heartware's example

Everytime i need "believe" in my longterm investment in Sunshine Heart through all these dips and lack of positive price movements i turn to the example of Heartware . Looking back at what Heartware achieved in the past 4 years makes you wonder what can Sunshine Heart achieve with an even superior product + larger market

I use Heartware's model also because of the many similarities to sunshine heart's company . When Heartware transitioned to the US market , gained CE Mark , and started their pivotal US trial their market cap was approx 250 million thats approximately 5 times the market cap of sunshine heart .

Heartware listed into the Nasdaq in february 2009 with a price in the 25-30 . Heartware was under a takeover bid from thoratec as soon as they were listed in the nasdaq and were under a takeover bid of 282 million dollars . The acquisition was blocked by the FTC .

" The Commission’s administrative complaint charges that Thoratec’s proposed acquisition of HeartWare would be anticompetitive and violate federal antitrust laws. The complaint alleges that Thoratec is willfully attempting to monopolize and conspiring to maintain its monopoly in the U.S. LVAD market, thereby denying patients the potentially life-saving benefits of competition between Thoratec and HeartWare. Competition from HeartWare has already forced Thoratec to innovate even though the HVAD is still in clinical trials, according to the complaint. This competition will intensify once HeartWare’s HVAD receives FDA approval, resulting in lower prices and enhanced features that will increase the availability and quality of these life-saving devices."

http://www.ftc.gov/opa/2009/07/thoratec.shtm

http://ir.heartware.com/phoenix.zhtml?c=187755&p=irol-newsArticle&ID=1315340&highlight=

The failure of the acquisition was a blessing i believe for heartware and it helped them gain "street" recognition in the market and the press that it needed and thus , the price didnt fall as sunshine heart did after its listing .

Sunshine heart listed into the Nasdaq in february 2012 with a price of 12 dollars . Reached a high of 22.90 on March 1 then went on a downward spiral to the low of 2.50 and went on a monumental run from these ranges to approximately 17 dollars before falling back to the 6-8 dollar range .

The monumental rise in my opinion was a pr stunt to have the stock offering which was completed in august 2012 . my only question as with this weeks offering is why do sunshine heart have these offerings in very low prices . There are 2 viable answers , one could be that the market and sunshine heart do not feel their shares are worth a higher price - which i find unlikely . The second would be the offering is aimed for " particular parties " which are in collaberation or have a link or part of " the sunshine heart community " therefore , they would like to increase their stake and their thresh-hold in the lowest cost rather than paying alot .

back to heartware , at this stage they had the ce mark and started their pivotal Us trial . In q3 of 2009 they registered sales of $7.5 million . The sales increased every quarter since and revenues soared which propelled the price to shoot a high of 99.10 by the end of 2010 .

Dont want to get into specifics or too much into detail into heartware , i believe the registration of sales is what accelerated their rise .

Back to sunshine heart . We have a more superior product , less invasive , more affordable , less hospital downtime , reversal of heart disease ,bigger market to treat , and most importantly no contact with the blood .

sunshine heart 2013 : As CEO dave rosa mentioned in the end of year financials , 2013 we will focus on the start of trials in the US and the post trials in europe . Reimbursements is the keyword . The first time we register sales and have some revenue it will increase each quarter and strengthen the c-pulse success on paper . It's potential is unquestionable but we need to show that it will be used and more effective , hence , profitable in the long run .


Future offerings :

even before this latest offering , we had enough cash to last us till the midpoint of the trials - year and a half -
the timing of this offering and the aspire deal , makes you wonder , who is entering and why in these low prices when you could have easily had an offering at a higher price .

if its a future buyout etc i doubt it as why would you allow someone to accumulate shares and buy you out down the road at such a low price ?

as i said i believe its to allow " one of the group" to strengthen its position and for the board and management to maintain their power in the company to ward off suitors . ( at a lower cost )

the aspire deal allows them to dip into these funds to ward off suitors . the deal is up to 25 million . we just used up half of that in this offering . lets say down the road another offering at 9 dollars say 1.5 million shares and thats the 25 give or take .

Point im trying to make is , we have 9.5 million outstanding shares . With this weeks offering well be at approx. 12 million shares . with a 1.5-2 million shares
offering down the line + options of management if excercised we will have outstanding shares of 14-15 million shares .

Heartware have approx 14.8 million shares outstanding .

So basically if we manage to maintaine our good cash position and have another offering down the line , wed be there or there abouts the same outstanding shares number as heartware , and more importantly still a very low flow and held by insiders + institutions .

I feel there are many similarities and hopefully we can make the same strides especially with a more superior product and more revoulutionary .

We need the results of the update of the trial to go well next year .

What price is realistic if all goes to plan . Weve read all sorts of numbers everywhere in articles and analysts and such . but what is realistic ? what would make you sell down the line ?

if there was a buyout offer for sunshine heart in the near term , and with a current price of 5 dollars , i feel the buyout price would be somewhere between 25-30 . thats a 500% - 600% markup which is very good anywhere you look at it . But the main question , arent we supposed to be in that range already ? or should be this year ?

My hopeful theory and ideal scenario would be , achieving our milestones this year with the trials and post trial in europe . re imbursements will come from different clinics at different times as acceptance of reimbursements are given in different times therefore it wont all be in the same time . any revenue will propel the stock 15+ . Positive data on the trials after a year from now , and we could be in the 30 range . this is when we look at buyouts . if our current price is say 30 , any buyout offer even with just a 100% markup and well be looking at 60 dollars .

That is what im hoping and that for me personally id happily sell . hopefully in the next 2-4 years we can reach even higher than this who knows . just hopeful talking by me and trying to keep the faith in a product which i feel will stamp its name in history of heart devices .



- all what was written above is just my theory and ideas of whats going on with sunshine heart and a comparison with a company with similar beginnings with similar roots . I do have a position in the company with a long term view . i could be wrong with my theories and my predictions .

wish you all the best and lets enjoy the ride and hopefully everyone can reach their targets on a personal level . and more importantly , hope sunshine heart are to be succesful with the c-pulse as it will make a huge difference to million of sufferers of heart disease .

all the best