LOS ANGELES, CA -- (Marketwire) -- 02/06/13 -- Shares of Sunshine Heart Inc (NASDAQ: SSH) hit a high of $6.99 and closed the day + 7.24% at $6.81 + 0.46 on Tuesday after we first told our premium readers that shares showed potential as both a speculative trade and short squeeze candidate. Both points still hold true a day later.
Days ago, Piper Jaffray's senior analyst Thomas J. Gunderson initiated coverage of Sunshine Heart Inc (NASDAQ: SSH) with a $10/share price target, letting clients know that the firm was anticipating shares to outperform relative to the median of the group of stocks covered by the analyst.
"SSH has developed a type of ventricular assist device (VAD) that is designed to enhance the efficiency of the heart for patients suffering from heart failure. We view SSH as having passed a number of development and regulatory hurdles including IDE approval for a pivotal trial in the US for ultimate FDA approval," wrote Gunderson in his report.
The Piper Jaffrays report indicates: "We are intrigued with SSH's C-Pulse device given the device's minimally invasive approach to enhancing the heart's pumping action, while implanted outside of the blood stream. This approach avoids complications with stroke or thrombus which have emerged with traditional VADs, and represents a key clinical benefit. An additional benefit relates to up front and total cost of treatment, with an anticipated ~$60K ASP relative to LVADs which are priced at $100K+, shorter hospitalization times, and a lower incidence of re-hospitalization post-implant."
"According to the American Heart Association there are 5.1 million Americans suffering from CHF. Clinical literature puts the proportion of NYHA Class III heart failure at ~20% of that number or roughly ~1.0M potential patients. Assuming a 10-20% applicability hurdle for potential implants, based on comorbidities, cost/reimbursement, and a $60K ASP, we project a $6-$12 billion addressable market for C-Pulse."
After faltering a bit in mid-January -- thanks to now "verified as false" street rumors that the firm would do a major dilutive financing -- SSH shares had begun to bounce back steadily on relatively low volume. Quietly over the past few sessions, shares have regained momentum to the upside and could go higher as the shorts who had sparked short interest in the stock rise 20% without any other catalyst, continue to cover.
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