J&J highlights Abiomed’s first year in 2023 medtech earnings

J&J highlights Abiomed’s first year in 2023 medtech earnings

In the first year after it put down $16.6 billion to purchase the miniature heart pump maker Abiomed, Johnson & Johnson MedTech has seen the acquisition begin to pay off more than many thought possible.

Worldwide operational sales across J&J’s medical device divisions grew 12.4% in 2023, excluding changes in international currencies, to top $30.4 billion in total revenue. Abiomed alone contributed 4.7%, the company reported in its latest earnings release, while sales of electrophysiology hardware, contact lenses and surgical wound closure products also had strong showings.

Abiomed’s performance to date has overtaken the company’s internal models and beaten out Wall Street analyst estimates made ahead of the deal’s closure in late December 2022, J&J CFO Joseph Wolk said on a call with investors.

The company said that, in the past 13 months, it has seen strong commercial adoption of Abiomed’s catheter-based Impella pumps, designed to be threaded into the heart’s chambers to help ease the workload on a damaged or weakened cardiac muscle.

That’s helped to boost J&J’s interventional solutions offerings by 49.8%. That portfolio, which posted $6.35 billion in 2023 sales, also houses cardiac mapping and ablation catheters for treating atrial fibrillation, in addition to a potentially stroke-reducing heart implant that J&J acquired through its $400 million purchase of Laminar late last year and which the company hopes could become a first-in-class product in a competitive market of devices for sealing off the heart’s left atrial appendage.

Abiomed’s pumps were subject to a handful of Class I FDA recall alerts in 2023, including one after four patient deaths were tied to collisions with other cardiovascular implants, such as a patient’s previous aortic valve replacement. The stent-like struts along the outer edge of a TAVR implant were found to enter the side of the Impella pump, shearing off its spinning impeller blades and causing parts of the device to fracture. No devices needed to be returned to the manufacturer, but the FDA urged surgeons to note updated instructions and make sure the pump is not spinning while it is being repositioned within the heart.

Another Class I recall last year for the Impella 5.5 concerned the potential leaking of sodium bicarbonate-based purge fluids, where low pressure could potentially cause the heart pump to stop working. The FDA also issued a warning letter to J&J and Abiomed last October regarding the need for a regulatory approval for the companies’ Impella Connect software-based monitoring and alarm system.

Elsewhere in J&J’s stable of medtech companies, surgery sales topped $10.03 billion. The 5.5% annual growth in that segment was driven in part by about a 12% gain in sales of biosurgery bloodstopper products, including Surgicel powder and Vistaseal fibrin glues and sealants.

Orthopedics sales clocked $8.94 billion in revenue for a 4.6% gain over the prior year, with growth in hips, knees and trauma. Last October, J&J said it would begin to exit “less-profitable” orthopedics markets through a two-year restructuring plan. The company said at the time that it expects the moves to cost between $700 million and $800 million by the end of 2025 as it slims down operations.

Meanwhile, vision-related sales increased 6.6% annually to $5.07 billion, linked to the Acuvue Oasys one-day line of contacts and J&J’s Tecnis surgical intraocular lenses.

As a whole, for the fourth quarter alone, J&J MedTech reported $7.67 billion in total revenue for a 13.4% gain. Adding in its pharmaceutical divisions, the company posted total worldwide annual sales of $85.16 billion, for a 7.4% increase over 2022, and a fourth-quarter haul of $21.4 billion, for a 7.2% gain.

Looking to 2024, J&J CEO Joaquin Duato said that electrophysiology could be a highlight, with a “number of tailwinds” heading into the year.

The company’s Biosense Webster division recently claimed an approval in Japan for its Varipulse pulsed field ablation system and last year garnered a groundbreaking FDA nod for the use of atrial fibrillation catheters without employing real-time X-ray fluoroscopy.

J&J also re-upped its previous financial projections for the 2024 calendar, aiming for between 5% and 6% growth, resulting in company-wide operational sales of between $88.2 billion and $89 billion.

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