The Delta variant and hospital labor shortages had a significant impact on Abiomed’s most recently reported earnings. Although the Danvers, MA-based heart pump company met consensus expectations, it missed its own internal goal.
These two culprits wreaked havoc with revenues in the most recent reported quarter. As a result, the company has reduced sales guidance by $20 million.
“We believe Delta and hospital labor shortages had regional impacts beginning in August and continuing into September,” Abiomed chairman, president, and CEO Michael Minogue said according to a transcript from The Motley Fool. “As a result, only 75% of our U.S. regions grew year-over-year. For the 25% of the regions negatively impacted, we believe, based on prior experience, we will see recovery in those regions in the future. In Q2, the shortage of hospital staff, especially nursing, was a new dynamic that we had not experienced during the COVID pandemic.”
According to a transcript from The Motley Fool, Minogue said, “As a result, the Q2 revenue missed our internal July expectations. Overall, hospitals today are managing the treatment of the pandemic better, but Impella usage in the cath lab is still impacted by ICU capacity limitations. Hospital staffing shortages in the U.S. caused some health systems to reduce cardiac procedures or temporarily close facilities.”
Abiomed stands out because while the shift was mostly on diagnostics and a potential vaccine for the virus, the company was one of the first to win emergency use authorization for a device-related solution to help COVID-19 patients.
The company won EUA for the Impella RP heart pump to provide circulatory support for patients who develop right side ventricular failure in June of 2020. It would go on to win another EUA – this time for the left side, in August of 2020.
Marie Thibault, an analyst with BTIG, noted how the company has handled much of the uncertainty during the pandemic and how the guidance change was a bit shocking.
“Since Abiomed has weathered the pandemic relatively well over the past several quarters, we were a bit surprised by the guidance revision,” Thibault said in research notes. “This decision was based on the continued impact on procedure volumes observed in October and the shortage of critical staff at Impella hospitals. However, there are emerging signs of recovery (issues now affecting <20% of U.S. ABMD customers), and management does expect procedure volumes to improve. Underlying growth drivers like Impella 5.5 adoption, international expansion, and the extensive product pipeline remain intact.”