ABIOMED reported impressive second-quarter fiscal 2015 results. The
company also raised the lower end of its revenue guidance for
fiscal 2015, which is another positive in our view. We believe that
the anticipated approval of Impella 2.5 by Feb/Mar 2015 will serve
as a significant growth catalyst for the company. ABIOMED's
expanding product portfolio, growing addressable market, positive
clinical trials for Impella RP and Symphony are other encouraging
aspects. However, intensifying competition remains a concern, which
will likely hurt pricing power. Moreover, higher research &
development expenses will negatively impact profitability.
Considering these factors, we maintain our Neutral recommendation
and set a price target of $36.00.
Headquartered in Danvers, MA and founded in 1981, ABIOMED Inc.
(ABMD) is engaged in developing, manufacturing and marketing of
medical products, designed to assist or replace the pumping
function of the failing heart. The company's products are mainly
sold in the U.S., Canada, Europe and Japan.
ABIOMED's revenues increased 15.8% year over year to $100.7
million at the end of six months of fiscal 2015. International
sales accounted for 11% of total revenues. Its main product line,
Impella, contributed almost 91.2% of total revenues. Meanwhile,
non-impella products (AB5000), largely focused on the heart surgery
suite, contributed 2% of total revenues.
Impella 2.5 (via femoral artery) is primarily used by
interventional cardiologists to support patients in the cardiac
catheterization lab (cath lab). The percutaneous micro heart pumps
with integrated motors and sensors received 510(k) clearance from
the U.S. Food and Drug Administration (FDA) in Jun 2008 for partial
circulatory support for up to six hours. In the European Union
(EU), Impella 2.5 is approved for use for up to five days. The
device can pump up to 2.5 liters of blood per minute. Notably, the
total number of customer sites deploying the device reached 910 at
the end of the second quarter of 2015.
In Oct 2014, the FDA approved ABIOMED's Impella 2.5 for use in
the indication of high-risk percutaneous coronary intervention
(PCI). Currently, the company expects to get the Pre-Market
Approval (PMA) for the safety and effectiveness of Impella 2.5 by
The Impella 5.0 (via femoral artery) and Impella LD (implanted
directly through an aortic graft) received 510(K) clearance in Apr
2009, for circulatory support for up to six hours. In the EU, the
devices are approved for up to ten days' use. These devices are
primarily used in the heart surgery suite and support patients who
require higher levels of circulatory support as compared to the
Impella 2.5. These equipment can pump up to 5 liters of blood per
Impella CP received 510(k) clearance in Sep 2012 and provides
blood flow of approximately one liter more per minute than Impella
2.5. By using an extracorporeal bypass control unit, Impella CP
offers partial circulatory support for up to six hours. It can also
provide partial circulatory support for up to six hours, during
procedures not requiring cardiopulmonary bypass. Notably, Impella
CP is approved in the European Union and Canada.
Impella RP is a catheter-based axial flow device that can pump
more than four liters of blood per minute during right heart
failure. In Sep, 2014, ABIOMED announced clinical trial results of
the device from the RECOVER RIGHT study, which showed a survival
rate of 73% in the overall patient population that participated in
the study. The device has already received approval in the European
Union and countries which require CE marking.
ABIOMED's non-impella based products include AB5000, which is
used to support acute heart failure patients. The company's
Symphony device designed to treat chronic patients with moderate
heart failure is currently undergoing human clinical trials outside
In Jul 2014, ABIOMED acquired Germany-based device maker,
Entwicklungsgesellschaft mbH (ECP), for $13 million in cash, with
additional potential payouts of $15 million.
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