News & Events

In early 2010, the Company established new goals that we believed to be critical for future success. Over the course of the year, we achieved many of these goals and are confident we are positioned for success in 2011 and beyond. I would like to provide an overview of accomplishments in 2010 and also outline some of our expectations for 2011.

Immediately after starting my tenure as CEO, we began the process of replacing non-performing institutions with those that had expressed recent interest in the C-Pulse technology. In addition, we requested permission from the FDA to add another center to the feasibility trial. In the third quarter, we added St. Vincent’s in Sydney, Australia; Royal Victoria in Montreal, Canada; St. Luke’s in Kansas City, Missouri and United Hospital in St. Paul, Minnesota. To date, all four centers have completed implants with St. Luke’s and United Hospital accounting for one-third of all our implants.

By the end of 2010, we had completed seventeen implants. We also completed the first of four minimally invasive procedures performed with C-Pulse. As previously discussed, this is critical for both physician and commercial future acceptance. Only two of the surgeons participating in our trial routinely perform minimally invasive cases. In the future, we will target surgeons that have experience in performing these procedures.

We implemented development programs with our Driver, Cuff and Patient Interface Lead (PIL) to be completed prior to the initiation of our pivotal clinical trial. I am happy to report that our next generation, single-unit driver is on schedule for delivery. The modifications to the Cuff and PIL are also expected in this time frame. These changes are designed to enhance system reliability, patient comfort and convenience. In addition, the Company established a physician advisory board to help construct the Company’s pivotal trial. These physicians represent thought leaders in heart failure cardiology, cardiac surgery and electrophysiology. We have already met with our key advisors to begin the development process.

Another important Company milestone was demonstrating feasibility with pacemaker technology. We were able to directly connect to a pacemaker which in the future could allow for a new combined therapy offering electrical and hemodynamic support. Other achievements included securing long term commitments from our suppliers for key components, moving our U.S. headquarters to Minnesota, upgrading our management team and introducing a new website. The latter two will be discussed in greater detail in the following sections.

 Last and certainly not the least, we completed our financing and were successful in raising $13.2 AU. This was a major accomplishment given the financial climate and also included new U.S. investors, an encouraging sign for the future. I want to again thank all of you that have been loyal to the Company over the years and remain committed to Sunshine Heart. My enthusiasm and optimism have grown over the past year and I remain committed to the success of Sunshine Heart. Best wishes for a healthy and prosperous 2011.Dave

CEO

 Technology Update

In 2010, Sunshine Heart received physician and patient feedback regarding potential product improvements. One message that was consistent was to downsize the existing two unit system to a lighter, smaller, more reliable single unit system.

 In July, we launched this program with the help of two Australian based design and engineering firms. The goal was to launch this prior to the commencement of the U.S. pivotal trial. We are pleased to report that we are on schedule to accomplish this.

This unit is expected to weigh less than the existing driver and incorporates new battery technology and other proprietary changes that enable us to reduce the size and weight.

 Stay tuned for more information regarding this exciting program in 2011

.C-Pulse Technology Evolution

In 2009, the Company performed all of their implants through a full sternotomy with our current two unit system. In 2010, we demonstrated that the device could be placed through a small, sternum sparing incision. In 2011, we expect to launch our single unit system.  This will allow us to begin our pivotal trial with a single unit system and an implant that will be placed through a pace-maker like incision. In early 2012, the company is expected to complete its initial animal feasibility for a completely implantable system. Look for additional updates on our progress on these initiatives.

C-Pulse Clinical Trial News

Through the end of 2010, seventeen implants have been completed. Over 40% of these cases have been completed by new centers that were added in the third quarter of 2010. We would expect this number to approach 50% as we finish enrollment. This speaks to the criticality of appropriate site selection. It is truly amazing to think that four new centers with less than six months time participating in our trial could complete approximately half of the cases in our study. We continued to communicate with our centers regarding potential patients over the holidays. Completing this trial is our main priority.

After completion of the trial, we will need to collect data up to six months post operatively. After this, we will submit the data to the FDA in order to gain permission to begin our larger pivotal trial.  The data from our pivotal trial will be used to submit for FDA approval. While we do not expect to begin the pivotal trial until the fourth quarter of 2011, we have initiated the process to begin development of the pivotal trial protocol. This should provide us with plenty of time to ensure approval by the fourth quarter. Finally, we also expect to use the data from the feasibility trial to apply for CE mark, thus allowing the Company to commercialize the technology in select geographies outside the United States.

Congratulations to United Hospital and Royal Victoria

In October, under the leadership of Drs. Alan Bank and John Grehan, United Hospital, St. Paul, Minnesota, completed their first two implants of the C-Pulse System. This was also a first for the Company as United Hospital is the only center that currently does not have an active transplant or Ventricular Assist Device (VAD) program. This confirms what we have stated publicly for quite a while — that the C-Pulse technology can be expanded to centers that currently do not offer these programs. This will clearly enable centers that do not have the infrastructure or desire to support VAD or transplant programs to offer a later stage hemodynamic therapy for heart failure patients. In an article published in the St. Paul Pioneer Press, December 19, 2010, Dr. Bank stated, “this (technology) is for patients who aren’t quite in need of a ventricular assist device or perhaps don’t want one. The implant surgery for LVAD’s is much more complicated because patients depend on a heart bypass machine during the operation. Plus, because the pumps come in contact with the blood itself, patients must take blood thinners that bring certain risks.”

 In addition, Royal Victoria Hospital also completed their first implant in December. Dr. Renzo Cecere, a longtime advocate of the C-Pulse System, performed the implant. Dr. Cecere commented, “C-pulse offers renewed enthusiasm for the management of patients with previously limited treatment options. With its highly favorable risk/benefit profile, we are extremely delighted with our early clinical results.”

We would like to welcome both sites and look forward to additional implants.

New Company Hires