In the last quarter of fiscal 2017, Abiomed (ABMD) reported international market revenue of nearly $10.7 million, a year-over-year (or YoY) rise of ~58%. Impella’s revenue in Germany rose at an even faster rate of 63% YoY.
The company is mainly focused on expanding Impella’s presence in the protected percutaneous coronary intervention (or PCI) indication for cardiogenic shock patients in Germany. Currently, PCI patients account for ~30% of the people treated with Impella devices.
Abiomed has invested significant resources and deployed staff to leverage its growth opportunity in Germany. Improving reimbursement conditions have also helped boost demand for Impella devices.
These international market trends could help boost Abiomed’s share price as well as the price of the iShares Russell Mid-Cap Growth ETF (IWP). Abiomed makes up ~0.21% of IWP’s total portfolio holdings.
The diagram above shows Abiomed’s growth strategy across devices, indications, and markets. The effective implementation of this strategy will enable the company to pose strong competition to cardiovascular players such as Abbott Laboratories (ABT), Medtronic (MDT), and Johnson & Johnson (JNJ).
Japan’s market trends
On September 27, 2016, Abiomed’s Impella 2.5 and Impella 5.0 devices secured Pharmaceuticals and Medical Devices Agency (or PMDA) approval from the Japanese Ministry of Health, Labor & Welfare as ventricular assistance devices to be used to support blood circulation in patients with drug-resistant acute heart failure.
Despite Japan’s being the second-largest medical technology market, there’s limited demand for sternotomies and heart transplants in the country. Instead, heart recovery is preferred, so there’s a significant number of high-risk patients requiring hemodynamic support for complete revascularization.
For this reason, there’s robust demand for Impella devices in cath labs and electrophysiology labs in Japan. Abiomed has initially planned to place Impella devices at ten sites with established protocols. These sites are expected to act like training centers, enabling Abiomed to gradually expand Impella’s presence across 200–300 hospitals in Japan.