- Abiomed has reported record revenue and raised its full-year outlook despite the quarter being affected by hospital staff shortages and bookended by COVID-19 waves.
- The heart support medtech attributed its ability to cope with the headwinds to changes in protocol. Notably, more high-risk percutaneous coronary intervention patients undergoing a procedure to open narrowed arteries were treated with a single-access approach that reduces the need for ICU beds. Analysts at BTIG called the update "an encouraging report during a tough earnings season." Still, Abiomed's stock has fallen about 6% since it reported earnings on Thursday.
- Omicron and hospital staffing hit sales in January, but Abiomed expects its numbers to rebound as the quarter progresses, prompting it to raise the bottom end of its full-year guidance range by $15 million. The company is currently facing a class I recall of its OXY-1 System, which is used to circulate and oxygenate blood during a surgery, affecting 42 units. The FDA said that the system can experience "a power interruption while in use, which disrupts therapy delivered to a patient on support. Disruption of therapy could lead to prolonged hypoxia."
A lot of forces were lined up against Abiomed in the third quarter of its financial year. The quarter began in October, when the delta wave was still putting pressure on hospitals, and ended with omicron driving U.S. COVID-19 cases to record levels in December. In between, hospitals were contending with staffing shortages that limited their ability to increase patient throughput.
Against that backdrop, Abiomed grew sales of its heart support devices by 13% to $261 million. The growth reflected increased demand for Abiomed’s line of Impella heart pumps both in the U.S. and overseas, where sales grew 12% and 16%, respectively.
Abiomed achieved the results by adapting to the COVID-19 environment. In the third quarter, 55% of high-risk PCI patients were treated with the single-access approach and recovered in non-ICU units. That compares to 4% of patients before the pandemic. With ICU beds at a premium during COVID-19 waves, the shift in approach has allowed hospitals to continue implanting Abiomed devices.
"We did adapt and find ways at hospitals not to have to put all our high-risk PCI patients in the CC or the ICU, versus the CCU or a step down or a hybrid," Abiomed CEO Mike Minogue said. "The hospitals are now prioritizing the resources, the labor shortages, into the patients that are the emergency patients at the ICU that are priorities for treatment. That tends to be some of our younger shock patients. So, that's what happened in December."
The omicron wave continued to rise after the end of Abiomed’s third quarter, with U.S. cases peaking around mid-January, and the resulting pressure on healthcare systems will affect the company’s next set of financial results.
"It wasn't so much just the COVID, it's the omicron impact, with the labor shortages, also impacted the nurses and doctors that are still there. So that caused a little bit of pullback on some of these procedural issues around either cath lab or surgical suite," Minogue said. "It's not to the level it was in October, relative to year-over-year. We're a little more comfortable year-over-year, but we also recognize that sequentially it did impact a little bit in January."
The pace of the recovery from the softness experienced in January will dictate where Abiomed lands on its full-year guidance range. At the low end of the range, Abiomed is assuming there will be sequential improvement in February but the main gains will arrive in March and potentially even early April. To hit the top end of its range, Abiomed will need to see sales rebound this month.
FDA last year granted breakthrough device privileges to Abiomed's Impella ECP expandable percutaneous heart pump. Abiomed is pitching the experimental device as the world's smallest heart pump and the first that is suitable for use with small bore access and closure techniques.