F4Q08 (Qtr End 3/31/08) Earnings Call
May 21, 2008 8:00 am ET
Dan Sutherby - CFO
Mike Minogue - Chairman, President, and CEO
David Lewis - Morgan Stanley
Bob Hopkins - Lehman Brothers
Bruce Nudell - UBS
Assaf Guterman - Lazard Capital Markets
Greg Simpson - Stifel Nicolaus
Amy Stevens - SIG
Previous Statements by ABMD
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I would now like to turn the presentation over to your host for today's call, Mr. Dan Sutherby, Chief Financial Officer. Please proceed, sir.
Good morning and welcome to Abiomed's fiscal fourth quarter of 2008 earnings conference call. This is Dan Sutherby, Abiomed's Chief Financial Officer. I am here with Mike Minogue, Abiomed's Chairman, President, and Chief Executive Officer.
The format for the call will be as follows, first, Mike will provide you with strategic highlights for the quarter and then I will provide a summary of the financial results and then we will open the call for your questions.
Before we begin, it is necessary to remind you that during the course of this call, we will be making forward-looking statements, including statements regarding future financial performance, product development efforts, Abiomed's strategic operational initiatives, market response to our new products, our progress towards commercial growth and future opportunities.
And Abiomed's actual results may differ materially from those anticipated in these forward-looking statements based upon a number of factors, including uncertainties associated with development, testing and related regulatory approvals, competition, technological change, anticipated future losses, complex manufacturing, high quality requirements, dependence on limited sources of supply, government regulation, future capital needs, and other risks detailed in our SEC filings.
Investors are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of today's conference call. The company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances that occur after the date of this conference call or to reflect the occurrence of unanticipated events.
Comparative references made today financially in this call to revenue, gross margin or other increases or decreases refer to fourth quarter of fiscal 2008 as compared to the fourth quarter of fiscal 2007 unless otherwise stated.
I am now pleased to introduce Mike Minogue.
Good morning, everyone, and thank you for taking the time to join us today. It has been an exciting quarter and productive year, as you have seen from our press release. Today, I would like to cover three main topics. They are Q4 results, the regulatory status, and fiscal year '09 goals.
So first let's discuss the recent operating highlights and product achievements. We reported record revenue in Q4 that was up 26% to $17.5 million. Impella Disposable revenue was up 308%. We are seeing great demand for this product.
During the quarter a record number of patients were supported by the AB5000 Circulatory Support System worldwide, including AB5000 patients in Germany, France, Italy, Spain, Canada, Brazil, and the United States. The AB5000 console is now installed at approximately 62% or 74 of the US transplant centers and at approximately 25% or 225 of the open heart hospitals.
We believe the new iPulse combination console that we will formally launch in the US this quarter, will primarily increase our US console penetration rate with the remaining 75% or 675 of the open heart hospitals. We do anticipate multiple consoles at each hospital, similar to the intra-aortic balloon pump model.
Based on healthcare statistics, one of the leading causes of in-hospital mortality is heart attack or AMI cardiogenic shock. To look at the potential AB5000 disposable revenue opportunity, if every transplant and open heart hospital were to support only two AMI cardiogenic shock patients per year with the AB5000 BiVAD configuration, this would generate $163 million in disposable revenue.
Healthgrades.com is a public website reporting heart attack death rates for only Medicare patients. Here are some specific examples of what is in the report of in-hospital Medicare death rates for the last three years. One New York transplant hospital reported 2,096 cases with 11% mortality or 237 deaths. Another open heart hospital in Michigan reported 1,768 cases with 11% mortality or 201 deaths. And one open-heart hospital in Ohio reported 2,129 cases with 13% mortality or 277 deaths.
I encourage all of you to review your local heart hospital performance. This website supports our belief that there is clearly a need for more than two AB5000 patients a year at every open heart hospital. Our AB5000 AMI abstract presented at TCT showed that of the 100 patients more than 50% were in cardiogenic shock for more than 24 hours. Even with this near-death population, 40% survived and two-thirds recovered their hearts.
So based on the above three examples, just those three hospitals, that could mean 286 patients get to live and 188 of them will recover their heart.
Now, the iPulse combination console gives every heart hospital a cost-effective solution to treat these patients and reduce their in-hospital mortality rates. In addition, we think Impella will create more awareness in the cath lab for these shock patients suffering failure on both sides of their heart.
From a regulatory perspective, the AB5000 and BVS are the only products approved by the FDA for all heart recovery acute events. CMS also assigns DRG 1 for heart recovery with BVS or AB5000 VADs. This is the highest paying DRG in the country, with an average payment of $171,000.