Heart devices maker,
) has entered into a five-year contract with the U.S. Department
of Veteran Affairs to supply Impella products through its
authorized Veteran's Administration (VA) Federal Supply Schedule.
The contract will run till Aug 2018.
As per the agreement, the Impella platform will be available
in an automated online database, thereby making accessibility to
the technology much quicker and easier. Abiomed will be able to
supply the Impella platform to roughly 169 VA facilities, 46
Department of Defense hospitals and other federal agencies in the
U.S. via the online portal. Moreover, management remains
committed to serving the nation's military veterans through the
Medical Technology Veterans program.
According to a study by the Centers for Disease Control and
Prevention (CDC), veterans are at higher risk of suffering from
two or more chronic ailments such as diabetes, heart disease, and
high blood pressure. We believe that the long-term contract with
the VA hospitals and federal agencies should significantly boost
Impella sales going forward. Management forecasts revenues to
grow 14%-17% to $180 million-$185 million in fiscal 2014. Global
Impella sales are expected to increase by 20%.
Mass.-based Abiomed is a medical device company with a blue
streak growth path. Given its unique technology, Abiomed enjoys
strong demand for its Impella products. Both the Impella CP and
RP are considered future growth drivers for the company.
Recently, the company revealed that physicians across the U.S.
have implanted more than 15,000 Impella pumps in patients needing
ABMD opened 27 new U.S. sites for Impella 2.5 in the last
reported quarter to end with 775 customer sites. Moreover, 66 new
hospitals adopted the latest Impella CP, with 172 customer sites
in the U.S. The device has also been implanted in more than 1,000
However, the company's engagement in a number of legal issues
is leading to higher expenses and resulting in net loss. This has
also driven management to lower its operating margin guidance,
which is a risk to the bottom line.
ABMD has a Zacks Rank #3 (Hold). Medical stocks that are worth
). All these stocks carry a Zacks Rank #2 (Buy).
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