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Eden Prairie's Sunshine Heart watches St. Jude's deal to buy Thoratec

St. Jude's $3.4B Thoratec deal would be its biggest buy yet
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Sunshine Heart Inc. CEO Dave Rosa is watching St. Jude Medical Inc.’s pending $3.4 billion deal to buy Thoratec Corp. more closely than most med-tech executives.
One reason is simple: Both companies make mechanical devices that treat patients suffering from heart failure.
Dave Rosa is CEO of Sunshine Heart.
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Dave Rosa is CEO of Sunshine Heart.
But the deal could have an even more direct impact on Sunshine: The company disclosed Tuesday that Thoratec is one of its investors, an arrangement Little Canada-based St. Jude would likely inherit if the acquisition closes.
Rosa estimates Pleasanton, Calif.-based Thoratec’s stake in the company ranges between 2 and 5 percent.
Thoratec makes mechanical pumps called ventricular assist devices that circulate blood throughout severe heart failure patients’ bodies.

Sunshine was born in Australia, but its U.S. headquarters are in Eden Prairie. The company has about 60 Twin Cities employees. The device is still in clinical trials and isn’t cleared for U.S. sales.
Rosa, a former executive at St. Jude, took a few minutes to talk with the Business Journal about the Thoratec deal. The conversation was edited for length and clarity.
How will Thoratec’s status as a Sunshine shareholder affect your company if the St. Jude deal closes? When Thoratec invested in us, they received board observation rights. They didn’t have voting privileges, but they could attend all the meetings. Those rights transfer to St. Jude. When you look at St. Jude, we would be a nice fit for them, in my opinion. Their initial investment in the heart-failure space was buying CardioMEMS, and that device is often used on class-three heart failure patients. Class three is our space, and that’s really where we fit.
How would the Thoratec deal affect the market for ventricular assist devices? It validates the market. For years, people were asking, “Why aren’t any of the big guys acquiring this technology?” There are not many heart-failure therapies still out there for this class of patients. This could generate steam on the M&A side of things, but it may not be for quite a while. In terms of how it will affect the Twin Cities area, St. Jude may add some additional personnel locally to be responsible for the business. I don’t think they would all of a sudden move the facility out of California and start making those devices here.
How is your device different from Thoratec’s? Heart failure has different classifications — one through four, with one being the least sick. We’re class three, and Thoratec’s market is class four — patients who are waiting for heart transplants. Our procedure itself is much more basic and benign than later-stage therapies. We’re not taking over the entire function of the left side of the heart. We assist the left side of the heart, but it still has to work. Also, we aren’t interacting with a patient’s blood stream, so patients can disconnect from the device without the risk of death. We’re also developing a fully implantable system and will start our first in-man study next year.