THE MISSION IS COMPELLING
Every year, tens of thousands of patients die when their hearts fail to pump sufficient blood to sustain life.
THE TECHNOLOGY IS CUTTING EDGE
ABIOMED introduced the first temporary artificial heart system in 1993. Our expertise in the cardiac support arena is unmatched throughout the world. ABIOMED's artificial heart, a total and permanent heart replacement, is on schedule to enter the clinic by the year 2000.
ABIOMED, Inc. (''ABIOMED'' or the ''Company'') is a leader in the research and development of cardiac assist and heart
replacement technology. The Company developed, manufactures and sells the BVS-5000 (''BVS''), a temporary cardiac assist device designed
to provide a patient's failing heart with full circulatory assistance while allowing the heart to rest, heal and recover its
function. The BVS is most frequently used in patients whose hearts fail to immediately recover function following heart surgery. The
BVS is the only device that can provide full circulatory assistance approved by the United States Food and Drug Administration
(''FDA'') as a bridge-to-recovery device for the treatment of patients with reversible heart failure.
The Company is developing a battery-powered totally implantable artificial heart (''TAH'') intended as a permanent
replacement device to assume the full pumping function of both the left and right ventricles of the heart. The TAH is designed for use
by patients with irreparably damaged hearts and at risk of death due to acute myocardial infarction (''AMI''), chronic ischemic
disease or some form of end-stage congestive heart failure, but whose vital organs otherwise remain viable. The Company is devoting
significant resources to accelerate the development of the TAH with the goal to initiate clinical trials of the TAH by the end of the
year 2000. There can be no assurance that the Company will be able to successfully complete pre-clinical testing of the TAH and
receive FDA approval to begin clinical trials of the TAH in a timely manner, if at all, or that any market will develop for the TAH.
The Company sells the BVS in the United States through direct sales and clinical support teams. Its sales force focuses on
sales to new customers, while its clinical support group focuses on training and educating existing customers in order to improve
clinical outcomes and increase BVS blood pump usage. The BVS is intended for use in any hospital performing open-chest cardiac
surgery, of which there are more than 900 in the United States. As of September 30, 1997, the BVS had been purchased by over 275
medical centers in the United States including many of the largest centers. The Company believes that its installed base of
customers provides an opportunity for reorders of the single-use BVS blood pumps as well as a reference base to assist in selling to
The Company's goal is to be a leader in the development, manufacture and marketing of mechanical cardiac assist and heart
replacement devices that address the varying needs of a wide range of patients. The Company is pursuing a variety of strategies to
pursue this objective, including accelerating the development of the TAH, increasing market penetration of the BVS, maintaining and
enhancing its technological leadership and pursuing strategic relationships to support its research and commercialization efforts.
There was another medical device being developed by the company with the acronym ICS. Trials turned out to be unsuccessful. It had a large possible market. It had nothing to do with the ongoing TAH development.
In this case, this company has been public for over a decade. Its first device, the bioventricular system (BVS), the only device of its type ever approved by the FDA was approved in November, 1992 and sales have been ramping up ever since. That's why this company is an oddity in the microcap market: it makes a profit.
To answer your general question, venture capital money is very expensive in many ways. Also, the venture capitalists generally demand control, something many entrepeneurs are loathe to give.
Turning back to ABMD, at this point, there is no way the venture capitalists will be able to get their hands on this company. It has erected a powerful poison pill barrier (sorry for mixing the metaphor there).
>This company is a very compelling long term buy if your time horizon is 3 to 5 years. However, it is very volatile and short term swings can be dramatic.<
Why would an emerging company go public, if it will be 3 to 5 years before it has any significant revenues. Said another way, wouldn't it make more sense to use venture capital instead of the public's money to finance the R&D? My instincts tell me that maybe the VCs passed on this and the public may have been easier to convince? If that's true, that's not a vote of confidence in favor of the company's future.
I don't mean to be disparaging and I have no specific knoweldge regarding this company; i.e., my question would apply to any company in a similar situation? I'm interested in your opinion.
This company is a very compelling long term buy if your time horizon is 3 to 5 years. However, it is very volatile and short term swings can be dramatic.
The company is working on a critical need - a total artificial heart that is battery operated and would allow the recipient to live a relatively normal life.
The market need for such a product is great. Management owns a significant portion of the equity, so the float is small. Human trials are projected by the company to be approximately 24 months off. If they go successfully, this company will grow exponentially. In the meantime, the company has a related device, the BVS that provides financial stability i.e. there is no present burn rate although that may change as the company ramps up its final testing of the TAH.
Since the Company's inception, United States government agencies, particularly the National Heart, Lung and Blood Institute
(''NHLBI''), have provided significant support to the Company's product development efforts. The Company seeks funding from third parties
to support its research and development programs and generally limits the use of its own funds until the scientific risk is
reduced. In addition, the Company intends to pursue collaborative relationships to develop and commercialize the Company's
non-cardiac assist technologies.
The Company's primary dental product (the "PerioTemp") is a device used for screening early periodontal disease through the measurement of small temperature differences around the pockets where teeth meet the gums.
The Company is in early stages of distribution of its cardiovascular product. Current emphasis has been on developing the U.S. market via a direct sales force. The BVS is marketed outside the U.S. through a third-party distribution network.
The Company's common stock is traded and listed on the Nasdaq National Market, under the symbol "ABMD". The Company conducts operations from facilities, located approximately 15 miles north of Boston on Route 128 in Danvers, Massachusetts.
The BVS 5000 Temporary Artificial Heart System
What is the BVS 5000?
The BVS 5000 is an external cardiac support system capable of completely supporting a patient's circulation. Sophisticated
automation makes the BVS extremely simple to use and allows clinical staff to focus their efforts on caring for the patient, not the
technology. The BVS delivers pulsatile flow to the vital organs, ensuring that these critical systems receive the perfusion necessary to
maintain function during the support period. Since becoming the first cardiac support system to gain FDA approval in 1992, the BVS
has rapidly established itself as the new standard of care for patients in ventricular failure. Open heart centers around the
world consider it the treatment of choice for profound, postcardiotomy ventricular failure.
The BVS 5000...
Designed to meet the specific needs of patients suffering profound ventricular failure. A life-saving alternative to current treatment therapies. More cost-effective than historical treatment options that are less effective. The only FDA-approved and reimbursable product for postcardiotomy support. Supported by a team of specialists dedicated to clinicians, their patients, and the BVS 5000.
How does the BVS 5000 compare to conventional therapies?
Traditionally, ventricular failure is treated with a combination of inotropic drugs and the intra-aortic balloon pump. While
this therapy has saved lives, its effectiveness is limited to patients who require only partial support and it is not sufficient
for patients in complete ventricular failure. Centrifugal pumps have also been used for cardiac support, despite their original
design for short-term use in the operating room. The non-pulsatile flow they produce severely restricts the time patients can
safely remain on support, and additional medical personnel are required to provide constant monitoring and ensure that the pump is
The BVS offers an alternative: life-saving support without the end-organ complications, expensive medical therapies, overuse of hospital resources, and extended hospital stays often caused by conventional approaches.
How does the BVS 5000 advance the standard of cardiac care?
(1) Unique dual-chamber blood pumps mimic the function of the natural heart, allowing continuous gravity drainage of the
heart and safe ventricular decompression. (2) Pulsatile flow perfuses vital organs and tissues as nature intended. When organ
function is sustained, the heart has ample time and opportunity to recover, without costly complications. (3) BVS system flow and
rate automatically adjust as the patient's hemodynamic status changes, eliminating time-consuming management of the device and
the associated time and expense of extensive staff training.
How can the BVS 5000 reduce costs while improving outcomes?
The treatment of patients requiring more aggressive cardiac assist with intra-aortic balloon pumps or centrifugal pumps is
extremely costly. High costs are directly related to complications of end-organ dysfunction that result in expensive therapies, poor
utilization of hospital resources and long lengths of stay. By employing a therapy specifically designed to treat profound ventricular
failure, consumption of critical care resources can be reduced while outcomes are improved. The decision to purchase the BVS 5000
reallocates resources away from an ineffective method of treatment and toward definitive, state of the art care. The BVS 5000 provides
patients with the best chance for survival and recovery, while helping hospitals attain the important goal of reducing or containing