Sunshine Heart Announces Second Quarter 2013 Financial Results and Corporate Update

Sunshine Heart Announces Second Quarter 2013 Financial Results and Corporate

EDEN PRAIRIE, Minn., Aug. 7, 2013 (GLOBE NEWSWIRE) -- Sunshine Heart, Inc.
(Nasdaq:SSH) today announced financial results and provided a corporate update
for the second quarter ended June 30, 2013.

Second Quarter Corporate Highlights:

  *Three new sites activated (five total) in C-Pulse® COUNTER HF^™ U.S.
    pivotal trial with a total of seventeen sites committed to participate. On
    schedule to meet guidance of twenty two by year end.
  *Two sites activated (three total) in C-Pulse OPTIONS HF EU post-market
    study. On schedule to meet guidance of eight by year end.
  *Four implants completed in OPTIONS HF EU post market study with zero
    neurologic events, zero bleeding events, zero clotting events, zero deaths
    and zero re-hospitalizations due to worsening heart failure (also US
    COUNTER HF trial primary endpoint).
  *Multiple C-Pulse product enhancements approved with several additional
    enhancements underway. Fully implantable system on schedule per previous
    guidance of Q4 chronic animal study.
  *Two additional patents issued for C-Pulse for a total of 67 (14 in the
    U.S.) with 27 additional (8 in the U.S.) patents pending.

Second Quarter Financial Highlights:

  *SG&A expense totaled $2.2 million in the second quarter and $4.1 million
    year-to-date 2013 vs. $1.6 million and $3.5 million, respectively in 2012
  *R&D expense totaled $3.2 million in the second quarter and $5.6 million
    year-to-date 2013 vs. $1.8 million and $4.0 million, respectively in 2012
  *Australia R&D tax credit refund of $1.1 million in the second quarter 2013
    vs. a refund of $0.7 million in the second quarter 2012
  *Loss per share of $(0.35) and $(0.81) in the second quarter and year-to
    date 2013, respectively, vs. loss per share of $(0.42) and $(1.08) in
    comparable periods of 2012
  *Cash used in operations was $7.6 million year-to-date 2013 vs. $6.8
    million in 2012
  *Cash on hand at June 30, 2013 was $21.5 million


Operating expenses in the second quarter 2013 totaled $5.3 million, compared
to $3.4 million in the second quarter of 2012. Operating expenses in the first
half of 2013 totaled $9.7 million, compared to $7.5 million in the first six
months of 2012. The increase over the prior year periods was attributable to
increased clinical research and infrastructure expenses related to the U.S.
pivotal trial and EU post-market study, as well as increased non-cash
compensation expenses.

Income tax benefits from the receipt of R&D tax credit refunds in Australia
totaled $1.1 million in the second quarter and six months ended June 30, 2013,
compared to $0.7 million in the comparable periods of the prior year.

Net loss in the second quarter and six months ended June 30, 2013 was $4.2
million, or $0.35 per share, and $8.6 million, or $0.81 per share,
respectively compared to losses of $2.6 million of $0.42 per share, and 6.7
million, or $1.08 per share in the comparable periods in 2012.

Cash used in operating activities totaled $7.6 million in the first half of
2013 compared to $6.8 million in the comparable period of the prior year, with
the increase driven primarily by the higher clinical and research expenses. In
April 2013, the Company completed a public offering, generating net proceeds
of $14.0 million. The Company ended the second quarter with $21.5 million in
cash, compared to $14.2 million at December 31, 2012.

In addition to financial results for the second quarter and first six months
of 2013, Sunshine Heart also announced several corporate updates with regard
to financing, ongoing clinical trials for C-Pulse, and progress of internal
product development.


Since the first quarter, Sunshine Heart has made significant site progress
within its C-Pulse® COUNTER HF U.S. pivotal trial. Within the quarter, three
new sites were activated with a total of seventeen committed to participate in
the trial. Since June 30, one additional site has been activated for a total
of five active sites in the trial, including the top three enrolling sites in
the 2011 U.S. feasibility study. The Company is currently waiting to hear from
an additional eight centers with regard to intention to participate in the

Given multiple ongoing device trials and additional stem cell studies
examining Class III heart failure patients, U.S. sites are currently taking an
average of about six months from trial commitment to activation, longer than
the initially expected. The Company has instituted new initiatives to expedite
site presentations and subsequent activations, including the hire of a
consultant to supplement in-house patient recruitment and enrollment efforts.
In addition, Sunshine Heart plans to add three new enrollment-related
positions in the third quarter, including a Chief Medical Officer, a VP of
Clinical Research, and a Patient Recruitment Director. The Company expects the
addition of these positions to increase study focus, tighten enrollment
timelines, and increase trial vigilance, thus ensuring the appropriate
patients are being enrolled. Given these key clinical changes, Sunshine Heart
continues to expect to have 22 total sites by year-end 2013.

As previously announced in the Company's first quarter release, Dr. Margarita
Camacho from Newark Beth Israel Medical Center has been named National
Surgical Principal Investigator for the ongoing U.S. pivotal trial joining Dr.
William Abraham from The Ohio State University (National Principal
Investigator). In addition, Dr. Mark Zucker, Director of Heart Failure
Treatment and Transplants at Newark Beth Israel Medical Center, has also
joined the advisory board for the trial. On the reimbursement front, the first
three centers with qualifying LVAD programs have received regional CMS
reimbursement approval for the C-Pulse procedure under established LVAD codes.

The Company has previously reported that two patients from the initial twenty
patient feasibility trial had been successfully weaned from the therapy due to
improved results. In anticipation of future patients being targeted for
weaning, the Company is developing a formal patient weaning protocol. The
proposed protocol is being reviewed with clinical advisors. Two additional
patients have been identified as potential candidates for weaning from the
therapy. Sunshine Heart expects to release full weaning data to-date at the
2013 Transcatheter Cardiovascular Therapeutics (TCT) conference at the end of

With regard to infection control measures, the Company has established an
Infection Control Committee, which includes the following: an infectious
disease specialist, a cardiac imaging physician expert, a cardiac surgeon with
both C-Pulse and LVAD experience, and a former LVAD clinical coordinator
experienced in managing exit site infections. On the whole, the committee is
intended to provide guidance to mitigate and minimize potential adverse events
associated with exit site infections.

Site activation also continues to advance in the C-Pulse OPTIONS HF
post-market study in the EU with two sites activated in the quarter and an
additional site activated in July. The Company expects to have another five
sites activated by the end of the third quarter. To-date four patients have
been implanted with the C-Pulse device in the study, averaging one patient
implant per month per site. Importantly, no patients have been re-hospitalized
for worsening heart failure since implantation. On the safety side, the
Company reports no strokes, no bleeding, and no blood clots. The first three
month patient follow up is expected in August. The initial release of results
is targeted at the September 26^th German Heart Failure Society meeting.

Sunshine Heart also continues to progress with its internal R&D with the
Company receiving worldwide approval for an enhanced percutaneous interface
device lead, providing for increased external length, intended to minimize
exit site infections. An additional external length of approximately
five-inches is targeted for regulatory submission in the fourth quarter of
2013. The Company also announced FDA conditional approval and EU submission
for a new driver lead assembly intended to improve device reliability. Several
program software enhancements have also received FDA approval and have been
submitted in the EU, which will facilitate greater ease of use for
programmers. A driver design enhancement is currently underway with a targeted
fourth quarter approval. The Company has submitted a patent application for
its fully implantable C-Pulse® system, with a planned trial in acute and
chronic animals intended to commence in the third and fourth quarters,


The Company will host a conference call and webcast at 9:00 a.m. Eastern time
today to discuss its financial results and provide an update on its ongoing
clinical trials.

To access the live webcast, please visit the Investors page of the Sunshine
Heart website at Alternatively, you
may access the live conference call by dialing (877) 303-9826 (U.S.) or (224)
357-2194 (international) and using conference ID 27553402. An audio archive of
the webcast will be available following the call at

Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except per share amounts)

                                      Three months ended  Six months ended
                                       June 30,            Jun 30,
                                      2013      2012      2013      2012
Net sales                              $ --      $ --      $ --      $ --
Operating expenses                                                
Selling, general and administrative    2,150     1,569     4,126     3,509
Research and development               3,150     1,787     5,576     3,953
Total operating expenses               5,300     3,356     9,702     7,462
Loss from operations                   (5,300)   (3,356)   (9,702)   (7,462)
Interest income                        3         4         6         29
Loss before income taxes               (5,297)   (3,352)   (9,696)   (7,433)
Income tax benefit                     (1,077)   (730)     (1,077)   (730)
Net loss                               $(4,220) $(2,622) $(8,619) $ (6,703)
Basic and diluted loss per share       $(0.35)  $(0.42)  $(0.81)  $ (1.08)
Weighted average shares outstanding –  11,911    6,277     10,664    6,223
basic and diluted
Comprehensive loss                     $(4,137) $ (2,610) $ (8,544) $(6,640)

Condensed Consolidated Balance Sheets
(Dollars in thousands, except share amounts)

                                                     June 30,    December 31,
                                                      2013        2012
Current assets                                                   
Cash and cash equivalents                             $ 21,526    $ 14,224
Other current assets                                  704         333
Total current assets                                  22,230      14,557
Property, plant and equipment, net                    413         479
TOTAL ASSETS                                          $ 22,643    $ 15,036
Current liabilities                                              
Accounts payable                                      $ 1,324     $ 1,156
Accrued salaries, wages, and other compensation       926         931
Total current liabilities                             2,250       2,087
Total liabilities                                     2,250       2,087
Commitments and contingencies                         --          --
Stockholders' equity                                             
Preferred Stock as of June 30, 2013 and December 31,
2012, par value $0.0001; per share; authorized        --          --
Common stock as of June 30, 2013 and December 31,
2012, par value $0.0001 per share; authorized         1           1
100,000,000 shares: issuedand outstanding 12,384,867
and 9,282,724 shares, respectively
Additional paid‑in capital                            107,005     91,017
Accumulated other comprehensive income:                          
Foreign currency translation adjustment               1,260       1,185
Accumulated deficit                                   (87,873)    (79,254)
Total stockholders' equity                            20,393      12,949
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY            $ 22,643    $ 15,036

Condensed Consolidated Statements of Cash Flows
(in thousands)
                                                     For the six months ended
                                                      June 30,
                                                     2013         2012
Net loss                                              $ (8,619)    $ (6,703)
Adjustments to reconcile net loss to cash flows used              
in operating activities:
Depreciation and amortization                         83           63
Loss on disposal of plant and equipment               --           63
Stock-based compensation expense                      838          621
Amortization of warrants for service agreements       240          --
Changes in assets and liabilities                                 
Other current assets                                  (371)        (286)
Accounts payable and accrued expenses                 258          (573)
Net cash used in operations                           (7,571)      (6,815)
Cash flows used in investing activities:                          
Purchases of property and equipment                   (17)         (107)
Net cash used in investing activities                 (17)         (107)
Cash flows provided by financing activities:                      
Net proceeds from the sale of common stock            14,910       2,068
Net cash provided by financing activities             14,910       2,068
Effect of exchange rate changes in cash               (20)         63
Net decrease in cash and cash equivalents             7,302        (4,791)
Cash and cash equivalents - beginning of period       14,224       6,563
CASH AND CASH EQUIVALENTS - END OF PERIOD             $ 21,526     $ 1,772

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
counterpulsation 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 condition 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
November2011.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 November2012 to
initiate its pivotal trial.In July2012 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

Forward-Looking Statements

Certain statements in this release are forward-looking statements that are
based on management's beliefs, assumptions, 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, 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, the possibility that
our clinical trials do not meet their enrollment goals, meet their endpoints
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.

         Laura Forman
         Blueprint Life Science Group
         T: +1-415-375-3340
         Jeff Mathiesen
         Chief Financial Officer
         Sunshine Heart, Inc.
         T: +1-952-345-4200

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