ABIOMED INC

In January 2019, we proactively sent physicians who use Impella RP post-approval study data that provides additional evidence of the benefits of following proper protocols for placement of Impella RP such as early placement and following proper inclusion and exclusion criteria when selecting patients for Impella RP. In February 2019, the FDA released a letter to health care providers on the Impella RP heart pump reiterating to physicians to follow proper protocols for the use of Impella RP. In March 2019, we presented survival data from the 18-month post-approval study of 42 Impella RP patients at the American College of Cardiology’s Annual Scientific Session. This interim post-approval study data showed an improved survival rate for cardiogenic shock patients who followed the Recover Right protocol, which are patients who met the inclusion and exclusion criteria of the Recover Right FDA PMA trial, when compared to salvage patients outside the Recover Right protocol (>48 hours in cardiogenic shock from right side failure). In May 2019, the FDA issued an update to its February 2019 letter to inform the health care community of these interim post-approval study results which validated that the Impella RP heart pump is safe and effective for the treatment of right heart failure. The data showed a 64% survival rate and 90% heart recovery for the subgroup of PAS patients who met the enrollment criteria of Impella RP’s premarket clinical studies. Impella RP is the most studied right-sided device and the only percutaneous technology with FDA approval designating it as safe and effective for right heart support.

In August 2018, CMS released final Medicare payment levels for CMS fiscal year 2019 (October 1, 2018 through September 30, 2019) under the Inpatient Prospective Payment System, or IPPS. Prior to October 1, 2018, Impella heart pump related procedures were previously assigned to Medical Severity Diagnosis Related Groups, or MS-DRGs 216-221 for assistance in the catheterization lab only. Effective October 1, 2018, the Impella heart pump uni-ventricular implantation is to be coded to MS-DRG 215, Other Heart Assist Systems Implant. CMS also eliminated the originally proposed reduction of 24% and concluded there would be no reduction versus the prior year for MS-DRG 215. The final rule on this topic, or the Final Rule, is effective for the year beginning October 1, 2018 for all Medicare hospital inpatient discharges. The Final Rule also maintains open and bi-ventricular Impella heart pump insertion with removal in MS-DRGs 1-2, the reimbursement rates of which were increased by 5%. Additionally, the reimbursement rates for MS-DRGs 268-269, covering Impella heart pump hospital transfer and support for the receiving hospital, were increased by 4%.

Development of our product candidates and/or regulatory approval may be delayed for reasons beyond our control. For example, over the last several years the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, CMS and the SEC, have had to furlough their government employees and stop critical activities. If a prolonged government shutdown or budget sequestration occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, in our operations as a public company, future government shutdowns could impact our ability to communicate with the SEC on various topics, such as shareholder proposals, or to have our registration statements declared effective, which could affect our ability to access the capital markets quickly.

The economic effects of “Brexit” may affect relationships with existing and future customers and could have an adverse impact on our business and operating results. 

On June 23, 2016, the United Kingdom, or the U.K., held a referendum in which voters approved an exit from the E.U., commonly referred to as “Brexit.” While the U.K. and the E.U. were expected to reach an agreement by March 2019, political changes in the U.K. following the “Brexit” referendum and other factors leave it unclear when exactly the U.K. will exit and on what terms. The impact on us from Brexit will depend, in part, on the outcome of tariff, trade, regulatory and other negotiations. Because this is an unprecedented event, it is unclear what long-term economic, financial, trade and legal implications the withdrawal of the U.K. from the E.U. would have and how such withdrawal would affect the regulation applicable to our business globally and specifically in the region.

As a result of Brexit, the global markets and currencies have been adversely impacted, including a decline in the value of the British pound as compared to the U.S. dollar. A potential devaluation of the local currencies of our international buyers relative to the U.S. dollar may impair the purchasing power of our international buyers and could cause international buyers to decrease their participation in our marketplaces or use of our products. Further, volatility in exchange rates resulting from Brexit is expected to continue in the short term as the U.K. negotiates its exit from the E.U. We translate sales and other results of our activities in the U.K. denominated in British pounds into U.S. dollars for our financial statements. During periods of a strengthening dollar, our reported international sales and earnings could be reduced because foreign currencies may translate into fewer U.S. dollars. Finally, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the U.K. determines which E.U. laws to replace or replicate, and those laws and regulations may be cumbersome, difficult or costly in terms of compliance. Any of these effects of Brexit, among others, could adversely affect our business, financial condition, operating results and cash flows.