Is Abiomed (ABMD) on Its Way to Recovery Thanks to Several Recent Growth Drivers?By Carrie Williams
The medical implant device manufacturer Abiomed Inc. (NASDAQ: ABMD) currently seems to be on its path to a stellar recovery, after a nearly 39% tumble in its share prices from its 52-week peak last month. Triggered by the 18% surge in EPS and 35% revenue increase in its FQ2 results, the stock has pushed back by 20% within the past three weeks and is now steadily continuing its upward move.
This Friday, an analyst at Leerink Swann has also expressed their confidence in the sustainability of strong double-digit growth for ABMD, thanks to a number of near and long-term growth drivers for the company. The major positive drivers include the increasing penetration in the percutaneous coronary intervention (PCI) patients, expected surge in demand for ABMD’s ventricular assist device Impella for replacing the balloon pumps that are fitted in 60,000 to 80,000 patients annually for cardiogenic shock once physicians and hospitals are trained and brought up to speed, recent PMDA approval in Japan, as well as a strong pipeline consisting of ECP and improved Impella CP.
The higher flow Impella CP, Impella 2.5, was given PMA approval in the U.S. in April 2016. With this latest PMA approval, all Impella devices have received approval in cardiogenic shock and are now in 6 clinical guidelines. Impella 2.5 is expected to be launched in Japan in the late-CY2016/CY2017 timeframe after ABMD had received approval there last month.
ABMD is currently poised to aggressively market to as well as train the hospital’s heart team utilizing its broad clinical dataset and training capabilities. The ongoing launch of Impella in the U.S is anticipated to expand to 10,000+ patient with a PMA approval. Japan already has 35,000 patients are on balloon pumps while 15,000 patients are on extracorporeal membrane oxygenation (ECMO). The launch of Impella in Japan is expected to capitalize heavily from these the existing patients.
Once the current physician and site training for cardiogenic shock/CP gets completed, Abiomed’s high-risk PCI adoption momentum is expected to surge by more than 30% according to the firm’s analyst Danielle Antalffy. Antalffy has reiterated her Buy rating and a $140 price target on the stock, which is an upside of 23.45% from the current price of $113.41. According to TipRanks.com, Antalffy’s rating track-record consists of an average return per recommendation of 7.5% and a profitable ratings’ success rate of 56%.
The analysts’ overall consensus rating on ABMD is a Strong Buy with a $151.67 price target, which is a 33.74% upside from Friday’s close at $113.41.