13 May 2011
Sydney - Friday - May 13: SUNSHINE HEART (ASX:SHC) may have appreciated all the attention because the company provided one of the more complete responses to an ASX query we have seen recently, this time over a price rise from 4.9c on Tuesday to as high as 6.3c yesterday. The company offered several factors, the main one being that this week the company had been conducting an education roadshow with the CEO and a cardiac specialist from the US for institutional investors and members of the medical profession. Sunshine then listed the past month's announcements as other possible factors behind the price rise. Sure enough, on April 4 when it announced the C-Pulse Heart Assist System had been implanted in 20 patients globally the shares rose 0.3c to 4.2c. On April 11, when it announced that the US FDA had approved the company's investigational device exemption supplement for the C-Pulse, it rose 0.3c to 4.4c. On April 14, when Sunshine provided a detailed market update and guidance that it was on track to meet published milestones, it rose 0.4c to 5c. The excitement proved too much, though, and the shares closed off the top at 6c yesterday.
Clinica MedTech Intelligence
Could stroke questions over LVADs benefit newcomer Sunshine Heart?
06 May 2011
By Elizabeth Cairns
The C-Pulse heart assist system developed by US-Australian firm Sunshine Heart is moving closer to market, and the company is on course to CE mark the system this year. The introduction of this device – which promises to reduce the incidence of blood clots or stroke – may provide a safer alternative to heart failure patients.
Last month, the US FDA has granted approval for the enrolment of a further 20 patients in its US Phase II clinical trial. The study will also be expanded to two further sites.
Dave Rosa, Sunshine Heart's CEO, told Clinica that the Minneapolis, Minnesota-based firm is on course to complete Phase II feasibility study later this year. In addition to being submitted to the US FDA, the data will also be used to secure CE marking for the C-Pulse device, he said.
The product is designed to address the same indication – heart failure – as ventricular assist devices such as Thoratec's HeartMate II and HeartWare's HVAD. However, Mr Rosa said that when the C-Pulse reaches market, it would not compete directly with these products. This is because it works in a different way; instead of the blood flow being routed through a pump which supplements the heart's own pumping ability, the C-Pulse does not come into contact with the blood at all.
The device consists of a balloon "cuff" which is linked via leads to a non-implanted driver, worn on a belt. The cuff itself is implanted and placed around the ascending aorta above the aortic valve, and inflates and deflates at in such as way as to reinforce blood flow through the artery. This pulsation is synchronised with the patient's heartbeat – an ECG sensing lead runs from the heart muscle to the driver, which ensures the pulses are timed correctly.
Mr Rosa explained that the balloon changes the blood pressure within heart, improving perfusion to the coronary arteries, increasing blood flow, and reducing the workload of the left ventricle.
Sunshine Heart's technology is designed to treat New York Heart Association (NYHA) class III or ambulatory class IV heart failure. The HVAD and the HeartMate II are both intended to treat patients with end-stage heart failure, a more challenging population, but both have recently been associated with unexpectedly high rates of stroke (www.clinica.co.uk, 18 April 2011; www.clinica.co.uk, 19 April 2011).
C-Pulse should be well placed to capitalise on this: because it is separate from the bloodstream, it should be less liable to cause blood clots or stroke. the firm also suggests that the need for patients to take anti-clotting drugs such as heparin or warfarin is also reduced.
The results from the Phase II trail of C-Pulse are set to be presented in September, and will be submitted to the US FDA early in the fourth quarter of this year. The company will then initiate a randomised 270-patient pivotal US trial, Mr Rosa said, starting at the beginning of 2012. Ultimately, the firm hopes to obtain US premarket approval (PMA) for C-Pulse.
20 April 2011
Sunshine Heart (SHC) 5.2c
PLENTY of news will flow through Sunshine's corporate arteries in the next few months as the company furthers clinical trials of its C-Pulse assistance device for dodgy tickers and seeks a Nasdaq listing.
Oh, and don't put away your wallet: Sunshine will need to raise about $30m-$35m if it proceeds to a full pivotal trial of 270 patients across 30 sites. C-Pulse, an aortic cuff device, is pitched at so-called stage-3 heart sufferers, who struggle to take even a few small steps but are not bed ridden and could become candidates for a ventricular assist device (VAD) or artificial heart. C-Pulses require only a small (8cm) incision and do not have contact with blood, thus minimising the risk of infection. In a feasibility trial, Sunshine last month implanted devices in 20 patients. Sunshine chief Dave Rosa reports all were discharged within four days and so far none have been re-hospitalised. Sunshine plans to reveal the feasibility results at a Heart Failure Society confab in Boston in September -- which strongly suggests they won't be negative.
Given Sunshine's target patient population is around 1.3 million globally, and given the devices sell for $US55,000 ($52,555), it's not hard to see the potential. "The beauty of these devices is you don't need to sell a heck of a lot before you get to break even," Rosa says. As with most medical devices, it takes time to persuade medical specialists -- in this case VAD-centric cardiologists -- to change their minds. With a $50m market cap, Sunshine Heart is a speculative buy. The stock is heavily backed by biotech groupie GBS Ventures, which owns 23 per cent. Management has also pledged its heart-felt support with a further 27 per cent stake.
TRADING FLOOR FRIDAY
FRIDAY 13 MAY 2011
Sunshine Heart (SHC.AU), Australia"s 16th largest health care equipment & services company by market capitalisation, hit a 52-week high of 6.30c during the day. In the last three months the stock has hit a new 52-week high five times, pointing to an uptrend. The stock rose for a third day on Friday bringing its three-day rise to 1.40c or 28.6%. The stock price climbed 0.30c (or 5.0%) to close at 6.30c.
Support: the support price is hovering at the 4.40c level. Volume traded at the weak support price zone was 0.7 time average during the single occasion when the support price was breached. In the last month the lowest price was 4.40c on Apr 14.
PRICE VOLUME DYNAMICS
Volatility: the stock traded between an intraday low of 6.0c and a high of 6.30c, suggesting a trading opportunity between peaks and troughs. The average daily volatility of 3.6% places the stock in the 2nd quartile in the market meaning it is moderately volatile.
Volume: there were 1,330,405 shares worth $82,476 traded. The volume was 3.04 times average trading of 437,698 shares. Volume weighted price (VWP): the price is at a premium of 15.7% to the 1-month volume weighted average price of 5.0c. Given that this premium has been under 15.7% seventy-eight times and over 15.7% nineteen times in the last year, the downside:upside probability is estimated at 78:19 or 4.1:1.
Beta: The Beta of this stock is 1.55. A Beta greater than 1 suggests this is a high risk, high return stock with volatility greater than that of the market.
PRICE PERFORMANCE RANK IN INDEX AND SECTORS
The stock"s rise was in keeping with the trend set by Health Care Equipment & Services sector of 43 stocks traded today, which was up 5.8 points or 0.2% to 2,301.2 The stock"s rise went against the trend set by the Total Australian Market of 1288 stocks and 74 units traded today, which was down 0.6 points or 0.02% to 4,189.0
All Ordinaries index which was unchanged at 4,776.
Percentile Rank 1-day 1-month 6-months
SHC 92 99 96
Health Care 70 66 74
All Ordinaries 41 57 53
RELATIVE VALUATION INDICATORS [RVI] FUNDAMENTAL ANALYSIS
- The Price to Book of 13.6 higher than average of 6.0 for the Health Care Equipment & Services sector and 2.9 for the Total Australian Market.
RELATIVE VALUATION INDICATORS [RVI] TECHNICAL ANALYSIS
- The price soared 28.6% in the last week and 50.0% in the last month.
- This has been propped up by robust volume of 2.7 times average for the week and by firm volume 1.8 times average for the month.
- In the Australian market of 1,288 stocks and 74 units traded today, the stock has a 6-month relative strength of 96 which means it is beating 96% of the market.
- A price rise combined with a high relative strength is a bullish signal.
- The price to 50-day EMAP ratio is 1.4, a bullish indicator. In the past 50 days this ratio has exceeded 1.4 just twice suggesting a resistance level. The 50-day EMAP has increased to 4.61c. An increase is another bullish indicator.
- The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) minus the 26-day EMA is positive suggesting a bullish signal. Both the 12-day EMA as well as the 26-day EMA are rising, another bullish signal.
- In the last three months the stock has hit a new 52-week high five times, pointing to an uptrend.
- The price to 200-day MAP ratio is 1.77, a bullish indicator. The stock is trading above both its MAPs and the 50-day MAP of 4.39c is higher than the 200-day MAP of 3.56c, another bullish indicator.
- In the last three months the stock has hit a new 52-week high five times, pointing to an uptrend.
- The price has risen above the upper Bollinger band of 6.24c.
Trailing one week: the stock rose four times (80% of the time) and was unchanged once (20% of the time). The volume was 2.7 times average trading of 2,188,490 shares. The value of $1,000 invested a week ago is $1,235 [vs $995 for the All Ordinaries index], for a capital gain of $235(or rise of 23.5%).
Trailing one month: the stock rose nine times (47% of the time), fell six times (32% of the time) and was unchanged four times (21% of the time). The volume was 1.8 times average trading of 9,629,356 shares. The value of $1,000 invested a month ago is $1,500 [vs $959 for the All Ordinaries index], for a capital gain of $500(or rise of 50.0%).
Trailing one year: the value of $1,000 invested one year ago is $1,909 [vs $1,060 for the All Ordinaries index], for a capital gain of $909. The total return to shareholders for 1 year is 90.9%.
Trailing five years: the value of $1,000 invested five years ago is $413, for a capital loss of $587.
PV$1000 1-week 1-month 1-year
SHC $1,235 $1,500 $1,909
Health Care $998 $973 $525
All Ordinaries $995 $959 $1,060
Annual Report for the year ended June 30, 2010 (year-on-year comparisons with previous corresponding period)-
Favourable Changes: total liabilities to total assets down 41.33% to 0.1; current ratio up 79.95% to 9.5; Net tangible assets per share up 40.95% to $A0.0098 (US0.8c); Working capital to total assets up 16.49% to 87.2%.
Unfavourable Changes: loss of $A6.5m ($US5.6m); EPS reduced 42.59% to -1.4 Australian cents (US-1.19c); EBIT Margin of -1,554.8%; losses in all of the last 4 years; EBITDA loss of $A7.3m ($US6.2m); operating cash flow is negative; total number of shares outstanding up 65.3% to 482,227,231; Retained earnings to total assets down 46.99% to 1,036.3%; Sales to total assets down 48.22% to 0.1.
Major Common Size Ratios: total current assets to total assets up from 92.31% to 97.46%; cash to total assets down from 81.96% to 74.87%; current debtors to total assets down from 6.56% to 4.74%; fixed assets to total assets down from 7.69% to 2.54%; total non-current assets to total assets down from 7.69% to 2.54%; depreciation to sales down from 16.43% to 12.79%.
Size SHC Rank in Health Care
MCAP ($) 64.1 million 16
Assets ($) 5.3 million 42
Based on 1,017,796,374 issued equity shares the market capitalisation is $64.1 million. It is Australia"s 47th largest Health Care Equipment & Services company by total revenue.
Sunshine Heart focuses on an innovative cardiac assist therapy to treat heart patients who represent a large and under-served market segment and provide a significant opportunity for the company.