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Leading cardiac assist devices maker Abiomed’s (ABMD - Analyst Report) third-quarter fiscal 2012 adjusted (excluding one-time items other than stock-based compensation expenses) earnings per share of 6 cents outstripped the Zacks Consensus Estimate of a loss of 1 cent.

On a reported basis, the Massachusetts-based company swung to a profit in the quarter as it saw robust sales for its popular Impella cardiac pumps (including Impella 2.5 and 5.0). The Impella pumps are used for the support of acute pre-shock patients or for prophylactic support of patients undergoing high-risk percutaneous coronary intervention.

Abiomed registered a profit of $2.9 million (or 7 cents a share) in the quarter versus a loss of $0.8 million (or 2 cents a share). The overwhelming results pushed up the company’s shares by roughly 14% to touch a new 52-week high of $21.92 on February 3.

Revenues & Margins

Abiomed clocked record sales in the quarter which soared 18% year over year to $32.2 million, paced by solid double-digit growth in its Impella business. Sales came ahead of the Zacks Consensus Estimate of $30 million. Revenues in the U.S. and international markets surged 17% and 37%, respectively, in the quarter.

Globally, Impella sales cruised 31% year over year to $27.7 million. U.S. Impella sales spiked 30% to $25.5 million. Abiomed opened 37 new U.S. Impella 2.5 sites in the third quarter (versus 29 sites a year ago) to end the quarter with 605 customer sites.

Gross margin edged up to 80.5% from 80% a year ago. Total costs and expenses rose 7% year over year to roughly $30 million.

Balance Sheet

Abiomed exited the quarter with cash equivalents and short-term marketable securities of $60.8 million, up 14.5% sequentially, with no debt.

Guidance Raised

Abiomed has raised the bottom end its revenue guidance for fiscal 2012 based on solid year-to-date revenues and its current expectations. The company now expects sales in the range of $122 million to $125 million compared with its earlier view of $120 million to $125 million. The current corresponding Zacks Consensus Estimate is $119 million.

Abiomed is enjoying strong demand for its Impella products. Impella utilization continues to grow at a healthy pace as borne out by the increasing number of patients being treated with the device.

The company, in late 2011, unveiled its multi-year growth initiatives at its annual investor day in New York City. Abiomed, at the meet, discussed new clinical and economic data from the PROTECT II study, which was presented at the Transcatheter Cardiovascular Therapeutics (“TCT”) conference in November 2011. The results demonstrated improved outcomes in patients undergoing extensive revascularization with Impella support.

Moreover, Abiomed announced the successful first human use of its new Symphony synchronized heart pump. The device, which was announced at the American Heart Association (“AHA”) 2011 scientific sessions in November 2011, is geared to treat New York Heart Association (“NYHA”) class III chronic heart failure patients.

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.

While we are upbeat about the prospects of Impella, 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 - Analyst Report). Currently, we have an Outperform recommendation on Abiomed, which is backed by a short-term Zacks #1 Rank (Strong Buy).

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