Sunshine Heart (SSH) announced that the company is taking a temporary pause from enrollment of its COUNTER heart failure trial. Protocols state that if at least three of first 20 patients pass away, for any reason, the trial must be paused / evaluated. Sunshine has reported 4 patient deaths, all of which are non-device related. The stock has traded down 25% on this news.
Temporary Setback Warranting 25% Drop?
Sunshine Heart intends to file an Investigational Device Exemption (IDE) by March 16th to address the temporary suspension and plan resumption. A supplement carries up to a 30-day review period by the FDA. Depending on findings, trial may resume in mid-April.
Though this is a setback for Sunshine Heart, I believe the market has overreacted. None of the reported deaths have been related to the device, meaning C-Pulse safety profile remains unchanged.
Additionally, this news was announced 9 days after the FDA gave Sunshine Heart unconditional approval to conduct an interim analysis of the COUNTER trial. Even if 2 of the deaths occurred after FDA’s approval, the agency was confident enough to give Sunshine Heart the thumbs up. If the agency saw these non-device related deaths as non-issues to the trial, why is the market selling off on the news?
Sunshine Heart has had issues with enrollment in the past. Patients have been hesitant to opt in for earlier surgery, while still classified as Class III, choosing to wait until it was absolutely necessary in Class IV.
The company reported that the number of patients considering enrollment is nearing 100 for Q1 2015. This is great progress from just a year ago. However, this latest news will surely have an impact on patient decision making in the future. Having 20% of the first 20 patients die, for whatever reason, is not something that forthcoming patients would want to hear.
In conclusion, the temporary pause is a hindrance to Sunshine Heart especially after the company had announced funding solution and FDA interim analysis approval. Is this worthy of a 25% decline in price though? Definitely not as Sunshine Heart will continue its US study, albeit with a temporary delay.