Abiomed's heart pumps win Chinese approval as revenue soars

Abiomed ($ABMD) disclosed that it gained regulatory approval in China to roll out two crucial models of its Impella heart pump and related technology, capping a quarter where revenue and net income soared.

The Massachusetts cardiac device company continued an aggressive push to grow the global customer base for its Impella heart pumps, and the hard work once again paid off during its fiscal 2014 third quarter. Initial investor response came in measured, however, in relation to those gains. Abiomed closed at $26.93 on Jan. 30, up 2.75%, though the stock remained slightly down in the week's trading.

Revenue landed at $46.2 million, a 21% hike over $38.3 million from the fiscal 2013 third quarter. Execs also crowed about booking $4.4 million in net income during the quarter, versus $2.7 million over the same period a year ago.

Abiomed used its quarterly investor disclosure to announce it won Chinese regulatory approval to start selling its Impella 2.5 and 5.0 model heart pumps, along with a console that goes with the equipment. A limited launch is set for 2015 at between 5 and 10 "key" hospitals in China.

That's big. China is the billion-plus patient market that makes med tech and pharmaceutical companies around the world salivate profusely. A limited launch is a first step toward tapping that enormous patient base as China continues to modernize and expand its healthcare system.

Abiomed also noted other gains during the quarter, including the signing of 31 new hospital clients for Impella 2.5, which now reaches 836 customer sites. An additional 75 hospital clients also signed up for Impella CP, bring the U.S. site total up to 312. As well, Abiomed pointed out that it now has $107.4 million in cash on hand as of Dec. 31 and no debt.

Michael Minogue--Courtesy of Abiomed
Michael Minogue--Courtesy of Abiomed

Michael Minogue, Abiomed's long-time CEO, said in a statement that the company is working hard to "increase revenue, complete the regulatory requirements and become the new standard of care."

It's not all wine and roses, however. The U.S. Justice Department issued a subpoena in 2012 alleging that Abiomed's executives inflated the stock price through improper marketing of the Impella 2.5 heart pump. That action has also generated shareholder lawsuits. Costs from both actions reached $800,000 for the quarter, however, a much lighter impact than earlier in the year.

Abiomed said it is continuing to predict $180 million to $185 million in global revenue for its fiscal 2014. Global Impella revenues should jump 20%, the company believes, with expectations of an operating margin between breakeven and 5%.

- read the earnings release

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