Investors punish Abiomed over Impella investigation news
Sales of Abiomed's ($ABMD) Impella heart pumps have continued to climb in recent years. But a federal investigation could place the product's reputation in jeopardy, and investors panicked at the news.
By 3:30 p.m. Thursday, Abiomed's stock dropped more than 30%, hitting $13.80 in high volume trading. It rebounded by about 10% in late morning trading Friday.
Abiomed disclosed the news in its fiscal 2013 second quarter results, acknowledging the investigation in a bullet point paragraph. According to the company, the U.S. Attorney's Office for the District of Columbia is investigating Abiomed's marketing and labeling for the Impella 2.5 product. The company disclosed as well that it received a Halloween administrative subpoena from the Health Insurance Portability and Accountability Act relating to the investigation, seeking document details relating to the product.
Abiomed said in its earnings statement that it "is in the process of responding to the subpoena and intends to cooperate fully." CEO Michael Minogue couldn't provide any more details in the company's investor call earlier today, MassDevice notes.
The downbeat news comes as Abiomed's fiscal 2013 second quarter produced banner numbers yet again. The company generated $37.4 million in revenue, a 27% jump from the $29.5 million in revenue reported during the fiscal 2012 second quarter. Net income reached $5.5 million, up from just $600,000 during the same period a year ago.
Abiomed credited global Impella revenue growth for the banner numbers. And in the U.S., it noted, 30 more hospitals purchased Impella 2.5 during the quarter, bringing the number of U.S. hospital customers to 695.
- read the earnings release
- here's MassHighTech's take
- and MassDevice's story
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