ABIOMED (ABMD) Banks On Impella Platform, Forex A Concern

ABIOMED Inc. (NASDAQ:ABMD) , a leading medical product developer, is focusing heavily on its proprietary Impella Platform to drive customer base.

We believe that robust demand for the Danvers, MA-based company’s Impella product line will continue to drive the top line in the long term. Impella is a percutaneously inserted ventricular assist device that has been increasingly used in patients with severe heart failure, cardiogenic shock and high-risk percutaneous intervention (PCI).

ABIOMED will continue to leverage on the growing number of patients suffering from coronary heart diseases in the United States. Meanwhile, Impella revenues grew a strong 30% globally to $127.2 million in the last quarter.

Performance is expected to remain bright on account of the company's penetration into both the prophylactic high-risk PCI and cardiogenic shock patient market. This is also evident from the fact that both Impella 2.5 and CP continue to add centers in the United Sates. At the end of the last reported quarter, the installed base for Impella 2.5 heart pumps in grew by 16 hospitals, taking the installed customer base total to 1,154 sites. The installed customer base for Impella CP heart pumps grew by 46 hospitals, reaching a total of 1062. The company also announced the successful launch of the Abiomed Impella Quality Program to improve clinical outcomes. Also, cost-savings efforts remain encouraging.

The company recently announced the release of a new study on Circulation Research (a bi-weekly medical journal) that demonstrates the efficiency of Impella heart pump device in reducing the risk of acute kidney injury during high-risk PCI. New publications regarding the devices in leading medical journals help promote their utilization and effectiveness.

Although ABIOMED‘s significant international presence broadens customer base among other positives, fluctuations in currency exchange rates can adversely impact the company’s international sales. With Europe as a strong base for the company’s growing business opportunities, sluggishness in the European economy is likely to mar revenues and earnings.

Of the other major headwinds, ABIOMED is likely to face increasing pricing pressure due to growing competition in its key markets from players like Luminex Corporation (NASDAQ:LMNX) , Cogentix Medical Inc (NASDAQ:CGNT) and EnteroMedics Inc (NASDAQ:ETRM) . We expect this to hurt margins in the near term. Moreover, continued investments will drag profitability.

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