Impella Trims Abiomed Loss

Abiomed (ABMD) reported first-quarter fiscal 2011 adjusted (excluding one-time items) net loss per share of 10 cents, better than the Zacks Consensus Estimate of a loss of 14 cents and the year-ago loss of 16 cents. Net loss (as reported) trimmed 23% year-over-year to $6 million (or 16 cents a share) as revenues were boosted by a record utilization of the company’s Impella cardiac assist device systems.

Revenues & Margins

Revenues soared 11% year-over-year to $22 million, led by higher demand for Impella systems. However, sales narrowly missed the Zacks Consensus Estimate of $23 million. Worldwide Impella revenues climbed 38% year-over-year to $16.6 million. U.S. commercial Impella revenues reflect a more robust growth, cruising 48% to $15.5 million. However, non-Impella revenues slid 32% year-over-year to $5.4 million, hurt by cancellation of distributor contracts in Europe and the restructuring of surgery business.

Abiomed continues to enjoy strong adoption for its Impella systems. Roughly 595 commercial patients (a record) in the U.S. were treated with Impella during the quarter, representing annualized growth of 74%. The company is pursuing a number of strategies to further boost Impella utilization.

Healthy revenues fueled gross margin expansion in the quarter, which improved to 76% from 75% a year ago.

Balance Sheet

Abiomed exited the quarter with cash, cash equivalents and short-term marketable securities of $54.9 million, up marginally year-over-year while down 6% sequentially. It remains a zero-debt company.


Abiomed has not provided any updated guidance for fiscal 2011. The company expects total revenues in the range of $93 to $95 million for the year. U.S. Impella revenues are expected to grow between 25% and 30% year-over-year while non-Impella sales are expected to erode 25% to 30% year-over-year.

Abiomed is engaged in developing, manufacturing and marketing medical products designed to assist or replace the pumping function of a failing heart. The company has a broad portfolio of products that are life-sustaining in nature. The company’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.

However, Abiomed continues to make losses and operates in an intensely competitive environment. The company also faces significant reimbursement risk. Currently, we have a Neutral recommendation on the stock.

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