Lazard downgrades Abiomed on Impella reimbursement concerns
(Reuters) - Shares in medical device maker Abiomed Inc (ABMD.O) could remain under pressure due to concerns about any possible reimbursement issue with its Impella heart pump, said brokerage Lazard Capital Markets, and downgraded the stock to "neutral" from "buy."
Abiomed shares fell as much as 7 percent to $22.70 early Tuesday on the Nasdaq. They later recouped some losses to trade down at $22.90.
Although the company said it is not in knowledge of any reconsideration by the U.S. Centers for Medicare & Medicaid Services on reimbursement of the Impella device, risks of the same persist, Lazard analyst Sean Lavin wrote in the note.
The recent overhaul in the U.S. healthcare reimbursement procedure has led to a lot of uncertainty in the payment landscape of medical devices and spooked investors.
"Since the company had its best result ever and shares sold off slightly, it seems investors are not ready to let Abiomed's valuation move higher in light of reimbursement noise," Lavin wrote in the note.
Abiomed last week said it expects revenue from Impella to rise 30 percent in 2013.
Another risk could be if Impella was moved into a new diagnosis-related group, the analyst said. Classification into a new group could affect reimbursement rate of the device.
A rival medical device being developed by Pleasanton, California-based Thoratec Corp (THOR.O) -- named Percutaneous Heart Pump -- could further fuel investor concerns, said Lavin.
(Reporting by Zeba Siddiqui in Bangalore; Editing by Sriraj Kalluvila)
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