http://seekingalpha.com/article/3727596-celladon-merger-a-win-win...

http://seekingalpha.com/article/372...-all-evaluating-existing-shareholders-choices


Compare this to Sunshine Heart and its C-Pulse. At December 2015, a year ahead of Celladon, C-Pulse is already beyond Phase II, with a Pivotal Phase III trial proceeding in the US and CE Mark already obtained in the EU. If the market is effectively valuing Celladon's product candidates at $250M in a year's time, then it is inconceivable that Sunshine Heart's product candidate with already demonstrated efficacy and safety, and a huge market with an unmet need, could be valued at anything less than $250M right now. At that valuation the Sunshine Heart shares today would be priced at $13.60 per share, over 7 times the current share price. That situation is absurd, and it will be fixed by a new CEO hired specifically to fix it.

At its current beaten down share price, Sunshine Heart offers potential large upside in the short term and further upside in the medium to longer term. I cannot see any dilutive equity raising at the current share price. It is just not going to happen. The low share price potentially makes other alternatives, which might not normally be considered, suddenly attractive. Once the new CEO gets this type of message across to the investment community, expect investors to return in anticipation of an increasing share price in the near term, continuing in the medium to longer term.


The Sunshine Heart (NASDAQ:SSH) C-Pulse system is an investigational medical device in a Pivotal Phase III trial in the USA and with CE Mark approval in Europe. I have written previously comparing C-Pulse to Celladon's former gene therapy Mydicar both in relation to the severity of illness of heart failure patients treated and the degree of clinical efficacy achieved (see "Competitors To Sunshine Heart C-Pulse In NYHA Class III: Two Down, One To Go").
In that article, I analyzed the publicly available data for Celladon and demonstrated that Mydicar was likely always doomed to failure. Mydicar high dose had 'less sick' HF patients than C-Pulse but lacked clinical efficacy at 12 months. C-Pulse had the sicker patients but showed clear clinical efficacy at 12 months, with some patients becoming asymptomatic for heart failure. The share prices of the two corporations did not reflect that situation. At January 30, 2014, Celladon and Sunshine Heart closing share prices were $8.18 and $10.05 respectively. By April 24, 2015, immediately before the announcement of the failure of Mydicar in the CUPID2 trial, the respective share prices were $13.68 and $4.33.
So why did Celladon share price increase by 67% in that period while Sunshine Heart share price fell by 57%, when Sunshine Heart C-Pulse was showing greater clinical efficacy than Celladon's Mydicar? The answer lies in CEO style. The former Celladon CEO had the gift of being able to perform extremely well both "on" the company as well as "in" the company. The "in" is about conducting trials and other operating matters. The "on" is about marketing the company to investors. Perception is everything, particularly in relation to maintaining share price and raising capital at attractive share prices. It is clear the proposed CEO of the Celladon post merger has those capabilities and qualifications and experience to work both "in" and "on" the company. In the case of Sunshine Heart, the former CEO demonstrated great capability working "in" the company. C-Pulse is now investigating targeting two more therapeutic applications, angina and pulmonary arterial hypertension ((PAH)), in addition to heart failure. The science towards understanding what is producing the clinical improvements is being advanced at a rapid rate and attracting the interest of physicians and researchers. It is fascinating that the ability to turn C-Pulse on and off allows an investigator to observe changes in hemodynamics and neuromodulation effects live, so to speak. But there has been a clear lack of working "on" the company and selling the story to the investment community. A new CEO is to be hired and it is certain the experienced Board will ensure that person is eminently qualified to work "on" the company and lift the share price.