ABMD sudden drop

Had the same question. The stock was actually upgraded today. And, I don’t think that it is volatile in this way. This seems like a sudden mid day drop probably more typical of a low liquidity name. Something happened.

It looks to be this to this letter to Health Care Providers by FDS:

https://www.fda.gov/MedicalDevices/Safety/LetterstoHealthCar…

CMFBLSH
no position in ABMD

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Here is the reason for today’s drop…

https://seekingalpha.com/news/3429209-abiomed-6-percent-caut…

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Volume spike. So an institution or insider just moved a bunched of stock. Volume already 144% of average for last 50 day.

By the FDA, not FDS…typo

From the FDA’s letter to Health Care providers:

“data submitted by the firm [Abiomed] in January 2019 suggest that the high mortality rate observed in the PAS may be primarily related to differences in pre-implant characteristics of the PAS patients compared to the patients in the premarket clinical studies. Sixteen (16) of the 23 patients enrolled in the PAS would not have met the enrollment criteria for the premarket clinical studies . Specifically, before getting the Impella RP system implanted, patients in the PAS were more likely than the premarket clinical study patients to have been in cardiogenic shock for longer than 48 hours, experienced an in-hospital cardiac arrest, been treated with an intra-aortic balloon pump, or suffered a pre-implant hypoxic or ischemic neurologic event.”

https://www.fda.gov/MedicalDevices/Safety/LetterstoHealthCar…

So I’ll wait to hear from HeartMD on this one, or some true analysis on what this means longer term.

Is this a standard type FDA cover all the bases label, added info, or something much bigger.

Could this effect sales.

Not pulling the trigger and buying until I know more.

Thanks guys.

Chris

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At least with SaaS stocks you don’t have to worry about the FDA.

It appears that the device is being used on patients who were sicker than the patients used in the trial studies. Therefore it should not be surprising if real world results are not as good as they were in the trial.

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You don’t need to read far down the FDA letter to see this (bold is mine)…

Although the FDA is concerned about the high mortality rate from the interim PAS results, we believe that when the device is used for the currently approved indication in appropriately selected patients, the benefits of the Impella RP system continue to outweigh the risks. Our current analysis of these results and recommendations for health care providers who may use the Impella RP System follow below.

🆁🅶🅱
wordlessly watching, he waits by the window and wonders…

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Although the FDA is concerned about the high mortality rate from the interim PAS results, we believe that when the device is used for the currently approved indication in appropriately selected patients, the benefits of the Impella RP system continue to outweigh the risks. Our current analysis of these results and recommendations for health care providers who may use the Impella RP System follow below.

But Abiomed was of course hoping that surgeons would expand the usage to sicker patients and enlarge the TAM thereby. (how’s that for a sexy word?:grinning:) … This letter will restrict that expansion of the TAM, unfortunately.

Saul

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This letter will restrict that expansion of the TAM, unfortunately.

Do we know that for sure?

No, it’s obviously not as good as the trial results were, but what does that really mean? Did it work in 25% of these “sicker” patients, and fail in 75% of them? More? Less?

I don’t know what those numbers are, but even if it works in a smaller percentage, if the patient is going to die otherwise, I would think you’d want to take that chance if there’s a increased chance of success (which would increase the TAM anyway).

Again, definitely not my area of experience or expertise. Are doctors “allowed” to use it in these instances with this new FDA warning? All questions I don’t know the answers to…

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Ha! I guess I should do a little DD before posting…sorry for the premature questions.

From the FDA letter:

Interim results from the most recent PAS report, which reflect device use in a broader patient population, indicate that only 4 out of the 23 enrolled PAS patients (17.4 percent) met the primary survival endpoint.

I’d like to know what my survival chances were without the use of Impella, vs the 17% survival of this new “sicker” population.

mauser96
It appears that the device is being used on patients who were sicker than the patients used in the trial studies. Therefore it should not be surprising if real world results are not as good as they were in the trial.

I have the same interpretation here. MD’s, facing a situation where “this patient is so sick, there is nothing left to lose**, see if this might work”.

(**Doing nothing, this patient is going to be lost for certain.)

Perhaps (likely???) telling patient and family that they were treading into experimental territory! Posing the question: “Do you want to proceed?”

Clarification needed at the earliest; comments herein from HeartMD would be a definite plus.

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But Abiomed was of course hoping that surgeons would expand the usage to sicker patients and enlarge the TAM thereby. (how’s that for a sexy word?:grinning:) … This letter will restrict that expansion of the TAM, unfortunately.

I disagree Saul, there was never going to be a large TAM for the RP and I don’t think this says anything about expanding it’s use yet. We know practically nothing about what was going on with the patients who died. Also, what sample size do we have here? It’s very small and could just be a Type 2 error with lack of statistical power to say anything about the findings.

I have placed 2 RP’s. I think our institution has placed around 6-8 so far. 1 of my 2 died waiting for a heart transplant. He would have died sooner without it and not ever made it to the transplant list without the RP.

Bottom line for me is this:

  1. Very small sample size, we need more data… a lot more. We know next to nothing about this sample.
  2. These patient’s are very, very sick and their mortality is very high without intervention.
    3a. As you can see, despite having implanted what seems like a zillion 2.5 and CP Impella’s, I’ve only placed 2 RP’s. That gives you an idea of how many of these things ABMD is going to sell. It’s not a common need. The RP has very specific indications where it is lifesaving and if you follow those strictly, the results should be good for patient’s.
    3b. If you invested in ABMD for the RP, you should park your money elsewhere. That is not where the majority of this company’s TAM lies. It is in high risk PCI, cardiomyopathy recovery, and international expansion. IMO, the RP will never amount to more than 5-7% of ABMD’s growth long term (that might be generous).

Why do I say my investment in ABMD is mainly due to international expansion and high risk PCI? My thesis lies in the macro trends I have seen in cardiology over the last 10-15 years. I’ll give you a bit of a story.

When I was a 1st year cardiology fellow we would routinely perform 25-35 procedures in the Cath Lab per day where I trained. Drug eluting stents then came along and within about 2 years the Cath Lab volume dropped precipitously. Why? Because those stents were sooooooooo much better at preventing TLR. TLR is target lesion revascularization. Basically, this is where you have to retreat the same lesion again, usually due to in-stent restenosis within 1 year. This was about 30-40% of the Cath Lab volume. Now that number is about 10-15% of the Cath Lab volume… BUT, it is growing again. Why? Because restenosis occurs in drug eluting stents muuuuuuuuch later (but still not to the same degree as with bare stents). Also, all those bypass surgeries that were done in the 90’s and 2000’s… those guys/gals now need PCI. That number is growing as well. A lot of that PCI is high risk and requires Impella support. Cath Lab volume is now growing again thanks to this and percutaneous valvular disease treatment. These factors along with Europe, Japan and Australia is where I believe the growth for ABMD will be and is why I’m invested.

I kinda hope this news drops the price under 300 again. I’d pick up more shares there.

MC

7% long position in ABMD

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Digital gold. Thanks for chiming in, HeartMD, and I’m glad we weren’t misreading the letter.

I think even I might add to my already oversized position if it were to dip below $300 again…

I’m not sure we can totally dismiss the findings and FDA letter for ABMD.

It’s never good for Real World data to negatively diverge from trial data and RWE is gaining in its acceptance.

I believe the RP market was more than a 6-7% addition - if it is taken away then it will affect its potential. Not sure if any RP sales were being achieved off label but that could also be affected.

It is not good for practicing surgeons / cardiologists to start hearing and forming negative opinions about a product.

If Abiomed cannot take RP and it allows another solution to enter RP - it then could take RP and then move into PCI.

I’m not selling my core holding but I am reconsidering the topping back up of the tranche that I previously top sliced.

A

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I’m not sure we can totally dismiss the findings and FDA letter for ABMD.

It’s never good for Real World data to negatively diverge from trial data and RWE is gaining in its acceptance.

I believe the RP market was more than a 6-7% addition - if it is taken away then it will affect its potential. Not sure if any RP sales were being achieved off label but that could also be affected.

It is not good for practicing surgeons / cardiologists to start hearing and forming negative opinions about a product.

If Abiomed cannot take RP and it allows another solution to enter RP - it then could take RP and then move into PCI.

I’m not selling my core holding but I am reconsidering the topping back up of the tranche that I previously top sliced.

I’ll take these point by point as someone who uses the devices all of the time:

  1. Of course it’s not. However, do you know how few patients this represents in the world of cardiology? If someone came to me and told me that product X should or should not be used because of a 23 patient post market observational non-randomized study I might call them some not so nice things regarding their intelligence. That is ABSURD. Now, I am NOT saying this isn’t something to monitor. But given the marked divergence from the pre-market approval study’s findings and that only 4 of the patients met criteria to receive an RP based upon the original inclusion criteria, this is something to monitor and nothing more at this point. The findings are of little concern to me and that’s because I use it as it’s intended to be used. My hope is this is a wake up call to the users and they realize the importance of using this in the patient population originally intended. Some of these patient’s had anoxic brain injury according to the data… what? Why would you ever place one of these in a patient with a 95% chance of being brain dead? I question some of the implanters judgement… hopefully this letter corrects that problem.

  2. No it’s not. It’s just not. I would argue it will never be more than 5% of total revenue just because of statistics. There aren’t enough patients to ever generate enough revenue to be more than that. This is a complementary device that they need so that they offer complete hemodynamic support. That’s all it will ever be. I do 80-100 high risk PCI’s a year. I do about the same number of acute heart attacks yearly. (That’s a lot by the way) I see acute severe RV failure (RP’s indication) maybe 5-8 times a year. The numbers game will not allow the device to ever be more than 5% unless there is an imminent epidemic of RV failure I’m not aware of.

Some personal experience for you. Since the RP came to market, I have been performing more right heart catheterizations during acute MI’s to see if an RP is needed. You’re looking for the PAPI (pulmonary artery pulsatility index) to be under 1. It’s almost never under 1 in my experience so far. It’s an uncommon event. Now, we are not a transplant center so numbers will be higher at those institutions but the numbers are still small.

Just a reminder here… if the device is used off-label, it will not get reimbursed by CMS. Private insurance may also give providers the middle finger if they please as well. I’ve seen it happen more than once.

If this #2 section scares you… it shouldn’t. As I’ve stated, the RP just isn’t a big part of my investment thesis.

  1. Anyone who uses this device on a regular basis will not form negative opinions based upon this IF they read the letter and review the data. These devices save lives when used properly. RE-iterating my point above… this should give notice to the implanters to use it appropriately.

  2. There is no competition on the horizon… the horizon being at least 3 and probably 4 years.

MC
Long ABMD

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I tried to recommend the post above more than once. It deserves it, but TMF won’t let me. :slight_smile:

THANK YOU, HeartMD, for taking the time to feed us your very salient experience and continuing real-world experience with ABMD’s product offerings.

For the rest of you, yesterday was one of those short-lived opportunities to zig when everyone else wants to zag, if you’re well-educated in what you’re invested in. I was this close → [] to adding some even though I said I wasn’t because it’s already an oversized position, but waited to see what morning brought.

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Hi MC
Great post. I don’t particularly want to go through a point by point rebuttal at all however whilst I probably didn’t expand enough on the points I was making for the sake of fullness I would add a few here.

  1. Yes I am aware. I have worked in healthcare for 25 years. I work in the Real World Evidence industry. I am fully aware of what this number represents.
    However I am also all too familiar with:
    i) Initial negative data on a non statistically significant with an apparent non representative cohort growing into a larger body of significant negative data with the consequent backwash.
    ii) Non significant non representative data destroying a product altogether despite the massive positive clinical and real world profile and patient usage and I mean destroying products eventuating in their removal from market as well as competitively displaced with the help of either mass media or trade media

  2. It may or may not be - whether it is 5 or 10%, I’m not too concerned about the patient numbers and revenue potential however I am thinking of the analyst and investor community. I’m not talking about you and I who are bought into Abiomed and have held (I’ve been up 400% on this), however I’m talking about the investor community who have been activated in the last year with the additive potential of RP which was promised to add substantially more than 5-10% TAM in some reviews I meant. So no it might not affect the Abiomed future sales TAM but it might affect significantly the value that investors are putting on it as they were lured in by this indication.

Also - yes your point about CMS/Private insurance maybe true but it is frankly American centric. Other healthcare markets don’t work like that - for better for worse. And again - a lot of the potential investor lure and Abiomed rating points at international expansion which has been a disappointment beyond Germany and Japan.

Both the indication expansion and international expansion have also been linked to the case for Abiomed representing an M&A target which again not for you or me but for some in the investor community has potential to boost a rating or lower a rating depending on whether Abiomed is seen as in play. This news will not help its chances of an acquisition (which may not have been our thesis but certainly has been raised by some).

  1. Clinical experience is absolutely key but again I have seen negative RWE build and build and eventually deter new users then existing users.

Anyhow - I completely respect your input on this however I still see some potential risks and valuation challenges in this news.

Ant

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https://www.mddionline.com/fda-says-patient-selection-key-ab…

As per below excerpt, the size of the patient trial group is rather small. Stock getting a welcome little lift from these current lows in response to this news.

"FDA Says Patient Selection is Key to Abiomed Impella RP Safety

FDA urged doctors on Tuesday to read and follow the revised labeling for Abiomed’s Impella RP System, which includes a patient selection checklist to understand which patients may benefit most from treatment with the device. The benefits Abiomed’s Impella RP System outweigh the risks of the device, but only if it is used for the currently approved indication in appropriately selected patients, according to FDA’s latest letter about the device.

FDA said the latest interim results indicate a lower survival rate for the subgroup of post-approval study patients who would not have qualified for the premarket clinical studies compared to the premarket clinical study survival rate.

The agency reported that the most recent post-approval study report shows 12 out of the 42 patients (28.6%) survived to 30 days post device explant or hospital discharge, or to the start of longer-term therapy. In the premarket studies, the survival rate was 73.3% "