Here's What Just Happened With CHF Solutions, Inc. (NASDAQ:CHFS)

Every so often in the biotechnology space, a microcap company will soar on seemingly nothing but fresh air, only to come crashing down.When this happens, there's always a fairly sized portion of the market ready and waiting to shout pump and dump and jumping in short to try and take advantage of a correction from the spike and a return to pre-rise pricing.When we see this sort of action, here at Insider Financial, we're not so quick to denounce the move. On numerous occasions in the past we've used these sorts of runs as a sort of screener device; that is, the run alerts us to the stock and we take the opportunity to dig into the fundamentals a little bit to see if the shorts are correct and there's no justification for the move or if, indeed, this run is symptomatic of a longer-term shift in sentiment and – ultimately – valuation.This exact scenario just played out with CHF Solutions, Inc. (NASDAQ:CHFS).And the conclusion we've arrived at?We like what we see.For those new to this one, the company is a biotechnology company that developed and is now trying to commercialize a device called the Aquadex FlexFlow system. It's designed to facilitate a therapy called aquapheresis therapy, which is a designed to remove excess salt and water from the body.There are more than one million US hospital admissions each year for patients with heart failure and around 5,000 hospital facilities that have units specifically set up to treat heart failure patients. Of these one million patients, more than 90% present with symptoms of aquapheresis and the current standard of care therapy, while effective in reducing the severity of the condition, can cause imbalances in other areas – blood pressure, heart rate, or the balance of electrolytes (e.g. sodium, potassium, etc.) in the body.So, with Aquadex FlexFlow, CHF is trying to bring something to market that can serve the same role and eliminate aquapheresis without impacting the above-mentioned issues.And the treatment works. There's a whole host of data in place to suggest that it can replace SOC and can do so effectively.Which brings us to the recent crash and burn.The company has struggled to roll out the technology to its full potential because of certain manufacturing issues and capital restraints based, which has limited its ability to push forward with a full sales force.That's now changed. CHF just moved its manufacturing from a facility owned and operated by Bayer AG (ADR) (OTCMKTS:BAYRY), which should serve to cut overheads and streamline output capacity. It also upped its salesforce (as per the latest financials) to include 6 additional experienced sales professionals and has increased its US sales team to 10 territories, up from 4 territories in Q2.Subsequent to a recent raise, there's a little over $12.5 million cash on hand, meaning dilution isn’t an immediate concern (and this risk mitigation is boosted by the fact that the company is now bringing in revenues of just shy of a million dollars quarterly), and also serving to underline CHF's ability to really go at some fresh facilities with its commercialization efforts.To put all this another way, this is a company that – over the last six months or so – has transformed itself from a cash-strapped microcap with a solid product but no ability to market it to its full potential to a well-capitalized, streamlined play with a strong sales force and growing revenues.That's why we think there's more run room heading into the close of this year.It's still a young company, of course, and in that regard, it's far from a sure thing. With a market cap of just $23 million right now, however, there's an awful lot of room for appreciation.We will be updating our subscribers as soon as we know more. For the latest updates on CHFS, sign up below!Image courtesy of Ed Uthman via FlickrDisclosure: We have no position in CHFS and have not been compensated for this article.