Cardiac surgical device maker AtriCure Inc. (NSDQ:ATRC) has reported its first-ever profitable quarter as sales of its AtriClip device continue to climb.
The company’s fourth-quarter earnings were scant, $11,500, but still far exceeded the consensus analysts’ estimate of a loss of 8 cents per share. Revenue also exceeded analysts’ estimates, rising 19 percent to $16.4 million. Analysts had expected $15.5 million.
Those better-than-expected numbers sent AtriCure’s shares up more than 4 percent to $11.75 in late-morning trading.
The majority of the company’s revenue, $13.3 million, came from the U.S.
The AtriClip is a clip used during heart surgery to exclude the left atrial appendage. This exclusion helps protect atrial fibrillation patients from strokes. AtriClip sales in the quarter reached $1.3 million, up from $1 million in the prior quarter. The company received federal regulatory clearance to begin commercializing the device last summer.
CEO David Drachman pegged the AtriClip’s market potential at $200 million for use in open-heart surgery, and that market could grow significantly as the clip is adapted for minimally invasive and hybrid heart surgeries. The device has been selling for an average of more than $1,000, according to Drachman.
A number of factors are combining to give AtriCure momentum for the rest of 2011 and beyond, including several planned or already-initiated clinical trials, plans for new product introductions and a recent reorganization of the company’s sales territories.
One of those clinical trials, called DEEP AF, which involves a “hybrid” approach to treating persistent atrial fibrillation patients, also holds promise for AtriCure, according to a report from Roth Capital Partners. The procedure being evaluated in the study combines AtriCure’s minimally invasive surgical ablation devices with a catheter-based ablation system from BioSense Webster. The study has “the potential to validate a new treatment technique for an [atrial fibrillation] population that remains ostensibly underserved today,” according to the report released last month.
Drachman put the U.S. market potential for hybrid procedures at $2 billion.
The company is also moving ahead with a separate trial it calls “ABLATE,” which is a pivotal trial to support an open-heart atrial fibrillation indication for patients with persistent forms of atrial fibrillation. The trial involves the use of a radio frequency device to create scars, or ablations, on the heart to interrupt abnormal electrical impulses that cause atrial fibrillation. The company expects to receive U.S. Food and Drug Administration approval for the atrial fibrillation indication in 2012, Drachman said.
Also adding to the company’s momentum are recent acquisitions of cardiac device firms. ATS Medical Inc. was acquired by Medtronic Inc. (NYSE:MDT) for $370 million in April, and AGA Medical was acquired for $1.3 billion by St. Jude Medical Inc. (NYSE:BSX) in October. More recently, Boston Scientific Corp. (NYSE:STJ) purchased Atritech, which makes an atrial fibrillation device called the Watchman, in a deal that could be worth up to $375 million.