ABIOMED Plunges After Revealing Government Investigation; Stock Loses 33%
Medical equipment company ABIOMED (NASDAQ: ABMD) had a rough day Thursday. In afternoon trade, shares had fallen nearly 33 percent to $13.30 after the company revealed that U.S. attorneys are investigating the marketing and labeling of its Impella 2.5 system. Shares opened the day at $15.80 (after closing the previous session just below $20.00) and continued to trade lower.
The stock is now sitting near new 52-week lows and has broken through a number of key support levels. ABIOMED is a provider of mechanical circulatory support devices and the company offers a continuum of care in heart recovery to heart failure patients. After Thursday's big loss, ABMD is now down around 27 percent on the year.
The company said that it found out about the investigation on Friday after being informed by the U.S. Attorney's Office for the District of Columbia. On Wednesday, ABIOMED received a subpoena related to the investigation.
The Impella system is used during and after heart surgery in order to relieve heart failure. The product accounts for nearly all of the company's revenue. The U.S. Attorney's investigation was revealed along with the company's fiscal second-quarter earnings results.
For the second-quarter, ABIOMED's adjusted net income was $0.20 per share. This came in well ahead of Wall Street analysts' consensus EPS estimates of $0.09. Revenues were up 26.9 percent versus last year to $37.41 million. This was also ahead of consensus revenue estimates of $37.3 million.
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