Sunshine Heart Announces First Quarter 2016 Financial Results and Provides Company Update
May 03 2016 - 5:30AM
Sunshine Heart, Inc. (NASDAQ:SSH) announced today its financial
results and provided a company update for the first quarter ended
March 31, 2016. The Company will host a conference call and
webcast at 9:00 AM ET today to discuss its financial results and
provide an update on business strategy.
To access the live webcast, please visit the Investors page of
the Sunshine Heart website at http://ir.sunshineheart.com.
Alternatively, you may access the live conference call by dialing
(877) 303-9826 (U.S.) or (224) 357-2194 (international) and using
conference ID 99913745. An audio archive of the webcast and a
transcript of the call will be available following the call at
http://ir.sunshineheart.com.
Business Update:
- Company is making solid progress on pursuing a more optimal
clinical strategy to expedite the approval of C-Pulse therapy in
the U.S.
- Advancing the development of a fully implantable system by
conducting an acute first-in-man study in 2016 that measures
neuromodulation effects
- Expect to submit clinical protocol for a short-term study of
CP-1 to the FDA by the end of Q3; estimate protocol approval and
commencement of patient enrollment in the U.S. by early 2017
- Data from OPTIONS-HF study showing improvements in cardiac
remodeling, functional capacity, and quality of life, to be
presented at the European Society of Cardiology Heart Failure
conference May 21st, 2016 in Florence, Italy
- Meaningful progress on reducing operating cash-burn in Q1; down
35% from Q1 a year ago.
- Ended Q1 with $16.5 million in cash, $7.1 million in
borrowings; management continues to expect to raise capital in
2016
“After
my first two months as CEO, I continue to be excited by the
significant opportunity in front us at Sunshine Heart,” said John
Erb, Chairman and CEO. “The entire organization is focused on
pursuing a business and clinical strategy that will allow us to
realize the full potential of C-Pulse therapy in helping heart
failure patients. We have learned a great deal about the treatment
of heart failure patients and we are leveraging that knowledge. In
that regard, I am pleased with the clinical progress we are making.
We intend to submit our protocol for a short-term clinical study to
the FDA by the end of the third quarter. This will allow us to
collect additional clinical evidence to support the development of
our fully implantable system.”
FINANCIALS
SUNSHINE HEART, INC. AND
SUBSIDIARIES |
|
Condensed Consolidated Statements of Operations and
Comprehensive Loss |
|
(Unaudited) |
|
(In thousands, except per share amounts) |
|
|
|
|
|
Three months ended March
31, |
|
|
|
2016 |
|
2015 |
|
|
Net
sales |
$ |
— |
|
$ |
59 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
Selling, general and
administrative |
|
1,349 |
|
|
2,186 |
|
|
Research and development |
|
3,206 |
|
|
4,865 |
|
|
Total operating
expenses |
|
4,555 |
|
|
7,051 |
|
|
Loss from operations |
|
(4,555 |
) |
|
(6,992 |
) |
|
Interest expense |
|
(229 |
) |
|
(63 |
) |
|
Other income (expense), net |
|
1 |
|
|
(3 |
) |
|
Loss before income
taxes |
|
(4,783 |
) |
|
(7,058 |
) |
|
Income tax expense |
|
3 |
|
|
5 |
|
|
Net
loss |
$ |
(4,786 |
) |
$ |
(7,063 |
) |
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per share |
$ |
(0.26 |
) |
$ |
(0.40 |
) |
|
Weighted average shares
outstanding – basic and diluted |
|
18,353 |
|
|
17,509 |
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income: |
|
|
|
|
|
|
|
Foreign currency translation adjustments |
$ |
(4 |
) |
$ |
10 |
|
|
Total
comprehensive loss |
$ |
(4,790 |
) |
$ |
(7,053 |
) |
|
SUNSHINE HEART, INC. AND SUBSIDIARIES |
Condensed Consolidated Balance Sheets |
(Dollars in thousands, except share amounts) |
|
|
|
March 31, 2016 |
|
|
December 31, 2015 |
|
(unaudited) |
|
ASSETS |
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
16,470 |
|
$ |
23,113 |
|
Other current assets |
|
547 |
|
|
479 |
|
Total current
assets |
|
17,017 |
|
|
23,592 |
|
Property, plant and equipment,
net |
|
462 |
|
|
535 |
|
Other assets |
|
299 |
|
|
323 |
|
TOTAL
ASSETS |
$ |
17,778 |
|
$ |
24,450 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Current portion of long-term
debt |
$ |
3,867 |
|
$ |
3,798 |
|
Accounts payable and accrued
expenses |
|
2,410 |
|
|
2,832 |
|
Accrued salaries, wages, and other
compensation |
|
555 |
|
|
1,368 |
|
Total current
liabilities |
|
6,832 |
|
|
7,998 |
|
Long-term debt, net of
discount |
|
2,934 |
|
|
3,881 |
|
Other Liabilities |
|
400 |
|
|
400 |
|
Total
liabilities |
|
10,166 |
|
|
12,279 |
|
Commitments and
contingencies |
|
— |
|
|
— |
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
|
|
Series A junior participating
preferred stock as of March 31, 2016 and
December 31, 2015, $0.0001 par value per share;
authorized 30,000 shares, none outstanding |
|
— |
|
|
— |
|
Preferred stock as of
March 31, 2016 and December 31, 2015, $0.0001 par value
per share; authorized 39,970,000 shares, none outstanding |
|
— |
|
|
— |
|
Common stock as of March 31,
2016 and December 31, 2015, par value $0.0001 per share;
authorized 100,000,000 shares; issued and outstanding 18,368,849
and 18,344,478 shares, respectively |
|
2 |
|
|
2 |
|
Additional paid-in
capital |
|
164,336 |
|
|
164,105 |
|
Accumulated other
comprehensive income: |
|
|
|
|
|
|
Foreign currency
translation adjustment |
|
1,242 |
|
|
1,246 |
|
Accumulated
deficit |
|
(157,968 |
) |
|
(153,182 |
) |
Total
stockholders’ equity |
|
7,612 |
|
|
12,171 |
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
17,778 |
|
$ |
24,450 |
|
SUNSHINE HEART, INC. AND
SUBSIDIARIES |
Condensed Consolidated Statements of Cash
Flows |
(Unaudited) |
(in thousands) |
|
|
|
Three months endedMarch
31, |
|
|
|
2016 |
|
|
2015 |
|
|
Operating
activities: |
|
|
|
|
|
|
Net loss |
$ |
(4,786 |
) |
$ |
(7,063 |
) |
Adjustments to reconcile
net loss to cash flows used in operating activities: |
|
|
|
|
|
|
Depreciation |
|
81 |
|
|
80 |
|
Stock-based
compensation expense, net |
|
231 |
|
|
743 |
|
Amortization of
debt discount and financing fees |
|
84 |
|
|
14 |
|
Changes in operating
assets and liabilities: |
|
|
|
|
|
|
Other current
assets |
|
(67 |
) |
|
(561 |
) |
Other assets |
|
2 |
|
|
(135 |
) |
Accounts payable
and accrued expenses |
|
(1,241 |
) |
|
(162 |
) |
Net cash used in
operations |
|
(5,696 |
) |
|
(
7,084 |
) |
|
|
|
|
|
|
|
Investing
activities: |
|
|
|
|
|
|
Purchases of
property and equipment |
|
(8 |
) |
|
(72 |
) |
Net cash used in
investing activities |
|
(8 |
) |
|
(72 |
) |
|
|
|
|
|
|
|
Financing
activities: |
|
|
|
|
|
|
Net proceeds from
the sale of common stock |
|
— |
|
|
6,902 |
|
Proceeds from (repayments on) borrowings on long-term debt |
|
(940 |
) |
|
6,000 |
|
Net cash provided
by financing activities |
|
(940 |
) |
|
12,902 |
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash |
|
1 |
|
|
(12 |
) |
Net increase (decrease) in
cash and cash equivalents |
|
(6,643 |
) |
|
5,734 |
|
Cash and cash equivalents
- beginning of period |
|
23,113 |
|
|
31,293 |
|
Cash and cash
equivalents - end of period |
$ |
16,470 |
|
$ |
37,027 |
|
|
|
|
|
|
|
|
USE OF NON-GAAP MEASURESManagement uses
non-GAAP measures to establish operational goals and cash flows,
and believes that non-GAAP measures may assist investors in
analyzing underlying trends in the Company's business over time.
Investors should consider these non-GAAP measures in addition to,
and not as a substitute for or as superior to, financial reporting
measures prepared in accordance with GAAP. In this press release,
the Company has reported non-GAAP measures of operating expenses,
net loss and loss per share, which exclude equity compensation
expenses related to stock options, warrants, restricted stock units
and common stock awards, and reconcile to GAAP operating expense,
GAAP net loss and GAAP loss per share as follows:
SUNSHINE
HEART, INC. AND SUBSIDIARIES |
Reconciliation of non-GAAP amounts to GAAP |
(Unaudited) |
(In thousands,
except per share amounts) |
|
|
|
|
|
Three months ended March
31, |
|
|
2016 |
|
2015 |
Operating
Expenses |
|
|
|
|
|
|
GAAP operating expenses |
$ |
4,555 |
|
$ |
|
7,051 |
|
|
Equity compensation costs |
|
(247 |
) |
|
|
(867 |
) |
|
Non-GAAP operating
expenses |
$ |
4,308 |
|
$ |
|
6,184 |
|
|
Net Loss |
|
|
|
|
|
|
GAAP net loss |
$ |
(4,786 |
) |
$ |
|
(7,063 |
) |
|
Equity compensation costs |
|
247 |
|
|
|
867 |
|
|
Non-GAAP net
loss |
$ |
(4,539 |
) |
$ |
|
(6,196 |
) |
|
Loss Per Share |
|
|
|
|
|
|
GAAP basic and diluted loss per
share |
$ |
(0.26 |
) |
$ |
|
(0.40 |
) |
|
Non-GAAP basic and diluted
loss per share |
$ |
(0.25 |
) |
$ |
|
(0.35 |
) |
|
|
|
|
|
|
|
|
Weighted average shares
outstanding – basic and diluted |
|
18,353 |
|
|
|
17,509 |
|
|
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 study, we also believe that some patients
treated with our C-Pulse System may 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 moderate to severe heart
failure patients. In July 2012, Sunshine
Heart received CE Mark approval for its C-Pulse System
in Europe. After terminating enrollment in its US
pivotal study, COUNTER HF, Sunshine Heart will be finalizing a
short term clinical strategy to begin a study of the C-Pulse Heart
Assist System in the United States. A long-term path is being
developed in parallel that will focus on accelerating the
development of a fully implantable system, which will be critical
to driving the adoption of C-Pulse therapy. Sunshine
Heart is a Delaware corporation headquartered
in Minneapolis with wholly owned subsidiaries in
Australia and Ireland. 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,
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, clinical and pre-clinical study designs and
activities, research and development activities, ultimate clinical
outcomes and benefits of our products to patients, design and
development of future studies, site activations, patient
enrollment in studies, timing of regulatory filings and approvals,
regulatory acceptance of our filings, our expectations with respect
to product development and commercialization efforts, market and
physician acceptance of our products, intellectual property
protection, and potentially competitive product offerings. The risk
factors described in our filings with the SEC could cause actual
events to adversely differ from the expectations indicated in these
forward-looking statements. Management believes that these
forward-looking statements are reasonable as and when made.
However, you should not place undue reliance on forward-looking
statements because they speak only as of the date when made.
Sunshine Heart does not assume any obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Sunshine Heart 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. Forward-looking statements are subject
to a number of risks and uncertainties, including without
limitation, the possibility that regulatory authorities do not
accept our application or approve the marketing of the C-Pulse
System, the possibility we may be unable to raise the funds
necessary for the development and commercialization of the C-Pulse
System and other risks and uncertainties described in our filings
with the SEC. 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.
For further information, please contact:
Claudia Drayton
Chief Financial Officer
Sunshine Heart, Inc.
T: +1-952-345-4205
Investor Relations
Sunshine Heart Inc.
ir@sunshineheart.com
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