Abiomed (ABMD) reported second-quarter fiscal 2011 adjusted (excluding one-time items) net loss per share of 9 cents, lower than the Zacks Consensus Estimate of a loss of 14 cents and the year-ago loss of 21 cents. Net loss (as reported) shrunk 58% year over year to $3.2 million, helped by strong sales from the company’s Impella cardiac pumps.
Revenues climbed 17% year over year to $23.4 million, beating the Zacks Consensus Estimate of $22 million, boosted by higher demand for Impella systems (including Impella 2.5 and 5.0). Healthy revenues fueled gross margin expansion in the quarter which improved to 77% from 73% a year-ago.
Worldwide Impella revenues jumped 33% year over year to $17.6 million. U.S. commercial Impella revenues leapt 33% to $16.1 million. However, non-Impella revenues dipped 15% year over year to $5.8 million.
Abiomed’s Impella systems continue to enjoy strong traction. Roughly 597 commercial patients in the U.S. were treated with Impella during the quarter, representing an annualized growth of 77%. The company is pursuing a number of strategies to further boost Impella’s utilization.
Abiomed presented updated clinical data from its USpella registry (a U.S. multicenter observational registry of Impella 2.5 patients) at the 2010 Transcatheter Cardiovascular Therapeutics (TCT) scientific meet in September 2010. Data revealed significant improvement in blood pumping along with a low mortality rate. Moreover, the company launched a new training program to educate hospitals about the role of Impella in improving heart muscle recovery.
Balance Sheet
Abiomed exited the quarter with cash, cash equivalents and short-term marketable securities of $54.1 million, up 3.4% year over year. It remains a zero debt company.
Outlook
Based on a favorable Impella outlook, Abiomed has raised its revenue guidance for fiscal 2011. The company now expects total revenue for the year in the range of $93 million to $97 million, up from earlier projection of $93 million to $95 million. U.S. Impella revenues are now expected to grow roughly 30% year over year (versus a previous forecast of 25%−30%) in fiscal 2011.
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. Abiomed’s strategy focuses on heart recovery as the goal for all acute cardiac attacks. Its 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 and faces significant reimbursement risk. Currently, we have a Neutral recommendation on the stock, which is supported by a short-term Zacks #3 Rank (Hold) that the company maintains.
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