Zacks_Analysts' Blog : Outperform on Abiomed - Analyst Blog

We retain our Outperform recommendation on Abiomed (ABMD) following its impressive third-quarter fiscal 2012 results which outpaced the Zacks Consensus Estimates.

Adjusted earnings per share of 6 cents a share for the quarter outperformed the Zacks Consensus Estimate of a loss of 1 cent. The company swung to a profit in the quarter on the heels of solid revenues from its popular Impella cardiac pumps. Revenues soared 18% year over year to $32.2 million.

Abiomed raised its revenue guidance for fiscal 2012. The company’s shares got a major boost following its announcement of the third quarter results.

Abiomed boasts of 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.

We remain upbeat about the prospect of the Impella cardiac pumps, which are used for the support of acute pre-shock patients or for prophylactic support of patients undergoing high-risk percutaneous coronary intervention.

The company is witnessing strong demand for the Impella pumps. Utilization of Impella continues to grow at a healthy pace as borne out by the increasing number of patients being treated with the device. Higher Impella sales continue to boost overall revenues and we expect Abiomed to maintain this growth trend through 2012. 

Abiomed is pursuing a number of strategies (including additional clinical studies) to boost Impella utilization. Multiple clinical data updates on Impella through the remainder of fiscal 2012 are expected to boost the device’s use.

Abiomed, in late 2011, unveiled its multi-year growth initiatives at its annual investor day in New York City. The company revealed that its expanded heart recovery strategy and other new action plans aimed at driving multi-year revenues and earnings growth.

Moreover, Abiomed announced the successful first human use of its new Symphony synchronized heart pump. Abiomed also revealed, at the meet, a new Impella product dubbed “Impella cVAD” which is expected to become commercially available in the U.S. in the summer of 2012. Moreover, the company noted that it expects to foray into the Japanese market with its Impella products in 2013. 

That said, we remain cautious about the intensely competitive environment and reimbursement risk. Abiomed faces competition from organizations developing permanent heart assist products including Thoratec Corporation (THOR). Our recommendation is backed by a short-term Zacks #2 Rank (Buy).