. Thus we came with a very conservative estimate of the SSH share/price at about $12 to $15 in the short-term.
Last, but not least: SSH is expecting a CE Mark approval in Europe that could be announced any day. News for the permission of a pivotal C-Pulse trial in the United States, which company submitted to the FDA, may hit newswires any day too.
SSH free trading shares count is just above 2.6 million. Such as a low number of floating shares usually caused the high share/price volatility. Sophisticated investors may use it in their advantages by buying the “dips” at comfortable share/price levels.
Sunshine Heart, Inc. (SSH) is a heavily undervalued investment opportunity. Company and its amazing technologies are almost unknown to the broad investment community yet but not for long. Join us on Sunshine Heart’s board before mainstream media blows this stock up.
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