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What: Shares in Abiomed jumped higher by more than 15% today following news that the FDA had given the company's Impella 2.5 blood pumping device a green light.
So What: The FDA approval of Abiomed's Impella 2.5 system for use in certain high risk coronary procedures, including stenting and angioplasty, marks another win for Abiomed, a heart disease device maker that saw its sales increase 34% in the past year thanks to rising use of its other Impella products.
During Abiomed's fiscal third quarter, the company's sales reached a record $62 million, allowing Abiomed to deliver third quarter GAAP net income per share of $0.30, up from $0.11 the year before. Of the $62 million in quarterly sales, $57 million came from the Impella product line, and $51.9 millioncame from the U.S. market.
Now What: The Impella 2.5 approval gives Abiomed another product that it can offer up to its growing list of clients. Last quarter, 931 sites were performing procedures using Abiomed devices, up from 910 sites in the prior quarter.
If the company can successfully market the device to these customers, any resulting sales will likely help bulk up the company's already healthy balance sheet, which, exiting last quarter, boasts $131.4 million in cash and no debt. The additional revenue also adds conviction to the company's guidance for sales to grow by 21% to 23% this year to between $223 million and $226 million and bolsters analysts expectations for EPS to grow from $0.49 in fiscal 2015 to $0.60 in fiscal 2016.
With 720,000 heart attacks occurring every year and both aging baby boomers and heart disease prevalence likely to increase the number of cardiovascular procedures annually, Abiomed's revenue opportunity suggests that this medical device stock is one that investors should watch closely.
The article Why Abiomed, Inc. is Soaring Higher Today originally appeared on Fool.com.
Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may or may not have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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