Sunshine Heart: A Promising Treatment for Heart Failure Patients

Finally, there's the risk that goes with a clinical trial. Investors may perceive the risks with Sunshine Heart higher because C-Pulse is a new and relatively unproven method to treat heart failure. The company must also convince the cardiology community that the C-Pulse system is a new paradigm treatment for later-stage heart failure.

Under new Medicare regulations, hospitals are penalized for heart failure and heart attack patients who are re-admitted within 30 days of discharge. By the time C-Pulse potentially gets approved, hospitals will be under pressure to find new procedures to make sure their heart failure patients are getting the best therapy. C-Pulse could become a major part of the solution hospital need.

There is massive upside in Sunshine Heart if the C-Pulse pivotal trials are successful in showing clear advantage over current therapy for Class III and ambulatory Class IV heart failure patients. Even factoring in a highly dilutive stock offering in a year or so, the Sunshine Heart's shares are still absurdly cheap. Despite the lack of near-term catalysts, I'm comfortable buying the stock today and wait the time necessary for the stock to turn into a big winner.

Rosenblum is long Sunshine Heart.

Dan Rosenblum has been a full-time stock trader since 1999 after leaving a job at a publicly held medical-device company. Rosenblum joined SharkInvesting.com that year and has been the online trading community's resident biotech expert ever since. Rosenblum writes the SharkBiotech.com newsletter, which has outperformed the S&P 500 and the Nasdaq Biotechnology Index every year since its inception in 2006. Rosenblum lives with his wife and kids in Rockland County, New York.

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