WEST CHESTER, Ohio — Despite several challenges in 2009– like a Department of Justice investigation and related whistle-blower lawsuit–AtriCure Inc. advanced toward profitability, added regulator approvals for its cardiac surgical ablation systems and developed new avenues of growth.
The company that makes devices to scar the heart to disrupt bad electrical signals, among other uses, lost $2.4Â million, or 16 cents a diluted share, during the fourth quarter. That was an improvement from a loss of $3.2 million, or 22 cents a diluted share, in the year-ago quarter.
For the year, AtriCure lost $16.5Â million, or $1.13 a diluted share, compared with a loss of $10.2 million, or 72 cents a diluted share, in 2008. Omitting one-time charges–like the $3.8 million settlement of Justice Department allegations over the company’s marketing practices–AtriCure had adjusted operating income of $1.6 million for the year, a $7.2 million improvement from 2008.
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Gross profit was $41.8 million and gross profit margin was 76.6 percent in 2009, about the same as a gross margin of 76.1 percent in 2008, the company said.
Revenue for the fourth quarter was $13.8 million, up 14 percent from $12.1 million a year ago, mostly because of growing European sales. For 2o09, AtriCure had revenue of $54.5 million, down 1 percent from $55.3 million in 2008.
In February, AtriCure Inc. agreed to pay the federal government $3.76 million to settle claims and a related lawsuit that the company promoted its surgical cardiac ablation devices for unapproved uses, namely, the treatment of atrial fibrillation, which is an abnormally fast heart rhythm. The company set aside the expected settlement amount in November.“Although 2009 was a challenging year, the men and women of AtriCure demonstrated their high level of commitment, skillfulness and resolve,” David J. Drachman, president and chief executive officer, said in his company’s earnings statement. “We successfully executed our strategic priorities of accelerating profitability, advancing FDA atrial fibrillation approvals and expanding our market-leading position through the development of new, innovative growth platforms.”
Last year, AtriCure got Food and Drug Administration approval to sell Cryo1, a disposable medical device that uses extreme cold to ablate the heart, in the United States. In Europe, the company got clearance to sell AtriClip, a device that attaches to the heart to keep blood from flowing into the left atrial appendage, a lower portion of the heart, during treatments to stop atrial fibrillation.
The device formally named the AtriClip Gillinov-Cosgrove Left Atrial Appendage Exclusion System after its inventors, Dr. Delos “Toby” Cosgrove, who is CEO of the Cleveland Clinic, and Dr. A. Marc Gillinov, a cardiac surgeon there, “represents a major product and clinical milestone,” Drachman told securities analysts in November.
Despite being introduced in the second half of 2009, AtriClip helped AtriCure to a 28 percent increase in international sales last year.
AtriCure had expected FDA approval to sell AtriClip by mid-year, however, Drachman told securities analysts during a conference call today that this approval likely would be delayed until the second half of the year. The FDA has assigned a new reviewer to the company’s AtriClip application and the regulatory agency is being more cautious about device approvals these days, he said.
However, his company’s ongoing clinical trial for using its Synergy Bipolar System to treat atrial fibrillation is causing buzz among operators of the nation’s top heart centers, Drachman told analysts. The centers’ hybrid operating rooms enable electrophysiologists and cardiac surgeons to do their parts in ablation procedures at the same time.
This “hybrid ablation” procedure “is now being performed routinely in key U.S. and European heart centers,” he said. As more hybrid operating rooms are built, more hybrid ablation procedures could be performed. As a result, “atrial fibrillation approval will be a major growth catalyst” for AtriCure, Drachman said.
“As we look forward to 2010, we are focused on capitalizing on our growth opportunities and we are confident that AtriCure is well positioned to deliver results for patients, physicians and shareholders,” he said in the release.
AtriCure shares were down nearly 2 percent to $5.26 in early afternoon trading Thursday on the Nasdaq Stock Market.
