We reiterate our Outperform rating on
). Its fourth quarter fiscal 2012 adjusted (excluding one-time
items except stock-based compensation expenses) earnings per share
of 7 cents beat the Zacks Consensus Estimate of 6 cents per share.
Revenues soared 31% year over year to $37.3 million (quarterly
record), beating the Zacks Consensus Estimate of $35 million.
Abiomed is enjoying strong demand for its Impella products. This
is evident from a 37% record year-over-year growth in global
Impella sales in fiscal 2012. The U.S. contributed roughly 93% of
worldwide Impella sales. The company believes that the record
growth during the quarter and fiscal 2012 was attributable to the
inclusion of the Impella products in the ACCF/AHA/SCAI 2011
Guidelines (which was released in November 2011), the established
CMS DRG reimbursement and the pending CPT codes for physician
reimbursement. The company opened 26 new U.S. Impella 2.5 sites in
the most recent quarter, to end with a total of 631 customer
sites.Moreover, the company intends to foray into the Japanese
market with its Impella products in 2013. Based on these tailwinds,
the company expects global Impella sales to rise by roughly 30% in
Abiomed recently announced CE Mark approval for its new Impella
product dubbed "Impella cVAD" in the European Union. It is expected
to become commercially available in Europe soon. Also, Abiomed
announced the first successful human use of its percutaneous
Impella cVAD heart pump outside the U.S. The device can pump up to
4 liters of blood in one minute.
The company has adopted a number of strategies to further boost
Impella's utilization. Abiomed, in March 2012, made a number of
presentations on the Impella device at the American College of
Cardiology Scientific Sessions. One of the presentations included
the first human use of the Impella RP heart pump outside the U.S.,
for treating right-sided heart failure.
Abiomed's strategy focuses on heart recovery as the goal for all
acute cardiac attacks. Abiomed's products are designed to enable
the heart to rest, heal and recover. We believe this niche product
line feeds a growing trend towards procedures that are either
minimally invasive or assist the body to recover more naturally.
Minimally invasive surgery helps the patient overcome the trauma
faced in open surgery. It is becoming increasingly popular in
helping patients reduce recovery time, thereby saving
However, Abiomed faces the risk of third-party reimbursement for
its devices. The company's products are reimbursed by the Center
for Medicare and Medicaid ("CMS") and commercial payers.
Third-party reimbursement programs in the U.S. and abroad, both
government-funded and commercially insured, are presently
developing different ways of controlling healthcare costs that
include prospective reimbursement cuts with careful review of
medical bills. Any reimbursement cut in future will negatively
impact sales of Abiomed's products and subsequently the company's
While we are upbeat about the prospects of Impella, we remain
cautious about the intensely competitive environment. Abiomed faces
competition from organizations developing permanent heart assist
Jarvik Heart, World Heart Corporation
and MicroMed Technology
ABIOMED INC (ABMD): Free Stock Analysis Report
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