Abiomed Inc.’s (ABMD - Analyst Report) international expansion gets a boost with the medical product developer gaining the Japanese PMDA (Pharmaceuticals and Medical Devices Agency) approval for its Impella 2.5 and Impella 5.0 heart pumps.
The approved devices are catheter-styled blood pumps, designed for drug-resistant acute heart failure (cardiogenic shock). Notably, these percutaneous pumps are the only PMDA-approved percutaneous temporary ventricular support devices that are marked ‘safe and effective’ in Japan. The company is also scheduled to open an office in Tokyo and schedule an on-site training and certification program that includes ‘physician proctoring’.
Abiomed is scheduled to provide intensive care and support to the potential patients in Japan during the fourth quarter of fiscal 2017 with the latest product development. However, the approval is expected to prove accretive starting fiscal 2018.
Management is highly optimistic about the regulatory progress as it provides Impella hemodynamic support (an exclusive feature of the device) to heart failure patients, which is likely to fortify the company’s position in the heart pump markets. The nod also promises cost-effective treatment options which will help improve patient outcomes in the country.
Coming to share price movement, Abiomed rallied 1.9% to close at $129.19, justifying the development. In the coming quarters, Abiomed plans to carry out discussions for the regulatory review of Impella CP and Impella RP with the PMDA.
We note that, over the recent past, the company’s vital study STITCHES got published in the New England Journal of Medicine. The study demonstrates factors like lower mortality and improved outcomes associated with revascularization. The company also intends to expand its standard of care in Germany over the long haul.
We believe that the latest development will significantly enhance the company’s heart pumps portfolio and thus help the company tap into the opportunities in Japan.
Notably, Japan, the second largest medical device market in the world, is an important contributor to the Asia-Pacific cardiac-assist devices market. This market has an 8% share in the Global cardiac assist devices market and is estimated to reach a worth of $386.9 million by 2020, growing at a CAGR of 7.91%, a major positive for Abiomed.
Zacks Rank & Other Key Picks
Currently, Abiomed sports a Zacks Rank #1 (Strong Buy).
Other favorably ranked stocks in the broader medical sector include CryoLife Inc. (CRY - Snapshot Report) , IDEXX Laboratories Inc. (IDXX - Analyst Report) and Masimo Corporation (MASI - Analyst Report) . All the companies sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
CryoLife recorded an impressive year-to-date return of 65.7%, better than the S&P 500’s 5.6% over the same time frame. In fact, the company posted positive earnings surprises in the last four quarters, the average being 502.50%.
IDEXX represents a strong year-to-date return of 55.3%. The company also recorded a streak of positive earnings surprises over the last four quarters, at an average of 12.7%.
Masimo has an impressive long-term expected earnings growth rate of 15% and a solid year-to-date return of 43.6%.
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