SalemNews.com, Salem, MA

Local News

November 2, 2012

Abiomed marketing is facing scrutiny

U.S. Attorney's Office investigating labeling of Impella heart pump

DANVERS — Abiomed, a maker of what it says is the world’s smallest heart pump and other circulatory support devices, said yesterday that the U.S. Attorney’s Office for the District of Columbia is investigating the company’s marketing and labeling of its Impella 2.5 heart pump.

The medical device company’s stock price appeared as if it was in need of a defibrillator as shares plunged by $6.20 as of 4 p.m., off more than 31 percent from the $19.82-a-share close the day before. At the same time, the company reported strong jumps in both revenues and earnings.

The company was informed about the investigation on Oct. 26. The heart pump is small enough to be contained at the end of a catheter. The tiny pump can be inserted into the heart’s left ventricle to assist with a patient’s circulation.

Yesterday, the company said it accepted service of a Health Insurance Portability and Accountability Act administrative subpoena related to the investigation.

“The subpoena seeks documents related to the Impella 2.5, and we understand the investigation focuses primarily on marketing and labeling issues,” the company said in a statement.

The company also reported a healthy 27 percent jump in second-quarter fiscal 2013 revenues of $37.4 million, up from $29.5 million during the same period last year. The company’s fiscal year begins April 1.

Abiomed reported second-quarter net income of $5.5 million, or 13 cents a share, compared with earnings of $600,000 or 2 cents a share in the company’s second quarter of last year. Much of that second-quarter revenue came from its Impella products, with worldwide revenue for the tiny heart pumps totaling $32.8 million.

“An additional 30 hospitals purchased Impella 2.5 during the quarter,” Abiomed’s statement said, “bringing the total to 695 U.S. Impella customer sites.”

Spokeswoman Aimee Maillett said yesterday that the company had no further information on the investigation.

Staff writer Ethan Forman can be reached at 978-338-2673, by email at eforman@salemnews.com or on Twitter at @DanverSalemNews.

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