ABIOMED (ABMD) Banks on Impella Platform, Competition Rife


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On Mar 12, we issued an updated research report on ABIOMED, Inc. ABMD , a leading medical product developer. The stock carries a Zacks Rank #3 (Hold). The company’s robust demand for the Impella product line has been the key growth catalyst. However, stiff competition adds to the woes.

Impella, ABIOMED’s flagship product line, has continued to be growth driver. Impella is the world’s smallest heart pump. It is a support system of percutaneous, catheter-based devices offering hemodynamic support to the heart. The platform reflected stellar performance in the third quarter.

The market is upbeat about ABIOMED’s flagship Impella 2.5 and Impella CP heart-pumps receiving Pre-Market Approval (PMA) from the FDA for expanded use. To note, the Impella support has already been integrated in hospitals throughout Germany and Japan.

Also, ABIOMED recently announced expanded FDA Pre-Market Approval (PMA) for its flagship Impella 2.5, Impella CP, Impella 5.0 and Impella LD heart pumps. 

In the past year, ABIOMED has returned 144.5% outperforming the S&P 500’s 18% gain over the same time frame. The current level is also better than the industry ‘s growth of  27.6%. 

Competition among treatment providers for heart-related diseases is intense and is subject to rapid technological change, and evolving industry requirements and standards. ABIOMED’s products compete with a temporary cardiac assist device from Throated, which was acquired by St. Jude. The company also faces stiff competition from organizations developing permanent heart assist products.

Of the other major headwinds, ABIOMED is likely to face increasing pricing pressure due to growing competitionin its key markets. Also, stretched valuation and currency fluctuations add to the woes.

Key Picks

A few better-ranked stocks in the broader medical sector are PerkinElmer PKI , Bio-Rad Laboratories BIO and athenahealth, Inc. ATHN .

PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2 (Buy).

Bio-Rad Laboratories sports a Zacks Rank of 1 (Strong Buy). You can see  the complete list of today’s Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 20%.

athenahealth is a Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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