No. of Recommendations: 19
Thanks for the info Brian.

First off the old tech is an Intraaortic balloon pump (I usually see it abbreviated IABP). A balloon that inflates and deflates in the aorta to provide circulatory support via changes in volume. The Impella actually sucks blood out of the heart and pumps blood into the aorta. Both are connected to a plastic catheter that enters through an artery. So you don't get it implanted and get up and leave the hospital -- you still have a tube in a major artery. In protected PCI it is just left in place during the procedure, in cardiogenic shock it is left in place until the heart can recover.

I wouldn't be too worried about the need for clinical support. I do a lot of procedures with dozens of devices (not the Impella). Sometimes, especially with big ticket items like Impella, the reps make themselves available even for routine cases. For the doctors it's nice to have the person there but often not necessary. They are still kind of in a "land and expand" phase and are trying to make Impella the standard of care for high risk PCI and shock. So they make themselves known, bring in new literature, make suggestions, etc. Sometimes they can provide suggestions (Dr. X will use it in this scenario or do this to make things easier). It also helps to have them in the room when the assistants (technologists or nurses) aren't as familiar with the device. Point is, once a hospital is using a device frequently, the reps don't need to be there nearly as much. I have no doubt that the company can figure out the value of having availability vs. The cost of paying them.

The reorder rate I don't think is all that impressive. This isn't the kind of thing you just forget to order and use something else next time, or say "nah I didn't like that one don't order more". Once a department decides to use it the doctors expect it to be kept in adequate supply. Maybe the reps help a bit in reminding the techs to reorder or in saying they should stock more or less supply but for the most part it should be standard procedure to reorder.

As with others I think the valuation is getting a bit bubble-ish and I've already trimmed (keeping it at a 10% position). With their recurring revenue and lack of a true competitor (any competition would take years to develop) I don't see much of a downside risk. Some legislation limiting reimbursement for medical devices would hurt. Maybe stagnation as the revenue/earnings catch up to the price. But at 9% penetration, a goal of near 100% penetration, and a growing market (from population growth and international growth) I'm willing to watch it grow.
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