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Abiomed Inc. (ABMD)

Q1 2009 Earnings Call Transcript

August 7, 2008 8:00 am ET


Daniel Sutherby – CFO

Mike Minogue – Chairman, President and CEO


Greg Simpson – Stifel Nicolaus

David Lewis – Morgan Stanley

Bob Hopkins – Banc of America

Assaf Guterman – Lazard Capital Markets

Eric Schneider – UBS

Bruce Nudell – UBS



Good day, ladies and gentlemen, and welcome to the first quarter 2009 Abiomed Incorporated earnings conference call. My name is Mikeda and I will be your coordinator for today. At this time, all participants are on a listen-only mode. We will facilitate the question-and-answer session towards the end of today's conference (Operator instructions). As a reminder, this conference call is being recorded for replay purposes. I'd now like to introduce your host for today's call, Mr. Daniel Sutherby, CFO. Please proceed sir.

Daniel Sutherby

Good morning and welcome to Abiomed's first quarter of 2009 earnings conference call. This is Daniel Sutherby, Abiomed's Chief financial Officer. I'm here with Mike Minogue, Abiomed's Chairman, President and Chief Executive Officer. The format for today's call will be as follows. First, Mike will provide you with strategic highlights for the quarter and I will provide some details on the financial results outlined in today's press release and then we'll 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. 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 changes, 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. Lastly, comparative references made financially in this call to revenue, expenses, gross margin, or other increases or decreases refer to first quarter of fiscal 2009 as compared to the first quarter of fiscal 2008. I am now pleased to introduce Mike Minogue.

Mike Minogue

Good morning, everyone. It has been very busy since our Impella 2.5 510(k) announcement in June. We have made significant progress on two of our fiscal year '09 corporate goals, our Impella U.S. launch and clinical trial, and increasing manufacturing capacity. These goals drive our priorities for execution. We recently conducted an investor call on our results of manufacturing capacity in Germany, and announced our Ireland expansion. So, today, I will focus more on the discussion of our first corporate goal and give more insight into our strategy on the distribution and trials.

In Q1, total revenue for Impella was up 228%, totaling $5.9 million in sales worldwide. We exceeded our internal plan in Q1 for Impella with less than 30 days of commercial sales. We're seeing great demand for Impella in the U.S. requiring focused company resources in both the trial environment and for commercial use. However, one consequence of this shift in focus was a 15% decline in our legacy business to $10.5 million. Our AB5000 VAD utilization was approximately flat to the prior quarter. Our number one goal is launching Impella 2.5, this includes U.S. clinical trial execution on Protect2 and Recover2, and providing Impella's support to patients at over 100 U.S. hospitals. We are off to a great start on this goal. So let's discuss the status of our Impella launch in the U.S.

As of yesterday, the status of Impella in the U.S. is as follows – for the Protect2 high risk PCI study, we continue to see the interest growing beyond the 150 hospitals allocated by the FDA even though the summer months always have the lowest activity and volume for PCI for the year. We have 187 hospitals pursuing this study with 55 hospitals ready for enrollment of patients, 36 with IRB approval but not yet enrolling, and 96 having submitted to the IRB for submission pending. We have completed 107 patients from 28 hospitals, or 16%, of the 654 patients required. We continue to make progress on Recover2, the AMI PCI study. 53 hospitals are pursuing the study. No hospitals are enrolling patients yet but four have IRB approval and 49 have submitted to the IRB where submission is pending. Most of the hospitals are already trained on Impella 2.5 because of the in-process Protect2 study.

On June 2nd, we announced the initial start of U.S. commercial sales and use of the Impella 2.5 under 510(k) clearance. As of yesterday, 56 hospitals have acquired the Impella technology for general use. This represents a penetration rate of 3% of the 1700 U.S. hospitals with CAT labs since June 2nd. We now have a total of 86 hospitals with Impella in the trial or with 510(k) or both. We are quickly closing in on our fiscal year '09 corporate goal of 100 U.S. hospitals. Overall, Q1 continued to demonstrate the strong market demand for Impella by both cardiologists and surgeons. Q1 was a demanding quarter that stretched our U.S. field resources and forced us to prioritize our actions due to the four active U.S. clinical trials and launching of the Impella commercial product and iPulse. The four trials are Protect2 and Recover2 each at up to 150 hospitals, Impella 5.0 pilot study at up to 16 sites, and the AB5000 portable driver study at up to 20 sites.

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