Why I bought ABMD today

I posted this at NPI board as well… but with a few edits.

I have been flirting with ABMD for well over a year but I finally pulled the trigger today after the dumb market reaction to the recent feasibility DTU trial released at AHA on Sunday.

There are several reasons why and many have commented on ABMD on many occasions here and at the NPI board. Let me discuss a few quickly and you can decide if the stock is right for you.

First, the price drop gave me a decent buying opportunity, not amazing but certainly a better buy with a 15% haircut. I’m not going to discuss valuation any more than that, I believe it to be irrelevant currently given the prospects for growth going forward in the next 2-3 years. Obviously, I will keep an eye on those metrics on a forward basis but I won’t be trimming based upon valuation metrics. FCF is + and has more than doubled over the last 12 months as have EPS. Revenue growth is quite impressive as well.

Second, the door to unload trial released at AHA on Sunday. This was a good trial for the Impella. The Jeffries analyst has no idea what he is talking about. I don’t even understand why they commented on it. It was a 100 patient 1:1 randomized trial of standard of care angioplasty for an acute myocardial infarction (heart attack for the laymen out there) with cardiogenic shock (shock due to poor cardiac pump function) vs. placing an Impella first to “unload” the heart for 30 minutes and then proceeding with angioplasty. The theory here is that reperfusion injury of the heart muscle is a major reason why hearts do poorly even after restoration of blood flow to the muscle. Theoretically, reperfusion injury can be lessened by making the heart do less work during and after the heart attack by placing the Impella initially. This effectively “offloads” the left ventricle (main cardiac pumping chamber) and allows it to, well, rest for lack of a better term. You have to understand this is completely out of the box thinking. Cardiologists have been trained our entire careers to get these patients to the Cath lab as fast as possible and restore blood flow to the infarct related artery ASAP (preferably under 90 minutes). Now we are going to wait? Crazy right?

So what, the trial didn’t show much. Wrong. The trial showed the one thing they wanted it to and that was safety. Is it safe to wait while the Impella does it’s thing? That question is now answered, absolutely. This trial showed that waiting did not worsen outcomes and actually decreased infarct size of the heart muscle compared with angioplasty/stenting alone. Understand… this is a small trial, but it is very exciting and our institution is trying to become involved with the larger follow up national study.

Third, I am putting more of these devices in every month. They save lives. I put more in last week than I did in the prior 2 months.

Fourth, new clinical data was released recently that showed patients have less renal failure after high risk angioplasty when an Impella is used vs. not using one. This is not randomized data but it showed a compelling near 60% reduction in the incidence of renal failure post procedure. For those who do not know, the contrast used during angioplasty is toxic to the kidneys in high doses, especially in diabetics and those with chronic renal failure. Also, all the data in the history of angioplasty has shown that renal failure post procedure is a huge predictor of mortality. This is an amazing data point that hasn’t been discussed much in the medical or lay press.

Fifth, they have some very cool stuff coming out in the next 1-2 years that will expand their TAM and market share. I am not at liberty to share but it has allayed a lot of my concerns about future competitors.

Finally, patents. Abiomed has all the patents for this tech and it is why there are no competitors out there currently. A startup would have to spend a ton of money to get in this space and much more than that to compete. Competition is a long way off.

Oh, one more. I don’t usually invest in things I use. Too much selection and confirmation bias and I was afraid this would burn me. I also didn’t want even a hint of putting one in for personal gain, even subconsciously. However, the totality of the evidence is now too great to ignore. The Impella is an impressive, life saving device that is here to stay. The company is very well run with sales reps that know their stuff. Abiomed is constantly evolving. Management doesn’t stay content with their current tech believing that their devices can get even better.

Hope this was useful.



Glad to have the company, Doc. So many are quick to sue a company that makes a false statement, maybe it’s time to turn the wheel and sue analysts. Oh, that’s right, there are no licensing or testing functions required to become an analyst. Never mind.

Doc, ABMD does have great stats, I agree. The thing that is hard to be patient with for me, is the growth rate. Even though it’s a healthy rate for sure, I believe that another company with this product could blow away their numbers, but ABMD is so careful and cautious, focusing on quality outcomes almost to the extent of forgetting about profits. Of course the good side of that is that they will be unlikely to have truly adverse reactions from patients. Still, they take baby steps. Part of the med game, I guess. But their conf calls make me feel like they are holding back orders and limiting them to certain countries, one at a time.

I like the way you waited for the price. I admit I never thought it would get this low again. Good luck. I should buy more. In fact, I gotta go now …

long ABMD & HeartMD


This was beyond helpful. I have also heard similar comments from a friend of mine who is an Intervention Cardiologist. I started a small position last year.




great post I am into ABMD for a while and have been accumulating. I also have written on ABMD in some other articles. I think this would be like an IARG in the next decae

Would like to ask you a few questions offline if you permit though not sure how that can be posted since that feature seems to have disappeared.




Just reply to the post and at the bottom of the page uncheck the box: Post this Reply to the Boards and check the box: E-mail this reply to the Author.


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Great post MC.

For those interested in the “very cool stuff coming out in the next 1-2 years”, here’s some info that I was able to get from the company when I visited and got to interview management:




HeartMD, thanks for taking the time to post. This is my biggest holding (not exactly intentionally, I just grabbed at the right time and for the right reasons) and with a chart that looks like this one (https://stockcharts.com/h-sc/ui?s=abmd), it’s been more than a little scary to keep holding, much less add. Half of my prior gains have evaporated, but I have a very high confidence and conviction, and lots of room for error still.

Not that I’m a purely technical trader, but it does look like there will be more downward pressure on the stock. ABMD has already sliced through the 50- and 200-day moving averages with vigor and looks pretty solidly like a double-bottom breakdown. I bet it tests the $280 level before recovering, and that assumes earnings is solid. If it’s not, the buying opportunities will open up even wider.

This is, though, one of those great companies that is really making a difference in the world, and I’d be happy to own more at any reasonable opportunity.


Anyone adding more?

ABMD is well below six month’s close, but still green for YTD.

Daily drops seem to be slowing…

(~~~-3% for today’s open)

Being overall ABMD off here ~~~25% hurts, but thinking of adding more…

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Anyone adding more?

I’ve actually restarted a position…

I was in back around $70-$80, I think a couple years ago now, rode it up to $140 when there was talk about a potential larger competitor coming into their market (don’t even remember who it was) and with the high valuation, I got out with my near double and didn’t look back.

Started looking at it again with the recent discussions here and when we had the large drop this last week from over $400 down to $330 I took the opportunity to take a position again. Added again today with it down another 10% from that level.

I really like this company and it’s future prospects…and I’m investing in a company that’s saving lives, how great is that.

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I’m going to add more. Bring it up to a 3-4% holding.


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I was in around the $50-70 range, held on up to the $400’s where I started trimming and re-deployed into other fast growth stocks. With the drop back to the $300 range, new safety study and HeartMD’s personal experience showing a strong push for expanded indications, I re-started a position.

Through no specific intent, I have a core holding of a relatively diverse set of companies – datacenter and consumer electronics (NVDA), SaaS (MDB), healthcare (ABMD), advertising (TTD), finance (SQ). You could call them all “tech” but other than the fact that they’re all using modern technology they essentially deal in divergent markets.


That’s a great article Brian. I hadn’t read it until now. A couple of edits for future articles though. It is an intra-aortic balloon pump, not “inter” and it is usually abbreviated IABP.

I really liked your Japan segment. I just want to expand upon that a little. The reason it is such a huge market is because of the Japanese culture. Many there believe that if you cut open the chest you could lose your soul (someone correct me if “soul” isn’t the correct word but that’s how I understand it). This had led to a very low surgical revascularization rate in that country. The Japanese, as a result, have been the pioneers in many respects for a lot of high risk coronary stenting procedures. Because of this, I believe Japan will become the second largest market behind the U.S. for ABMD.

I’m surprised Italy wasn’t mentioned in your article. I’m not sure where they are on ABMD’s priority list. They will be a large market as well with the likes of France and the UK.



Abbott acquired Thoratec when it bought St. Jude Medical last year. Last May, Abbott recalled nearly 29,000 controllers for the HeartMate II implantable heart pump after 26 patients died trying to change out the controllers on their own.

That I did not know, 26 patients died due to the (allegedly of course) Heartmate II controllers. That is just awful. No wonder why Abbott has not restarted this clinical trial. Jeepers!

ABMD has probably run its line on the large run up when Abbott originally pulled the product last year. But it does not appear that this Abbott product will ever again be a competitive threat. Even if they re-make the product they will have to start over in the eyes of the FDA and that will take years. During the interim period of time ABMD will have many years of safe use in the clinic and even more indicated uses to that any new product, to practically gain any marketshare will need to be far better, and even then it can take years of real world use for its safety profile to create confidence in hospitals and amongst doctors.

One can say Abbott has large contracts with these medical facilities. And yes, that I true. But no facility is simply going to take this new to market, many years after the fact, life saving product and just buy it in order to reduce the number of vendors it deals with. Not going to happen. Not after ABMD has the market to itself for multiple more years.

Originally the claim was that 1.9% of the devices failed when inserted in emergency situations, causing at least one death. Now we have the controller issue that is attributed to 26 deaths. I cannot see this product being worthwhile, as is, with all the liability hanging over their heads. And a newly redesigned product, again, to my understanding, will need to start from scratch with the FDA.

That leaves as potential competition to ABMD existing balloons and what other procedures are used, and any new alternative products, different from what ABMD offers, that may be substitutes. It is difficult to keep track of what might be out there that may treat the same issue but comes from a different perspective, so that it is an alternative substitute method. Either way, ABMD will have many years of clinical use before hand.

As I all medical investing, I can say interesting…but of course that is based on the misery of others. But you know what, an oncologist makes a living on the misery of others, and the oncologist does noble work. That is no reason not to be interested from an investor perspective.



It is an intra-aortic balloon pump, not “inter” and it is usually abbreviated IABP.

Nice catch. I named myself TMFtypeoh for a reason!

I agree that Japan is a huge opportunity. I didn’t know it was because of their religious beliefs that they shied away from open surgery. That’s great to know, and I think it was clear from my interview that they believed that Japan would be a HUGE market for them with “data, training, and time”.




What you describe is a procedure that can be performed with their little pump. Is that the correct understanding? Could making the heart ‘rest’ –that procedure- be done with other pump device? If that is the case what would ABiomed advantage aside from being the first to do this procedure?


Not HeartMD, and certainly know nothing close to him in regard, but your question tj is not a difficult one.

The answer is you either use Impella (ABMD) or an intra-aortic balloon.


It is my understanding (and that is all that is really required as an investor - and the numbers bear this out) that the Impella is superior, so much so, that the $25k price per procedure vs. $800 or so for the balloon, is considered to be cost-effective in regard to total cost of treatment when you take into account how quick a patient can be released from the hospital, readmissions, and complications.

As such, just the fact that a $25k product is considered at least as if not more cost-effective than an $800 product speaks volumes.

A bit of history of ABMD, they were responsible for creating an artificial heart. But that product became a commercial dead end. They then moved into what they are now, heart pump of minimal size.

The only other competitor is having so much trouble that it may not be worthwhile calling them competition anymore. Is there some other third party product coming at this from some other angle, I don’t know.

It does seem to be similar to an ISRG circumstance, but with somewhat more moderate growth rate. It does have recurring revenue as once you start using the product, you keep using it and you immediately replace your inventory.

The stock has taken a huge drubbing of late from its highs. Maybe justifiable. The valuation was about equal to the autonomous driving company that Intel bought (and Intel was utterly desperate so paid 30x or so forward revenues). ABMD is not that, thus such a price to sale may have been too much. However, given the competitive advantages one can see why it does have such a high multiple. It is not at around 13x forward revenues, valued about he same as ISRG is now, but growing 2-3x faster, with probably many years of such growth ahead.

It is a very impressive company in very many respects. Buying as an investment is another matter, as there are comparative aspects as well with other investments and valuation issues can play a role. So each to make their own determination. HeartMD is not wrong about the reasons why he has invested.



This October, a new paper titled Cardiac Shock Care Centers was published in JACC and reiterated the need for AMI shock protocols. The publication references multiple studies, including NCSI and IQ, and outlines a suggested shock care algorithm stating that the rapid initiation of mechanical circulatory support is paramount. This paper also addresses the IABP, intraortic balloon pump, stating that multiple trials have shown no survival benefit from the device and states that it is not recommended per their evidence based shock care pathway algorithm. As a reminder, the intraortic balloon pump is Class III or considered harmful for cardiogenic shock in European and Japanese guidelines.

The above is from their recent earnings call. This is just for cardiogenic shock, which is amongst many emergency heart indications. But one thing at a time. It is likely that there will be multiple such indications that have similar outcomes as studies are run over time.

Thus why ABMD is disrupting the market, still slowly, as they are at 3 to 9% penetration range in their markets. Perhaps 10% in their approved market in Germany. Tons of growth to go. But roll out can only go so fast as ABMD can provide training for hosptials and provide staffers to be in the procedure room as it is done (70% of Impella procedures have an Abiomed expert representative present in the procedure room).

Copare this to ISRG, where recently a patient died from a heart procedure using the DaVinci surgical instrument from a surgeon who was not properly trained on the device and (cannot recall for sure, but believe so) had no real world experience using it.

I am not real sure what ISRG could have done to have prevented this, but ABMD is still small enough that they take a very paternalistic approach to their product and they do not just sell to anyone prior to ABMD being comfortable doing so.

Anyways, some color on the intra-aortic balloon pump as it comares to the Impella from ABMD.

I am making no statement on buy it or not buy it. Valuatin si high, grwoth is higher than Pure’s but lower than the usualy conpany’s weusually follow here. But it is still more or less 30% plus or minus with what loks like years of such growth ahead in markets that larely have no competition. This is why I am interested. Being interestd doe snot mean one should buy there and then.




Here is the one issue that ABMD may face other than some sort of medical malpractice or internal fraud or such, and that is Medicare reimbursement rates.

The rates were cut last year, and are likely to be in the coming year.

Nevertheless, Leerink reaffirms ABMD’s monopoly, in an underserved market, in great need of this solution.

Share price is $13 billion market cap or so. As recently as this past April it was $286. If the market stays negative a further retrenchment is possible. Plenty of time to see if it happens or not. I do not know.

This is the not spoken of yet perpetual issue with ABMD and that is the reimbursement rate.


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