News & Events

EDEN PRAIRIE, Minn., May 14, 2013 (GLOBE NEWSWIRE) -- 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."