Another way to look at it Sunshine Heart's market potential: A 10% share of the 650,000 newly diagnosed heart failure patients in the U.S., or 65,000 patients, would yield annual sales of more than $300 million. Throw in Europe and revenue could double. Or, consider this: The two companies that corner the market for left ventricular assist devices -- Thoratec ( THOR) and Heartware ( HTWR) -- have a combined market cap of over $3 billion. Investors value these companies highly despite the fact that the Class IV heart failure patient population is smaller than the patient population that would benefit from Sunshine Heart's C-Pulse device. Sunshine Heart reached agreement recently with the FDA to begin a pivotal trial of the C-Pulse system using a lighter, quieter and smaller version of the device used in the feasibility trial. This new trial will enroll 388 heart failure patients randomized to treatment with the C-Pulse system or standard therapy. The study's primary endpoint is the reduction of worsening heart failure events leading to hospitalization. Sunshine Heart expects to enroll the first patients soon and the study will take approximately two and half years to complete. The company has already received a European CE Mark (medical device approval) for C-Pulse. However, in order for the device to receive reimbursement, the company need to run a clinical trial in Europe as well. What makes the Sunshine Heart story so compelling is its paltry $58 million market cap. At a similar point in its development cycle, Heartware sported a market cap of over $200 million. Sunshine Heart's market cap is tiny because investors lack patience. The company won't have significant, stock-moving news to report until the U.S. pivotal trial is complete several years from now. Without a near-term catalyst, it's hard to make a compelling case to buy the stock now. The company also needs to cash at some point down the road. Although Medicare will reimburse patients enrolled in the clinical trial, Sunshine Heart will need $20-30 million to fund both the U.S. and European studies on top of the $20 million currently in the company's coffers.
Sunshine Heart (SSH) plunges after the company, known for its C-Pulse Heart Assist System to treat moderate to severe heart failure, reported a fourth-quarter loss per share that was wider than analysts' expectations and also provided a discouraging update on a pivotal trial. The company noted a loss of 42 cents a share, wider than the consensus estimate of 40 cents a share. Sunshine Heart reported no revenue, as expected. Sunshine Heart also provided an update on its pivotal C-Pulse® COUNTER HF U.S. investigational study and noted the activation of eight sites with a total of 24 additional sites committed to participate, which increases the total number to 32. The company reported in January 2014 that one additional patient had enrolled in the trial for a total of three patients through year-end. Unfortunately, the pace of enrollment in the trials has been extremely slow. The trial, which would have an estimated enrollment of 388, began in Nov. 2012 and has an estimated data collection date of April 2016 and an estimated study completion date of April 2017.