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Cardiac assist devices maker Abiomed (ABMD - Analyst Report) ended fiscal 2011 on a positive note as its results beat expectations in the fourth quarter. The company’s adjusted (excluding one-time items other than stock-based compensation expenses) net loss per share of 4 cents was lower than the Zacks Consensus Estimate of a loss of 5 cents.

For the full year, adjusted net loss of 27 cents a share also beat the Zacks Consensus Estimate of a loss of 32 cents.

However, on a reported basis, the Massachusetts-based company incurred a loss of $1.8 million (or 5 cents a share) in the fourth quarter compared with a profit of roughly $1 million (or 3 cents a share) a year ago.

The prior-year quarter’s results were boosted by gains on divestiture of the company’s stake in ventricular assist devices maker World Heart Corp . Moreover, the bottom line in the reported quarter was dragged down by higher sales and marketing costs.

For fiscal 2011, losses narrowed to $11.8 million (or 32 cents per share) from $19 million (or 52 cents a share) on the heels of healthy contributions from the company’s popular Impella cardiac pumps.

Revenues & Margins

Revenues surged 24% year over year in the fourth quarter to $28.5 million, beating the Zacks Consensus Estimate of $28 million. The solid growth was fueled by higher sales of Impella systems (including Impella 2.5 and 5.0), which are used for the support of acute pre-shock patients or for prophylactic support of patients undergoing high-risk percutaneous coronary intervention.

For the fiscal year, sales shot up 18% to $101.2 million, also ahead of the Zacks Consensus Estimate of $100 million.

Global Impella revenues zoomed 34% year over year in the quarter to $22.4 million driven by strong traction of the device. Roughly 769 commercial patients in the U.S. were treated with these devices during the quarter, a 41% annualized growth. Cumulatively, around 5,000 patients have been reportedly treated with Impella since its launch in 2008.  

Impella reorders in the U.S. jumped 39% in the fourth quarter and 82% in fiscal 2011. Abiomed opened 28 new U.S. Impella 2.5 sites in the quarter compared with 21 new sites in the prior year.

Abiomed’s legacy non-Impella business continues to shrink with revenues falling 2% to $6.1 million. Gross margin improved to 80% from 73% a year-ago on the back of solid sales. 

Balance Sheet and Cash Flow

Abiomed exited fiscal 2011, cash equivalents and short-term marketable securities of $60.3 million, up 3% year over year, with no debt. The company generated $1.6 million in cash from operation during the year.


Moving ahead, the company envisions total revenue for fiscal 2012 in the range of $120 million to $125 million, a 20%-24% year over year increase. The current corresponding Zacks Consensus Estimate is $120 million. Impella sales are expected to increase roughly 20%-35%, which underscore strong demand trend for the device. However, non-Impella sales have been forecast to trim roughly 25% in 2012.

Abiomed is enjoying solid demand for its Impella products. Impella utilization continues to grow at a healthy pace as manifested by the increasing number of patients being treated with the device. Gains from Impella continue to offset losses from the company’s hemorrhaging non-impella business. However, Abiomed still remains a loss-making entity and operates in an intensely competitive environment and faces significant reimbursement risk.

The company faces competition from organizations developing permanent heart assist products including Thoratec Corporation (THOR - Analyst Report). Currently, we have a Neutral recommendation on Abiomed.

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