Abiomed (NSDQ:ABMD) shares clawed back some of the nearly 4% lost yesterday as investors reacted to a downgrade by analysts at Piper Jaffray.
The Danvers, Mass.-based medical device company’s stock fell from a $17.20-per-share close April 8 to end yesterday at $16.52 per share, a more than 3.9% decline. ABMD shares were trading at $16.98 apiece as of about 11 this morning, however, up 2.8%.
The Piper analysts said uncertainty around looming pre-market approval requirements for Abiomed’s flagship Impella heart pump from the FDA prompted their downgrade of Abiomed from a "neutral" rating to an "overweight" rating, maintaining its $18-per-share price target.
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"While we continue to see a host of positives, we believe the current valuation range balances FDA pathway risk against potential opportunities. Our biggest concern remains future FDA PMA requirements, which provide primarily indication risk and incremental clinical trial cost risk," the analysts wrote. "However, on the positive side we believe recent favorable reimbursement wins, and a growing product pipeline as well as the potential for movement into new markets such as Japan (by year end 2013), provide additional revenue opportunities, and should provide a floor for shares at current levels."
Late last year the FDA decided that devices like the Impella must undergo its more stringent PMA process, which usually requires clinical trials. Much depends on which indications the FDA approves for Impella, the analysts wrote, predicting nods for cardiogenic shock and prophylactic high-risk percutaneous coronary interventions during the 1st ½ of 2014.
"While we believe these outcomes are likely to be positive, uncertainty around the timing of potential indications, the cost of potential clinical trials (though we note incremental Protect II costs were only $1.5M per quarter), and the potential for negative outcomes will likely continue to weigh on the stock," they wrote.
Ishrak: Medtronic is a healthcare company, not a medical device maker
"We’ve been viewed and viewed ourselves as simply a device provider as opposed to a healthcare solution provider," Medtronic (NYSE:MDT) CEO Omar Ishrak told an audience at
the World Health Conference in Washington, D.C., this week.
The world’s largest pure-play medical device company has a history of innovation (founder Earl Bakken was 1 of the co-inventors of the pacemaker). But what it’s paid for today is used during a medical procedure whose value is only realized after it’s complete, much farther down the road. To leverage that procedure’s true value, Medtronic needs to analyze its impact on the entire healthcare ecosystem, Ishrak said.
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Thermo Fisher Bids $11B for LifeTech
Thermo Fisher (NYSE:TMO) met yesterday’s deadline for bids on Life Technologies Corp. (NSDQ:LIFE), beating out a raft of private equity firms who are still hoping to be in the hunt.
Waltham, Mass.-based Thermo Fisher’s offer is said to be more than $65 per share, putting the potential value of the deal above $11 billion.
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Urologix takes over manufacturing, sales of Prostiva from Medtronic
Urologix (NSDQ:ULGX) said it’s taking over sales and marketing of the Prostiva RF device from Medtronic, allowing it to market the treatment for benign prostatic hyperplasia, or enlarged prostate.
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Covidien prices debt offering for pharma spinout
Covidien (NYSE:COV) said it’s priced some $900 million worth of debt to fund the spinout of its Mallinckrodt pharmaceuticals arm, saying it’s placed the sale of the senior unsecured notes, expected to close April 11.
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Analysts’ ups and downs
- Abbott (NYSE:ABT): TheStreet Ratings reiterates hold rating, “C” ratings score.
- Abiomed (NSDQ:ABMD): Piper Jaffray downgrades from “overweight” to “neutral” rating, reiterates $18 price target.
- HeartWare International (NSDQ:HTWR): Sidoti initiates coverage with “neutral” rating
- Hologic (NSDQ:HOLX): Zacks reiterates “neutral” rating
- Insulet (NSDQ:PODD): Oppenheimer increases price target from $24 to $28
- Intuitive Surgical (NSDQ:ISRG): WallachBeth Capital initiates coverage with “buy” rating, $610 price target
- Johnson & Johnson (NYSE:JNJ): J.P. Morgan downgrades from “overweight” to Neutral rating, raises price target from $77 to $83.
- Unilife (NSDQ:UNIS): Leerink Swann reiterates “outperform” rating, $5-$6 price target, ups estimates on syringes contract.
