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Abiomed (ABMD) Beats Q1 Earnings & Revenues, Shares Up

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Shares of Abiomed Inc. gained for the second consecutive day on Aug 1, after the release of the company’s impressive first-quarter 2017 results. Shares rose 1.3% to close on $119.50, exhibiting a year-to-date return of 32.4%.

Abiomed reported earnings of 29 cents per share, which beat the Zacks Consensus Estimate by 7 cents and surged 45% from the year-ago quarter.

Revenues were up 40.3% year over year to almost $103 million, outpacing the Zacks Consensus Estimate of $96 million. The year-over-year upside was supported by robust performance by the Impella heart pump product line.

Quarter Details

Globally, Impella revenues grew a strong 42% to $97.8 million in the quarter. U.S. Impella revenues improved 41% to $89.6 million while outside the U.S., revenues shot up 61% at cc to $8.2 million.

In the U.S., Impella patient usage soared 40% driven by the growing adoption of protected PCI and emergent support.
 

Germany accounted for 74% of the international revenues and grew 117% on a year-over-year basis.

Patient utilization of protected PCI surged 38%, while emergent support grew 55% in the reported quarter. U.S. reorder rate grew 46% year over year to $85 million.

Worldwide-service revenues increased 7% to $4.5 million.

Abiomed revealed that an additional 27 hospitals purchased Impella 2.5 heart pumps during the quarter, taking the installed customer base to 1,066 sites. As part of Abiomed's continued Impella CP launch, 35 new hospitals purchased the device during the quarter, reaching the Impella CP U.S. site count to 861.
 

ABIOMED INC Price, Consensus and EPS Surprise

ABIOMED INC Price, Consensus and EPS Surprise | ABIOMED INC Quote

Abiomed noted that an additional 9 sites made initial purchases of Impella RP, bringing the total number of Impella RP U.S. sites to 89 at the end of the quarter. Abiomed also noted Impella 5.0 has been placed at 415 sites with a penetration rate of 30%.

Gross margin expanded 20 basis points (bps) to 85.4%, primarily led by favorable euro exchange rate, as well as strong product volume and yields.

Operating expenses, as a percentage of revenues, remained flat at 64.8%. Research & development (R&D) expense increased 130 bps, while selling, general & administrative (SG&A) expense decreased by the same degree in the reported quarter, thus neutralizing each other in the process.

The upside in R&D expenses was a result of continued investments in products and manufacturing technologies.

Operating margin expanded 10 bps on a year-over-year basis to 20.6%.

FDA Approval/Product Details

On Apr 7, 2016, Abiomed announced the receipt of the FDA pre-market approval (PMA) for Impella 2.5, Impella CP and Impella 5.0 heart pumps for treating patients who suffer cardiac shock after heart attack or heart surgery. Impella is now the only percutaneous hemodynamic support device that is FDA-approved safe and effective for this population. In the current indication, Impella devices will help the heart pump blood, allowing the left ventricle to rest while a surgeon performs the surgery.

In fiscal 2017, Abiomed plans to complete the Impella RP post-market study and file for a PMA approval in fiscal 2018. Meanwhile, Abiomed will continue its controlled Impella RP launch.

Abiomed expects Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) to give approval in the near term, and reimbursement approval in the second half. The company expects to launch the devices at selected top hospitals during the Oct 2016 quarter. Meanwhile, the company continues to build its local team, establish training capabilities, and plans to open 10 hospital sites by the fiscal-year end.

Guidance

Abiomed forecasts revenues in the range of $435 million to $445 million (up from $435 million to $445 million), up 32%--35% (previous guided range was 30%--35%) going above fiscal 2016 level.

Operating margin is forecasted in the band of 18% to 20%. Abiomed plans to add 10 employees per quarter to its commercial team throughout fiscal 2017.

Zacks Rank & Other Key Picks

Currently, Abiomed carries a Zacks Rank #2 (Buy).

Other favorably ranked stocks in the broader medical industry are Cepheid , Masimo Corp (MASI - Free Report) and Natus Medical . All the three stocks sport a Zacks Rank #1 (Strong Buy).

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