Sunshine Heart, Inc. (Nasdaq:SSH) today announced corporate updates
and financial results for the first quarter ended March 31, 2013.
First Quarter Corporate Highlights:
- First site activated in U.S. C-Pulse® System pivotal trial,
COUNTER HF
- Reimbursement approval granted by CMS for first U.S. pivotal
trial site
- First site activated in European multi-center C-Pulse® System
post-market trial, OPTIONS HF
- Two additional Board members added
- $25M equity line of credit established with Aspire Capital
Fund, LLC
First Quarter Financial Highlights:
- SG&A expense totaled $2.0M in 1Q13 vs. $1.9M in 1Q12
- R&D expense totaled $2.4M in 1Q13 vs. $2.2M in 1Q12
- Loss per share $(0.47) in 1Q13 vs. $(0.66) in 1Q12
- Cash used in operations was $4.1M in 1Q13 vs. $4.8M in
1Q12
In the first quarter, Mid America Heart Institute-Saint Luke's
Hospital was the first site to be activated in the U.S. COUNTER HF
trial. Sunshine Heart has been notified by the site that CMS has
already granted reimbursement eligibility for use of the C-Pulse
System. Mid America Heart was the leading implanter for the
Company's C-Pulse feasibility study. Three additional centers from
the Company's feasibility study are currently in the activation
process. Additionally, Sunshine Heart received word on May 9, 2013
that its second site, Minneapolis VA Medical Center, has been
activated. The Company anticipates a range of enrollments,
including control and C-Pulse implanted patients, to total 32 to 44
by year-end 2013.
Sunshine Heart has appointed Dr. Margarita Camacho, Surgical
Director Cardiac Transplantation and Mechanical Device Program,
Barnabas Health Heart Center at Newark Beth Israel Medical Center,
as the National Surgical Principal Investigator (PI) for its
COUNTER HF trial. Dr. Camacho was previously a member of the data
and safety monitoring board that oversaw the feasibility trial. She
joins Dr. William Abraham of the Ohio State University Medical
Center, who was previously named as the National Cardiology
Principal Investigator for the COUNTER HF trial.
"I am pleased to announce meaningful corporate and clinical
progress made in our first quarter of 2013, particularly the
initiation of our anticipated pivotal trial, COUNTER HF," said Dave
Rosa, Chief Executive Officer of Sunshine Heart. "We are excited
and honored to announce Dr. Camacho as our surgical PI for the
trial and look forward to her expertise and contributions, as well
as those of our new Board members. We are actively adding personnel
to support the advancement of our clinical trial. We look forward
to updating the market on material pivotal trial enrollment
progress, our post-market European study, as well as additional
exciting outcomes on existing feasibility patients."
In February, 2013, Sunshine Heart completed the activation of
the first site in its European multi-center post-market study,
OPTIONS HF. The site, German Heart Institute - Berlin (DHZB), is
recognized as a worldwide leading institution for the treatment of
late stage heart failure. On May 7, 2013, the first patient was
successfully implanted at DHZB and the center is actively
recruiting additional patients. The first implant was completed
using Sunshine Heart's next generation cuff, which is pre-sutured
and pre-marked, decreasing overall procedure time and increasing
predictability for cuff securement. Sunshine Heart continues to
move forward with site activation, at seven additional sites in
Germany, Italy and the United Kingdom. Final activation for these
sites is expected to be completed by September 1, 2013.
Sunshine Heart received communication from its German
reimbursement consultant in the first quarter that reimbursement
has been denied based on lack of C-Pulse patient data in Germany.
However, DHZB will have the opportunity to negotiate reimbursement
directly with the German insurance providers. Sunshine Heart
intends to re-submit for future German reimbursement in October
along with additional accumulated patient data.
Also in the first quarter, the Company announced the addition of
Warren Watson and Jon Salveson to its Board of Directors. Mr.
Watson joins Sunshine Heart following a notable 33-year tenure
across senior managerial roles at Medtronic (NYSE:MDT). Mr.
Salveson brings extensive corporate transaction and financing
experience to the Company and is the current Vice Chairman of
Investment Banking and Chairman of Healthcare Investment Banking at
Piper Jaffray Companies (NYSE:PJC).
Financials:
Operating expenses in the first quarter totaled $4.4 million,
compared to $4.1 million in the fourth quarter of 2012. The
increase over the prior year period was attributable to increased
spending in preparation for the U.S. pivotal trial and EU
post-market study, as well as increased non-cash compensation
expenses.
Net loss in the first quarter was $4.4 million, or $0.47 per
share, compared to a loss of $4.1 million of $0.66 per share in
2012, respectively.
Cash used in operating activities decreased to $4.1 million in
the first quarter 2013 from $4.8 million in the comparable period
of the prior year, driven primarily by the higher concentration of
non-cash expenses in the current year and the reduction of
liabilities in the prior year period. The Company ended the first
quarter with $11.0 million in cash, compared to $14.2 million at
December 31, 2012. The pro-forma cash balance at March 31, 2013,
when adjusted to reflect the April 2013 equity financing discussed
below, was $25 million.
In addition to financial results for the first quarter ended
2013, Sunshine Heart also announced several corporate updates with
regard to financing, ongoing clinical trials for C-Pulse, and
progress made with regard to internal product development.
Additional Corporate Milestones:
- Second site activated in U.S. pivotal trial, COUNTER HF
- Complete Feasibility study data expected to be published in
major medical journal
- Two additional patients have been identified as potential
candidates to be weaned from the device based on significant
symptomatic improvement
- Closed $15.1M public offering on April 16, 2013
- Progress made in development of fully-implantable pump
- Company evaluating additional therapeutic indications for
C-Pulse system
- Sunshine Heart officially de-listed from Australian Stock
Exchange (ASX)
On April 16, 2013, the Company announced completion of a $15.1
million public offering intended for use toward the completion of
its European post-market study, which is expected in late 2014. The
Company also has the ability to access another $24 million as a
line of credit established in January, 2013 with Aspire
Capital.
Following the positive 12-month follow up data for the C-Pulse
feasibility study announced at the 2012 Transcatheter
Cardiovascular Therapeutics (TCT) conference, the Company expects
to submit the trial manuscript titled, "Ambulatory Extra-Aortic
Counterpulsation in Patients with Moderate to Advanced Chronic
Heart Failure," to a major medical journal for publication.
Sunshine Heart is currently in discussions with physicians
regarding the potential weaning of additional patients from the
C-Pulse system, based upon significant improvements since the time
of implant. To-date, two patients implanted in the Company's
Feasibility study have been permanently weaned from the device. The
Company expects to report on the status of these additional
patients in the coming months, as appropriate.
On the research and development front, the Company has executed
an agreement with Cirtec Medical Systems, a leader in advanced
engineering and manufacturing capabilities specializing in
minimally invasive surgical and delivery devices, on a development
pathway for its fully implantable C-Pulse pump. The Company is
targeting the completion of a chronic animal trial in late 4Q13 for
the pump and intends to provide more information as progress is
made.
The Company is also pleased to report that it is aware of early
stage work being done by a U.S. center evaluating the use of
C-Pulse as a technology for Fontan Mechanical Assistance for
patients born with single ventricles. In addition, Sunshine Heart
has been approached by a separate center that is interested in
conducting pre-clinical studies to evaluate C-Pulse as a non-blood
contacting right ventricular assist device. Information regarding
progress of these potential therapeutic indications for C-Pulse
will be provided as data becomes available.
On May 6, 2013, Sunshine Heart completed its requested delisting
from the Australian stock exchange. The Company is now traded
solely on the NASDAQ Capital Market under symbol "SSH."
SUNSHINE HEART,
INC. Condensed Consolidated Statements of
Operations and Comprehensive Loss
(Unaudited) (In thousands, except per share
amounts) |
|
|
Three months ended
March 31, |
|
2013 |
2012 |
Net sales |
$-- |
$-- |
|
|
|
Operating expenses |
|
|
Selling, general and administrative |
1,976 |
1,940 |
Research and development |
2,426 |
2,166 |
Total operating expenses |
4,402 |
4,106 |
Loss from operations |
(4,402) |
(4,106) |
Interest income |
3 |
25 |
Loss before income taxes |
(4,399) |
(4,081) |
Income tax benefit |
-- |
-- |
Net loss |
$(4,399) |
$ (4,081) |
|
|
|
Basic and diluted loss per
share |
$ (0.47) |
$ (0.66) |
|
|
|
Weighted average shares outstanding – basic
and diluted |
9,417 |
6,169 |
|
|
|
Comprehensive loss |
$ (4,407) |
$ (4,027) |
|
Condensed Consolidated
Balance Sheets (Dollars in thousands, except share
amounts) |
|
|
March 31,
2013 |
December 31,
2012 |
|
(unaudited) |
|
|
|
|
Current assets |
|
|
Cash and cash equivalents |
$10,970 |
$14,224 |
Other current assets |
504 |
333 |
Total current assets |
11,474 |
14,557 |
Property, plant and equipment,
net |
448 |
479 |
TOTAL ASSETS |
$11,922 |
$15,036 |
|
|
|
Current liabilities |
|
|
Accounts payable |
$1,584 |
$1,156 |
Accrued salaries, wages, and other
compensation |
435 |
931 |
Total current
liabilities |
2,019 |
2,087 |
Total liabilities |
2,019 |
2,087 |
|
|
|
Commitments and contingencies |
-- |
-- |
|
|
|
Stockholders' equity |
|
|
Preferred Stock as of March 31, 2013 and
December 31, 2012, par value $0.0001; per share; authorized
40,000,000 shares |
-- |
-- |
Common stock as of March 31, 2013 and
December 31, 2012, par value $0.0001 per share; authorized
100,000,000 shares: issued and outstanding 9,509,867 and
9,282,724 shares, respectively |
1 |
1 |
Additional paid‑in capital |
92,378 |
91,017 |
Accumulated other comprehensive loss: |
|
|
Foreign currency translation
adjustment |
1,177 |
1,185 |
Accumulated deficit |
(83,653) |
(79,254) |
Total stockholders'
equity |
9,903 |
12,949 |
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY |
$11,922 |
$15,036 |
|
Condensed Consolidated
Statements of Cash Flows (Unaudited) (in
thousands) |
|
|
For the three months
ended March 31, |
|
2013 |
2012 |
Net loss |
$ (4,399) |
$ (4,081) |
Adjustments to reconcile net loss to cash
flows used in operating activities: |
|
|
Depreciation and amortization |
40 |
31 |
Loss on disposal of plant and
equipment |
-- |
63 |
Stock-based compensation expense |
367 |
318 |
Amortization of warrants for service
agreements |
120 |
-- |
Changes in assets and liabilities |
|
|
Other current assets |
(171) |
(299) |
Accounts payable and accrued
expenses |
(71) |
(800) |
Net cash used in
operations |
(4,114) |
(4,768) |
Cash flows used in investing activities: |
|
|
Purchases of property and equipment |
(9) |
(89) |
Net cash used in investing
activities |
(9) |
(89) |
Cash flows provided by financing
activities: |
|
|
Net proceeds from the sale of common
stock |
874 |
2,061 |
Net cash provided by financing
activities |
874 |
2,061 |
Effect of exchange rate changes in cash |
(5) |
65 |
Net decrease in cash and cash
equivalents |
(3,254) |
(2,731) |
Cash and cash equivalents - beginning
of period |
14,224 |
6,563 |
CASH AND CASH EQUIVALENTS - END OF
PERIOD |
$10,970 |
$3,832 |
About the C-Pulse® Heart Assist System
The C-Pulse Heart Assist System, or C-Pulse System, an
investigational device in the United States, Canada and countries
that do not recognize the CE mark approval, utilizes the scientific
principles of intra-aortic balloon counter-pulsation applied in an
extra-aortic approach to assist the left ventricle by reducing the
workload required to pump blood throughout the body, while
increasing blood flow to the coronary arteries. Combined,
these potential benefits may help sustain the patient's current
condition or, in some cases, reverse the heart failure process,
thereby potentially preventing the need for later-stage heart
failure devices, such as left ventricular assist devices (LVADs),
artificial hearts or transplants. It may also provide relief from
the symptoms of Class III and ambulatory Class IV heart failure and
improve quality of life and cardiac function. Based on the results
from our feasibility trial, we also believe that some patients
treated with our C-Pulse System will be able to stop using the
device due to sustained improvement in their conditions as a result
of the therapy.
Caution: Investigational device, limited by Federal (or United
States) Law to Investigational use. About Sunshine®
Heart
Sunshine Heart, Inc. (Nasdaq:SSH) is an early-stage medical
device company focused on developing, manufacturing and
commercializing the C-Pulse System for treatment of Class III and
ambulatory Class IV heart failure. Sunshine Heart has
completed an approved U.S. Food and Drug Administration (FDA)
feasibility clinical trial of the C-Pulse System and presented the
results in November 2011. In March 2012, the FDA
notified the Company that it could move forward with an
investigational device exemption (IDE) application. Sunshine
Heart received unconditional approval from the FDA in
November 2012 to initiate its pivotal trial. In
July 2012 Sunshine Heart received CE Mark approval for its
C-Pulse System in Europe. Sunshine Heart is a Delaware
corporation headquartered in Minneapolis with a wholly owned
subsidiary in Australia. The Company has been listed on the
NASDAQ Capital Market since February 2012.
Forward-Looking Statements
Certain statements in this release are forward-looking
statements that are based on management's beliefs, assumptions and
expectations and information currently available to
management. All statements that address future operating
performance, events or developments that we expect or anticipate
will occur in the future are forward-looking statements, including,
without limitation, our expectations with respect to the net
proceeds from the offering, future clinical trial activities and
results including patient enrollment in trials. These
forward-looking statements are subject to numerous risks and
uncertainties, including, without limitation, that the net proceeds
may be lower than we currently expect due to increased offering
expenses or otherwise, the possibility that our clinical trials do
not meet their enrollment goals, meet their end-points or otherwise
fail, that regulatory authorities do not accept our application or
approve the marketing of the C-Pulse System, the possibility that
we may be unable to raise the funds necessary for the development
and commercialization of our products, that we may not be able to
commercialize our products successfully in the EU and the other
risk factors described under the caption "Risk Factors" and
elsewhere in our filings with the SEC. You should not place
undue reliance on forward-looking statements because they speak
only as of the date when made and may turn out to be inaccurate. We
do not assume any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. We may not actually achieve the plans,
projections or expectations disclosed in forward-looking
statements, and actual results, developments or events could differ
materially from those disclosed in the forward-looking
statements.
CONTACT: Media:
Laura Forman
Blueprint Life Science Group
T: +1-415-375-3340
Investor:
Jeff Mathiesen
Chief Financial Officer
Sunshine Heart, Inc.
T: +1-952-345-4200
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