Abiomed Annual Report 2017

← All annual reports

FY2017 Annual Report · Abiomed

Loading PDF…

2017
ANNUAL
REPORT

R E C O V E R I N G H E A R T S
A N D S A V I N G L I V E S

Recovering hearts and saving lives

is the founding principle and guiding

compass of our organization. This is

our highest recognition of success.

Recovering and preserving our

patients’ hearts enables

them to return home to their families

and enjoy an improved quality of life.

L E A D I N G I N
T E C H N O L O G Y A N D
I N N O V A T I O N

We are committed to providing

patients and health care providers

with the highest quality devices and

optimal cost-effective solutions.

We accomplish this through the

relentless exploration of new ideas

and approaches that allow us to

address new clinical challenges for

our customers and patients.

A
B

M
E
D

2
0

A
N

U
A
L

P
O
R

G R O W I N G
S H A R E H O L D E R V A L U E

Growing shareholder value rewards

our investors and helps to ensure the

company’s ﬁ nancial stability, allowing

for the continued pursuit of our

mission. Shareholder value is driven

by executing our goals and achieving

positive ﬁ nancial results. For

employees, growth of shareholder

value provides ﬁ nancial security

for our families and the pursuit of

happiness for our future.

S U S T A I N I N G A
W I N N I N G C U L T U R E

Patients First. Our patients and

customers are the motivation for

all that we do and achieving our

mission is dependent on their well-

being. We must always act with

integrity and honor and demand

the best of ourselves. We work

hard, have faith in each other,

and have fun celebrating patient

success stories.

Abiomed, Inc.
22 Cherry Hill Drive
Danvers, MA 01923 USA

Abiomed Europe GmbH
Neuenhofer Weg 3
52074 Aachen, Germany

Abiomed Japan

2-2-1 Nihonbashi-Muromachi,

Chuou-ku, Tokyo, 103-0022

THE FAMILIES OF
HEART RECOVERY

50302newcvr.indd c1

6/16/17 7:07 PM

FINANCIAL PERFORMANCE

F Y 2 0 1 7

$
4
4
5
+
3
5
%

$
3
2
9
+
4
3
%

$
2
3
0
+
2
5
%

$
1
8
3
+
1
6
%

$
1
5
8
+
2
5
%

$
2
7
7

$
2
1
3

$
1
4
6

$
1
1
8

$
8
8

TOTAL REVENUE
DOLLARS IN MILLIONS

NET CASH BALANCES*
DOLLARS IN MILLIONS

8
3
%

8
5
%

8
4
%

8
0
%

$
9
0
.
1

$
6
5
.
1

$
2
8
7

$
1
6
5 $
8
4

GROSS MARGIN

GAAP OPERATING INCOME

DOLLARS IN MILLIONS

* Net cash balances are deﬁ ned as total cash, short-term and long-term marketable securities, less any debt as of March 31 each year

O F FI C E S
Abiomed, Inc. 22 Cherry Hill Drive, Danvers, MA 01923, USA

Voice: 1 (978) 777-5410 Facsimile: 1 (978) 777-8411 Email: ir@Abiomed.com

S EN I O R M A N AG E M E N T

MICHAEL R. MINOGUE

Chairman, President and Chief Executive Ofﬁ cer

Abiomed Europe GmbH Neuenhofer Weg 3 52074 Aachen, Germany

Voice: +49 (241) 8860-0 Facsimile: +49 (241) 8860-111

Abiomed Japan 2-2-1 Nihonbashi-Muromachi, Chuou-ku, Tokyo, 103-0022

Voice: +81-3-4540-5600 Facsimile: +81-3-6740-1479

N A S DAQ G LO BA L M A R K E T
Trading symbol: ABMD

DAVID M. WEBER, PH.D.

Chief Operating Ofﬁ cer

WILLIAM J. BOLT

Senior Vice President, Global Quality, Regulatory and Clinical Operations

MICHAEL J. TOMSICEK

Vice President, Chief Financial Ofﬁ cer

ANDREW J. GREENFIELD

D I V I D EN DS
The Company has never paid any cash dividends on its capital stock

Vice President and General Manager, Global Marketing

MICHAEL G. HOWLEY

and does not plan to pay any cash dividends in the foreseeable

Vice President and General Manager, Global Sales

future. The current policy of the Company is to retain its cash flows

and any future earnings to finance future growth.

THORSTEN SIESS, PH.D.

Chief Technology Ofﬁ cer

AVA I L A B L E P U B L I C AT I O N S
The Company’s annual report is distributed regularly to stockholders.

SETH BILAZARIAN, M.D.

Chief Medical Ofﬁ cer

Additional publications are available to stockholders, including the

Company’s annual report on Form 10-K, and quarterly reports on

Form 10-Q, as filed with the Securities and Exchange Commission;

news releases issued by the Company; and brochures on specific

products. Such publications are available on our website at

www.Abiomed.com or by writing us at:

Abiomed, Inc. 22 Cherry Hill Drive, Danvers, MA 01923, USA

T R A N S F E R AG E N T A N D R EG I S T R A R
American Stock Transfer & Trust Company

6201 15th Avenue, Brooklyn, NY 11219 USA

I N D EP EN D ENT R EG I S T ER ED P U B L I C
ACCO U N TI N G FI R M
Deloitte & Touche LLP

200 Berkeley Street, Boston, MA 02116, USA

FAC TO R S T H AT M AY A F F EC T
F U T U R E R E S U LTS
Certain statements in this annual report, including statements made

STEPHEN C. MCEVOY

Vice President and General Counsel

KELLEY BOUCHER

Vice President, Human Resources

B OA R D O F D I R EC TO R S

MICHAEL R. MINOGUE (CHAIRMAN)

Abiomed President and Chief Executive Ofﬁ cer

DOROTHY E. PUHY (LEAD DIRECTOR)

Executive Vice President and Chief Operating Ofﬁ cer

Dana-Farber Cancer Institute, Inc.

JEANNINE M. RIVET

Executive Vice President, UnitedHealth Group

ERIC A. ROSE, M.D.

Executive Chairman, SIGA Technologies, Inc.

MARTIN P. SUTTER

Managing Director and Co-Founder of EW Healthcare Partners

in the letter to the stockholders, employees, customers and their

PAUL G. THOMAS

patients; narrative text; captions; and graphics, constitute “forward-

President, Chief Executive Ofﬁ cer and Founder, Roka Bioscience

looking statements,” such as statements regarding the Company’s

(Retired January 2017)

plans, objectives, expectations and intentions. These statements can

often be identiﬁ ed by the use of forward-looking terminology such as

“may,” “will,” “should,” “expect,” “anticipate,” “believe,” “plan,” “intend,”

CHRISTOPHER D. VAN GORDER

President and Chief Executive Ofﬁ cer, Scripps Health

“could,” “estimates,” “is being,” “goal,” “schedule” or other variations of

W. GERALD AUSTEN, M.D. (DIRECTOR EMERITUS)

these terms or comparable terminology. All forward-looking statements

Distinguished Professor of Surgery Harvard Medical School and

involve risks and uncertainties. The Company’s actual results may differ

the Massachusetts General Hospital

materially from those anticipated in these forward-looking statements

based upon a number of factors, including uncertainties associated with

development, testing and related regulatory approvals, potential future

losses, complex manufacturing, high-quality requirements, dependence

on limited sources of supply, competition, technological change,

government regulation, future capital needs, uncertainty of additional

All content in this document is for information purposes only and is not

intended to provide speciﬁ c instructions to hospitals or physicians on how

to bill for medical procedures. Hospitals and physicians should consult

appropriate insurers, including Medicare ﬁ scal intermediaries and carriers

for speciﬁ c coding, billing and payment levels. This document represents

ﬁ nancing, and other risks and challenges detailed in the Company’s ﬁ lings

no promise or guarantee by the Company, concerning medical necessity,

with the Securities and Exchange Commission, including the Annual

levels of payment, coding, billing or coverage issues.

Report ﬁ led on Form 10-K for the Company’s ﬁ scal year ended March 31,

2017. Readers are cautioned not to place undue reliance on any forward-

looking statements, which speak only as of the date of this annual report.

The Company undertakes no obligation to publicly release the results

of any revisions to these forward-looking statements that may be made

to reﬂ ect any changes in the Company’s expectations, or events or

Nothing in this document shall be construed to encourage or require

any health care provider or institution to provide inpatient, outpatient or

any other services to patients; to order any goods or services from the

Company; or otherwise to generate business for the Company. Customers

utilizing this information should not knowingly or intentionally conduct

circumstances that occur after the date of this annual report or to reﬂ ect

themselves in a manner so as to violate the prohibition against fraud and

the occurrence of unanticipated events.

abuse in connection with federal or state healthcare programs.

50302newcvr.indd c2

6/16/17 12:06 PM

IMPELLA® DEVICE PROGRESS

F Y 2 0 1 7

1
,
1
3
8

1
,
0
3
9

9
5
8

8
5
9

7
4
8

$
4
2
4
+
3
7
%

$
3
1
0
+
4
6
%

$
2
1
3
+
2
8
%

$
1
6
7
+
1
9
%

$
1
4
0
+
3
1
%

REVENUE
DOLLARS IN MILLIONS

IMPELLA 2.5® U.S. SITES

4
1
1

3
4
6

2
9
4

2
2
9

1
7
0

2
4
1

2
7
4

2
3
0

2
3
8

2
2
3

1
7
8

9
7

8
7

1
1
9

1
3
0

PUBLICATIONS

TOTAL ABIOMED PATENT
PORTFOLIO

PATENTS

PATENTS PENDING

A B I O M E D 1

50302neweds.indd c1

6/16/17 7:55 PM

DEAR SHAREHOLDERS,

These are exciting times at Abiomed and our

Some other highlights of the past year include:

patient stories about heart muscle recovery

continue to inspire us and accelerate the adoption

of Impella® heart pumps. Thank you to our

employees and dedicated customers for your

work to improve the standard of care and build

the Field of Heart Recovery.

Abiomed patient summit. Back: Rick McCormick, Jay Sanchez,
Tom Wakeling, Duane Ackerman, Buddy Chase, Abiomed CEO
Mike Minogue Front: Sonya Bow, Jara Herron, Loretta Miller,
Brenda Dively, Vickie Nemec

Abiomed had a robust ﬁ scal year 2017, generating

$445 million in revenue; a net increase of $116M,

or growth of 35%. Abiomed remains one of the

fastest growing GAAP proﬁ table medical device

companies. We continue to have a solid balance

sheet ending the year with a cash position of $277

million and no debt enhancing our ability to invest

in and defend our intellectual property of 274

patents with 241 pending. Impella technology has

been validated with multiple regulatory approvals,

more than 400 clinical publications and an

installed base of nearly 1,200 U.S. hospitals.

We also hit a signiﬁ cant milestone this year,

announcing that Abiomed has supported more

than 50,000 patients in the United States.

This reﬂ ects the growing clinical need for

• FDA designation as a therapy for heart recovery
and approval of left side Impella heart pumps
for the treatment of patients experiencing
cardiogenic shock following a heart attack
or open heart surgery.

• Expanded FDA approval of Impella CP® device

for use in high-risk percutaneous coronary
intervention (PCI).

• Japanese Ministry of Health approval for the

Impella 2.5® and Impella 5.0® heart pumps for
the treatment of acute heart failure.

• New, dedicated reimbursement codes in the
U.S. that provide four different ways to code
for Impella support.

• Increase of 35% in capacity and doubling of

our manufacturing footprint in both Danvers,
Massachusetts and Aachen, Germany.

We continue to execute our objectives and our
FY17 achievements enable us to enter FY18 with
incredible momentum.

Impella studies and data accompanying each
of our FDA approvals demonstrate that a high-risk
PCI supported with an Impella heart pump, known
as a Protected PCI, promotes quality of life with
an improved ejection fraction (EF) for patients
and cost-effectiveness for health systems.

Protect II FDA study

IMPELLA® REDUCES ADVERSE EVENTS
IN PROTECTED PCI

IABP N-211
IMPELLA 2.5 N-216

p=0.042

29%

REDUCTION
IN MACCE

TIME POST PROCEDURE (DAYS)
FDA RANDOMIZED CONTROLLED TRIAL PROTECT II

percutaneous hemodynamic support for heart

MACCE = DEATH, STROKE, MI, REPEAT REVASCULARIZATION

failure patients with limited treatment options.

Dangas et al, Am. Journ of Cardiol. 2014: 113(2):222-8

2 F Y 2 0 1 7 A N N U A L R E P O R T

50302neweds.indd c2

6/16/17 7:55 PM

Protected PCI Digital Community; the most

robust resource for clinical data, case examples,

and program development of hemodynamic

support for interventional cardiology. More

than 1,900 active users are regularly accessing

meaningful content from over 50 physician

experts and 200 presentations and sharing it with

their networks. Additionally, patients have a portal

to learn about treatment options, review patient

experiences and ﬁ nd the appropriate Protected

ProtectedPCI.com

PCI hospitals in their communities.

In the U.S. alone, many of the eligible 121,000
high-risk PCI patients per year remain unaware
that Protected PCI, a new treatment option, exists
for advanced coronary artery disease. Clinical
evidence and public interest continue to grow for
this ﬁ rst-of-its-kind FDA approval as “safe and
effective” for high-risk PCI. With an estimated
7% penetration rate in Protected PCI, and our
emphasis on physician and patient education,
we have a long runway for sustainable growth.

Many high-risk heart failure patients may beneﬁ t
from Protected PCI treatment to compensate
for poor hemodynamics (low EF), complex
coronary artery disease, patient comorbidities
such as prior surgery or an elevated risk of acute
kidney injury (AKI). Even some patients eligible
and receiving PCI treatment with risk of acute
kidney injury are “staged,” which can translate
into two or three procedures over 180 days as
compared to one Protected PCI. The American
Heart Association journal Circulation recently
published a 230 patient, retrospective analysis
titled “Hemodynamic Support Protects Against
Acute Kidney Injury in Patients Undergoing High-
Risk PCI”. The paper demonstrates the beneﬁ t of
Impella® support during PCI, showing substantial
reduction in AKI and dialysis.

The physician community is embracing this
science and technology and many are leading
the way by publishing clinical outcomes and
educating their peers on the beneﬁ ts of complete
revascularization during Protected PCI and heart
recovery for elective, urgent and emergent
patients. For this reason, Abiomed created the

We recently introduced the Abiomed Impella

Quality (IQ) Assurance Program which includes

nearly 50,000 U.S. patients in an observational

database derived from the commercial tracking

of those treated with Impella over the past nine

years. This IQ database is combined with data

collected in our cVAD Registry and FDA studies

to create the largest database in the world of

patients with high-risk PCI and cardiogenic

shock. We believe that by sharing our data-driven

insights and clinical expertise, along with our 24x7

onsite and on-call support, we can help hospitals

improve outcomes. This is especially true for

cardiogenic shock patients who may beneﬁ t

from standardized protocols to achieve the

goal of native heart recovery, not just survival

and additional long-term care. Cardiogenic

Shock patients are associated with one of the

highest mortality rates and costs in the

healthcare system.

We estimate that each year more than 100,000

cardiogenic shock patients already at U.S.

hospitals would beneﬁ t from Impella and our full

service support and implementation of protocols

derived from top performing hospitals. Today,

we have Impella adoption in cardiogenic shock

patients of approximately 6% after one year of an

exclusive FDA approval as “safe and effective.”

Overall, it is rewarding to see improved outcomes

and we expect continued adoption of best

practices and protocols throughout the United

States, Germany, and eventually Japan.

Looking to the future, we are also focused on new

indications, new products and new geographies.

A B I O M E D 3

50302neweds.indd c3

6/16/17 7:55 PM

For new indications, we are exploring patients

months of use. We continue to advance the Impella

with certain types of heart attacks, such as ST

BTRTM, which is designed as a minimally invasive,

elevation myocardial infarction (STEMI). Abiomed

one year heart pump with a wearable driver for

recently announced that we have enrolled the

hospital discharge. For new geographies, we are

ﬁ rst patient in a new, FDA approved, 50-patient

entering the second largest medical device market,

feasibility study to evaluate the use of Impella

Japan. We have received product approval, hired a

CP® heart pump for unloading the left ventricle

prior to PCI in patients presenting with STEMI

without cardiogenic shock. This represents each

year a potential new population for Abiomed

of approximately 200,000 patients in the U.S.

who may beneﬁ t from hemodynamic support

by reducing or limiting damage to the heart

muscle during the heart attack. Despite current

technology and standard of care, 76% of patients

experiencing their ﬁ rst heart attack will develop

heart failure within 5 years1 and approximately

40% will die2. We are approaching this research

endeavor with great rigor and science because

dedicated team, selected our 10 training hospitals

and are working with Japanese government

authorities on reimbursement approval.

The foundation of our success is our Four

Principles—Recovering Hearts and Saving Lives,

Leading in Technology and Innovation, Growing

Shareholder Value, and Sustaining a Winning

Culture. These Four Principles guide our journey,

unite us, and remind us to always put our Patients

First. Today, Abiomed has grown to nearly 1,000

world-wide employees with ofﬁ ces in Danvers,

Massachusetts, Aachen and Berlin, Germany and

the concept of unloading and protecting heart

Tokyo, Japan.

muscle remains one of the most promising

ideas to reduce the number of future heart

failure patients.

For new products, our Impella RP® has a
projected commercial launch in the U.S. in the
second half of our ﬁ scal year following a FDA
PMA approval. Until that time, we are maintaining
our controlled Impella RP roll-out with clinical
publications, education and training.

We continue to invest and develop new product
initiatives and several are planned for this year.
Abiomed expects to achieve ﬁ rst in man (FIM) of
Impella ECPTM, the 9 Fr. expandable catheter 4+
liter pump and Impella 5.5TM, the 5.5 liter pump
with axillary implantation for ambulation and

In conclusion, we are making great strides in

transforming the care for patients requiring

percutaneous hemodynamic support. Abiomed

is ﬁ nancially secure and operationally prepared

to continue to create the Field of Heart Recovery.

Thank you to our shareholders for their support

and to our employees and customers for their hard

work and dedication to our mission.

Sincerely,

Michael R. Minogue
Chairman, President and Chief Executive Ofﬁ cer

Commercial Field Team meeting April, 2017

4 F Y 2 0 1 7 A N N U A L R E P O R T

50302neweds.indd c4

6/16/17 7:55 PM

IMPELLA® HEART PUMP PLATFORM

IMPELLA 2.5®

IMPELLA CP®

IMPELLA 5.0®

IMPELLA RP®

Breakthrough Heart Support Technologies: Abiomed's portfolio of heart support and recovery products

and services offer healthcare professionals an array of choices across a broad clinical spectrum, from the

catheterization lab to the surgical suite, together with interventional cardiologists and surgeons.

AUTOMATED IMPELLA® CONTROLLER

The Automated Impella Controller is the primary user control

interface for the Impella platform. It controls the Impella

catheter performance, monitors for alarms, and displays real

time hemodynamic and catheter position information.

PIPELINE TECHNOLOGY*

IMPELLA ECP™

IMPELLA 5.5™

IMPELLA BTR™

* Impella ECP™, Impella 5.5™ and Impella BTR™ devices are currently in development and are not approved for use or sale. For indications for use and important safety information
concerning Impella devices, please visit www.protectedpci.com/hcp/information/isi and www.cardiogenicshock.com/hcp/information/isi

A B I O M E D 5

50302neweds.indd c5

6/16/17 7:55 PM

NEW AMERICAN HEART ASSOCIATION STATISTICS PREDICT THAT BY YEAR 2035,

45% of the total U.S.
population, or approximately
131 million people,

will have at least one health problem related to heart disease,

24 million will have coronary heart disease and nearly 9

million will have congestive heart failure.

#1 CAUSE OF
DEATH IN U.S.
(1 IN 3 DEATHS)
CORONARY ARTERY
DISEASE/HEART FAILURE:
875,000 DEATHS

TOP RISK FACTORS
FOR HEART FAILURE
LOW EJECTION FRACTION &
FIRST HEART ATTACK (AMI)

#1 CARDIAC
MORTALITY RISK
IN HOSPITAL
CARDIOGENIC SHOCK

#1 HEALTH
EXPENDITURES
HEART CONDITIONS
($204B)

6 F Y 2 0 1 7 A N N U A L R E P O R T

50302neweds.indd c6

6/16/17 7:55 PM

ABIOMED’S PATIENT ADVOCACY PROGRAM:
HEART RECOVERY ADVOCATES VISIT ABIOMED HEADQUARTERS

IMPELLA® PATIENT BUDDY

Last year, Abiomed introduced our Heart Recovery Advocates, a group

of cardiac event survivors who have beneﬁ tted from Impella therapy and

as a result, are living full and meaningful lives with their native hearts.

These Advocates are on a mission to share their stories of survival and

educate the public about heart recovery, which is the ideal option for

patients’ quality of life.

IMPELLA® PATIENT JAY

WORLD’S SMALLEST
HEART PUMP HELPS SAVE
UTAH GRANDMOTHER
AFTER SERIOUS
HEART ATTACK

IMPELLA® PATIENT MICHELLE

Many new survivors became Heart Recovery
Advocates this year through a Heart Recovery
Reunion, an event that reunites patients and
the staff who treated them.

500+

TWEETS ABOUT
HEART RECOVERY

A B I O M E D 7

50302neweds.indd c7

6/16/17 7:55 PM

BRAD MCDONALD
I M P E L L A C P ® T R E A T E D P A T I E N T | B A I N B R I D G E I S L A N D , W A

Bradley “Brad”, 69, was an active and athletic

Fortunately, Brad was identiﬁ ed as an

man in his earlier years. Although there was

appropriate candidate for a Protected PCI.

a history of heart complications in his family,

During this interventional procedure, an

Brad never imagined that he too would suffer

Impella CP device temporarily supported

such health issues. For years, Brad would go to

Brad’s heart while he received multiple stents

the doctor and receive a normal report.

that restored his heart’s ability to pump blood

Last year, Brad began experiencing cardiac

throughout his body.

changes and his symptoms became more

Since the Protected PCI, Brad has returned to

severe. Brad’s heart disease ultimately left

a normal quality of life—regularly exercising

him short of breath and too weak to perform

and enjoying time with his family. In fact, Brad

his normal routines or activities. Brad found

feels so healthy that this spring, he and his wife

himself conﬁ ned to sitting and sleeping on

drove a bright red truck from Washington State

his couch. Life looked very bleak, and his

down to Arizona to visit their daughter and her

prognosis was poor.

expanding family.

“ When I think about the fact that I might not have had the chance to

meet my youngest grandchild, or to play ball with my grandchildren

in the yard, I am grateful beyond words.” — BRAD MCDONALD

8 F Y 2 0 1 7 A N N U A L R E P O R T

50302neweds.indd c8

6/16/17 7:56 PM

50302neweds.indd c9

6/16/17 7:56 PM

A B I O M E D 9

1 0 F Y 2 0 1 7 A N N U A L R E P O R T

50302neweds.indd c10

6/16/17 7:56 PM

MELISSA OLASO
I M P E L L A C P ® T R E A T E D P A T I E N T | V E N T U R A , C A

On October 18, 2014, just after giving birth,

Dr. Rishi Patel inserted the Impella CP device

34-year-old Melissa Olaso went into heart

to assist the pumping function of her heart.

failure. She was unable to breathe and her

With the assistance of the Impella ventricular

blood pressure rapidly dropped. Melissa was

assist device, her heart was able to circulate

in cardiogenic shock—a condition in which the

blood and her condition stabilized.

heart cannot pump enough blood to the body’s

vital organs and they begin to shut down.

Melissa was immediately placed on a ventilator

to help her breathe; however, she continued to

deteriorate. She was emergently transferred

to the CCU and placed on heart-supporting

medications. Unfortunately, she continued

to deteriorate and was taken urgently to the

cardiac catheterization laboratory where

With the hemodynamic support of the Impella

device, Melissa’s heart began showing signs

of improvement. After a few days, Melissa

was on the road to recovery. Just a couple of

weeks later, she was able to walk out of the

hospital with her own heart. Since then, she has

returned to her regular routine as an active and

healthy young mother.

“ To this day, I remember Melissa and her presentation very clearly. As a father and a

husband, seeing a young family go from celebrating what should have been one of the

happiest days of their lives to having their mother become critically ill was a challenge.

Melissa was rapidly failing all medical therapies we could offer her. Fortunately, we were

able to assess her appropriately and promptly give her the support her heart needed to

recover. Melissa would not be alive today without the support of the Impella device.
I am thankful that she was able to make a full recovery. ” — RISHI PATEL, M.D.

“ It is heartbreaking to think that I might not have been around to see my oldest daughter

graduate high school and go on to university, or see my boys play basketball, or witness the

many milestones of my newborn daughter. I am truly grateful that I am alive to share these

memories. Not many things give you a second chance at life, but my physicians and the

Impella did that for me.” - MELISSA OLASO

A B I O M E D 1 1

50302neweds.indd c11

6/16/17 7:56 PM

KRISTIE HOLMES
I M P E L L A C P ® T R E A T E D P A T I E N T | L O S A N G E L E S , C A

On May 5, 2016, Kristie Holmes was driving her

Immediately upon arrival, physicians inserted

children to school when she began experiencing

an Impella CP heart pump through the femoral

symptoms that became increasingly severe—

artery in her groin to help supplement her

including shallow breathing and weakness. Kristie

weakened heart. After a few days, the physicians

was able to call 9-1-1 on speakerphone. With

decided to replace the ﬁ rst pump with a new

her children in the car listening, Kristie calmly

Impella CP device which was inserted via an

explained her symptoms and was told she might

axillary artery near Kristie’s collarbone. The

be having a panic attack. As a clinical social

axillary placement would allow her to leave her

worker, Kristie knew this was more serious and

hospital bed and walk around, which would

urged the operator to call for immediate care.

ultimately help Kristie regain her strength.

The paramedics arrived swiftly and Kristie was

rushed by ambulance to Cedars Sinai in Los

Angeles. There physicians discovered that she

had suffered a massive heart attack due to

She remained on Impella device support for

multiple days and not only survived the ordeal,

but regained enough strength to return home

with her native heart.

two large tears in her heart—better known as

Today, Kristie is an active mom, professor at the

a Spontaneous Coronary Artery Dissection.

University of Southern California, and is on the

Kristie’s body was in cardiogenic shock, which

board of the United Nations Women U.S.

meant her heart could not pump enough blood

National Committee.

to perfuse the end organs of the body.

“ Women need to become advocates for themselves when it comes to their health;

I knew I was having a heart attack. I am glad I was able to beneﬁ t from support with

Impella which enabled my heart to rest after I went into cardiogenic shock, or else

things might be very different today.” - KRISTIE HOLMES

1 2 F Y 2 0 1 7 A N N U A L R E P O R T

50302neweds.indd c12

6/16/17 7:56 PM

3rd Patient

50302neweds.indd c13

6/16/17 7:56 PM

A B I O M E D 1 3

ABIOMED CITIZENSHIP AND GIVE BACK PROGRAM

MVP VETS Abiomed is a
founding member of MVPVets

(Mentoring Veterans Program)

and CEO Michael Minogue

is co-founder and chairman.

MVPVets is a 510(c)(3) non-

proﬁ t organization dedicated

to helping military veterans

transition to careers in the

medical device, life science,

and pharmaceutical industries.

MVPVets brings together

veterans, mentors and

companies through career-

building endeavors.

FOR MORE INFORMATION,
PLEASE CONTACT
INFO@MVPVETS.ORG

NATIONAL

Mentoring Veterans Program (MVPVets)

American Cancer Society

American Heart Association

Barajas Foundation

MASSACHUSETTS

Big Brothers Big Sisters

Boys & Girls Clubs of Boston

Camp Harbor View

New England Patriots Charitable
Foundation

The American Ireland Fund

The Inner City Catholic Schools
Foundation

Visiting Nurses Association of Boston

NORTH SHORE COMMUNITY

North Shore Music Theater

St John’s Preparatory School

Danvers Police Department
DARE Program

Danvers Fire Department

Abiomed Heart Recovery Advocates at the American Heart
Association Go Red luncheon in Boston.

Abiomed is proud to support the Danvers Police and Fire
Departments; CEO Mike Minogue, center.

1 4 F Y 2 0 1 7 A N N U A L R E P O R T

50302neweds.indd c14

6/16/17 7:56 PM

IN M E MORI A M
HENRI A. TERMEER, ABIOMED BOARD MEMBER 1987-2017

“ As a mentor, Henri generously shared his wisdom and knowledge with hundreds

of CEOs, including me, paving the way for many small companies to make a big

difference. One of Henri’s longest commitments was to Abiomed on whose board

he served since 1987, and we’re grateful for his contributions. Henri will be

remembered — for his insight, vision, and sense of purpose.”

- ABIOMED PRESIDENT, CHAIRMAN AND CHIEF EXECUTIVE OFFICER, MICHAEL R. MINOGUE

“ Henri Termeer was a brilliant leader and a dear friend. We served together on

the Abiomed Board of Directors since 1987. Henri was a wonderfully warm and

wise Director of Abiomed as well as one of the most important innovators who

helped make Boston the Biotech Capital of the World. He will be deeply missed.”

- W. GERALD AUSTEN, M.D., DIRECTOR EMERITUS

P
H
O
T
O

R
O
G
E
R
F
A
R
R
N
G
T
O
N

A B I O M E D 1 5

50302neweds.indd c15

6/16/17 7:56 PM

F R O M P A G E 4

1. “Declining In-Hospital Mortality and Increasing Heart Failure Incidence in Elderly Patients With First Myocardial Infarction,”

(J. Am. Coll. Cardiol. 2009; 53(1); 13-20).

2. “Heart Disease and Stroke Statistics 2016 Update: A Report from the American Heart Association Statistics Committee and Stroke

Statistics Subcommittee.” (Circulation. 2016; 133(4); 38-360).

1 6 F Y 2 0 1 7 A N N U A L R E P O R T

50302neweds.indd c16

6/16/17 7:56 PM

2017 FORM 10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-K

(Mark One)
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2017
OR

For the transition period from

Commission File Number: 001-09585

ABIOMED, Inc.
(Exact Name of Registrant as Specified in Its Charter)

Delaware
(State or Other Jurisdiction of
Incorporation or Organization)

22 Cherry Hill Drive
Danvers, Massachusetts
(Address of Principal Executive Offices)

04-2743260
(I.R.S. Employer
Identification No.)

01923
(Zip Code)

(978) 646-1400
(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $.01 par value

Securities registered pursuant to Section 12(g) of the Act:
None

Name of Each Exchange on Which Registered:
The NASDAQ Stock Market LLC

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes  No 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). Yes  No 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the
best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of the Form 10-K or any amendment to this Form
10-K 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the
Exchange Act.:

Large accelerated filer
Non-accelerated filer
Emerging growth company


 (Do not check if a smaller reporting company)


Accelerated filer
Smaller reporting company




If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last
sold as of the last business day of the registrant’s most recently completed second fiscal quarter was $5,571,835,144. As of May 12, 2017, 43,819,330 shares of the
registrant’s common stock, $.01 par value, were outstanding.

Portions of the definitive Proxy Statement for Abiomed, Inc.’s 2017 Annual Meeting of Stockholders, which is scheduled to be filed within 120 days after the

end of Abiomed, Inc.’s fiscal year, are incorporated by reference into Part III (Items 10, 11, 12, 13 and 14) of this Form 10-K.

DOCUMENTS INCORPORATED BY REFERENCE

TABLE OF CONTENTS

PART I
Item 1.
Business..................................................................................................................................................................
Item 1A. Risk Factors............................................................................................................................................................
Item 1B. Unresolved Staff Comments ..................................................................................................................................
Properties................................................................................................................................................................
Item 2.
Legal Proceedings ..................................................................................................................................................
Item 3.
Mine Safety Disclosures ........................................................................................................................................
Item 4.

PART II

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity

Securities ...........................................................................................................................................................
Item 5.
Selected Financial Data..........................................................................................................................................
Item 6.
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations ................................
Item 7A. Quantitative and Qualitative Disclosure About Market Risk ................................................................................
Financial Statements and Supplementary Data......................................................................................................
Item 8.
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ................................
Item 9A. Controls and Procedures ........................................................................................................................................
Item 9B. Other Information...................................................................................................................................................

PART III

Item 10.
Item 11.
Item 12.
Item 13.
Item 14.

Item 15.
Item 16.

Directors, Executive Officers and Corporate Governance.....................................................................................
Executive Compensation........................................................................................................................................
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters..............
Certain Relationships and Related Transactions, and Director Independence ......................................................
Principal Accountant Fees and Services ................................................................................................................

PART IV
Exhibits, Financial Statement Schedules ...............................................................................................................
Form 10-K Summary .............................................................................................................................................

Page

1
14
29
29
29
29

30
32
33
41
41
42
42
44

45
45
45
45
45

46
49

NOTE REGARDING TRADEMARKS

ABIOMED, ABIOCOR, IMPELLA, IMPELLA 2.5, IMPELLA 5.0, IMPELLA LD, IMPELLA CP, and IMPELLA RP are
trademarks of ABIOMED, Inc., and are registered in the U.S. and certain foreign countries. BVS is a trademark of ABIOMED, Inc.
and is registered in the U.S. AB5000 and cVAD REGISTRY are trademarks of ABIOMED, Inc. RECOVER is a trademark of
Abiomed Europe GmbH, a subsidiary of ABIOMED, Inc., and is registered in certain foreign countries.

NOTE REGARDING COMPANY REFERENCES

Throughout this report on Form 10-K (the “Report”), “Abiomed, Inc.,” the “Company,” “we,” “us” and “our” refer to ABIOMED,
Inc. and its consolidated subsidiaries.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report, including the documents incorporated by reference in this report, includes forward-looking statements. These
forward-looking statements may be accompanied by such words as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,”
“may,” “plan,” “potential,” “project,” “target,” “will” and other words and terms of similar meaning. Each forward-looking statement
in this report is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by
such statement. Forward-looking statements in these documents include, but are not necessarily limited to, those relating to:



the ability of patients, hospitals and other customers using our products to obtain reimbursement of their medical
expenses by government healthcare programs and private insurers including potential changes to current government and
private insurers’ reimbursements;

other competing therapies that may in the future be available to heart failure patients;

the development of new and enhancement of existing products and anticipated costs, including research and development,
sales and marketing, manufacturing and training costs associated with product development;

our plans to potentially acquire new businesses or technologies;

the potential markets that exist or could develop for our products and products under development;

our business strategy, and commercial plans for our products, including our expansion into new markets such as Japan;

our revenue and revenue growth expectations, our level of operating expenses and our goal of maintaining profitability;

expected capital expenditures for the fiscal year ending March 31, 2018;

demand for and expected shipments of our products;

our belief that the existing manufacturing facilities give us the necessary physical capacity to produce sufficient quantities
of products to meet anticipated demand;

the expectation that we will be able to expand our manufacturing capacity to support expected demand for our Impella
devices;

the expectation that our suppliers will furnish us required components when we need them or be able to provide us
inventory materials to support our expected growth in demand for our products;

our ability to protect our intellectual property, including patent, trademark, copyright, trade secret and domain name
protection;

our belief that patents will issue pursuant to our pending or future patent applications;

possible shifts in the revenue mix associated with our products; our ability to increase revenues from our Impella® line of
heart pumps and the sufficiency of revenues, profits and cash flows to fund future operations;

our expectation that almost all of our product and service revenue in the near future will be from our Impella devices;

future actions related to or results of ongoing investigations and litigation, and expenditures or costs related thereto;

our expectations concerning additional PMA supplement submissions for Impella devices;

our expectations regarding continuing consolidation of medical device customers into larger purchasing groups and any
resulting pressure on product pricing;

plans with respect to clinical trials and registries; and

the sufficiency of our liquidity and capital resources.

Factors that could cause actual results or conditions to differ from those anticipated by these and other forward-looking
statements include our inability to predict the outcome of investigations and litigation and associated expenses; possible delays in our
research and development programs; our ability to obtain regulatory approvals and market our products, and uncertainties related to
regulatory processes; greater government scrutiny and regulation of the medical device industry and our ability to respond to changing
laws and regulations affecting our industry and changing enforcement practices related thereto; the inability to manufacture products
in commercial quantities at acceptable costs to meet expected customer demand, the acceptance by physicians and hospitals of our
products; the impact of competitive products and pricing; uncertainties associated with future capital needs and the risks identified
under “Risk Factors” section set forth in Item 1A of Part I and elsewhere in this report, as well as other information we file with the
U.S. Securities and Exchange Commission, or SEC. Readers are cautioned not to place undue reliance on any forward-looking
statements contained in this report, which speak only as of the date of this report. We do not undertake any obligation to update or
revise these forward-looking statements whether as a result of new information, future events or otherwise, unless otherwise required
by law. Our business is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors,
and others should give careful consideration to these risks and uncertainties.

ITEM 1.

BUSINESS

Overview

PART I

We are a leading provider of temporary mechanical circulatory support devices, and we offer a continuum of care to heart
failure patients. We develop, manufacture and market proprietary products that are designed to enable the heart to rest, heal and
recover by improving blood flow to the coronary arteries and end-organs and/or temporarily assisting the pumping function of the
heart. Our products are used in the cardiac catheterization lab, or cath lab, by interventional cardiologists, the electrophysiology lab,
the hybrid lab and in the heart surgery suite by heart surgeons. A physician may use our devices for patients who are in need of
hemodynamic support prophylactically, urgently or emergently before, during or after angioplasty or heart surgery procedures. We
believe that heart recovery is the optimal clinical outcome for a patient experiencing heart failure because it enhances the potential for
the patient to go home with the patient’s native heart, facilitating the restoration of quality of life. In addition, we believe, that for the
care of such patients, heart recovery is often the most cost-effective solution for the healthcare system.

Our strategic focus, which has resulted in the majority of our revenue growth is the market penetration of our family of
Impella® heart pumps. The Impella device portfolio, which includes the Impella 2.5®, Impella CP®, Impella RP®, Impella LD® and
Impella 5.0® devices, has supported numerous patients worldwide. We expect that almost all of our product and service revenue in the
near future will be from our Impella devices. Revenues from our non-Impella devices, largely focused on the heart surgery suite, have
been decreasing over the past several years and are expected to be insignificant as we have strategically shifted our sales and
marketing efforts towards our Impella devices, primarily in the cath lab.

In March 2015, we received a Pre-Market Approval, or PMA, from the U.S. Food and Drug Administration, or FDA, for use
of the Impella 2.5 device during elective and urgent high-risk percutaneous coronary intervention, or PCI, procedures. In December
2016, the FDA expanded this PMA approval in the U.S. to include the Impella CP device. With these PMA indications, the Impella
2.5 and Impella CP devices provide the only minimally invasive hemodynamic support treatment options indicated for use during
high-risk PCI procedures. In April 2016, the FDA approved a PMA supplement for our Impella 2.5, Impella CP, Impella 5.0 and
Impella LD devices to provide treatment for ongoing cardiogenic shock that occurs following a heart attack or open heart surgery. The
intent of the Impella system therapy is to reduce ventricular work and to provide the circulatory support necessary to allow heart
recovery and early assessment of residual myocardial function.

In March 2017, we submitted a PMA application for Impella RP. We expect to continue to make additional PMA supplement

submissions for our suite of Impella devices for additional indications.

Our Impella 2.5, Impella 5.0, Impella LD, Impella CP and Impella RP devices also have CE Mark approval and Health Canada

approval, which allows us to market these devices in the European Union and Canada.

In September 2016, we received Pharmaceuticals and Medical Devices Agency, or PMDA, approval from the Japanese
Ministry of Health, Labour & Welfare for our Impella 2.5 and Impella 5.0 heart pumps to provide treatment of drug-resistant acute
heart failure in Japan. We are preparing for the market launch in Japan, including working with Japanese government authorities to
obtain appropriate reimbursement for these products. We do not expect to have any material revenue in Japan during fiscal 2018.

In May 2017, we announced the enrollment of the first patient in the FDA approved prospective feasibility study, STEMI Door
to Unloading with Impella CP system in acute myocardial infarction. This trial will focus on feasibility and safety of unloading the left
ventricle using the Impella CP heart pump prior to primary PCI in patients presenting with ST segment elevation myocardial
infarction, or STEMI, without cardiogenic shock with the hypothesis that this will potentially reduce infarct size. The study, which
received Investigational Device Exemption, or IDE, approval from the FDA in October 2016, is a prospective, multi-center feasibility
study. Up to 50 patients at 10 sites will be enrolled in the study. We enrolled the first patient in this study in April 2017 and we expect
to complete enrollment in fiscal 2019.

Corporate Background

Our Company was founded in 1981 and we are currently incorporated in Delaware. Our common stock is listed on the

NASDAQ Global Select Market under the ticker symbol ABMD.

Our principal executive offices are located at 22 Cherry Hill Drive, Danvers, Massachusetts 01923. Our telephone number is
(978) 646-1400. We make available, free of charge on our website located at www.abiomed.com, our annual report on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable
after filing such reports with the SEC. ABIOMED, Inc. has a Code of Conduct and Compliance Policy that applies to all of its

directors, officers, and employees. A paper copy of this document may be obtained free of charge by writing to the Company’s Chief
Compliance Officer at our principal executive offices or by email at ir@abiomed.com. Our audit committee, governance and
nominating committee and compensation committee charters are also posted on our website. The contents of our website are not
incorporated by reference into this report. In addition, the public may read and copy any materials we file or furnish with the SEC, at
the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 or may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. Moreover, the SEC maintains an Internet site that contains reports,
proxy and information statements, and other information regarding reports that we file or furnish electronically with the SEC at
www.sec.gov.

Our Products

Impella 2.5®

The Impella 2.5 device is a percutaneous micro heart pump with an integrated motor and sensors. The device is designed
primarily for use by interventional cardiologists to support patients in the cath lab who may require assistance to maintain circulation.
The Impella 2.5 heart pump can be quickly inserted via the femoral artery to reach the left ventricle of the heart where it is directly
deployed to draw blood out of the ventricle and deliver it to the circulatory system. This function is intended to reduce ventricular
work and provide blood flow to vital organs. The Impella 2.5 heart pump is introduced with normal interventional cardiology
procedures and can pump up to 2.5 liters of blood per minute.

The Impella 2.5 device received 510(k) clearance from the FDA in June 2008 for partial circulatory support for up to six hours.

In March 2015, we received a PMA from the FDA for the use of the Impella 2.5 device during elective and urgent high-risk PCI
procedures. With this PMA indication, the Impella 2.5 device became the first FDA approved hemodynamic support device for use
during high-risk PCI procedures. Under this first PMA, the Impella 2.5 is a temporary (up to six hours) ventricular support device
indicated for use during high-risk PCI performed in elective or urgent hemodynamically stable patients with severe coronary artery
disease and depressed left ventricular ejection fraction, when a heart team, including a cardiac surgeon, that has determined high-risk
PCI is the appropriate therapeutic option. Use of the Impella 2.5 device in these patients may prevent hemodynamic instability that
may occur during planned temporary coronary occlusions and may reduce periprocedural and post-procedural adverse events. The
product labeling allows for the clinical decision by physicians to leave the Impella 2.5 device in place beyond the intended duration of
up to six hours should unforeseen circumstances arise. Pursuant to our PMA approval requirements, we are conducting a single-arm,
post-approval study on the Impella 2.5 device, collecting data on high-risk PCI patients. The study is a prospective, multi-center study
comprised of 369 patients from up to 70 sites supported with the Impella 2.5 system.

In April 2016, the FDA approved a supplement to our March 2015 PMA approval for the use of our Impella 2.5, Impella CP,

Impella 5.0 and Impella LD devices to provide treatment for ongoing cardiogenic shock. This PMA supplement covers a set of
indications related to the use of the Impella devices in patients suffering cardiogenic shock following acute myocardial infarction or
cardiac surgery and allows for a longer duration of support.

The data submitted to the FDA in support of the PMA supplement included an analysis of 415 patients from the RECOVER 1

study and the U.S. Impella registry, or cVAD Registry™, as well as a literature review using the Impella devices in 692 patients from 17
clinical studies. The PMA supplement also included a safety analysis evalulating the information in the FDA medical device reporting, or
MDR, database, following the use of the Impella devices in more than 24,000 patients and which draws from seven years of experience
using the Impella devices in the U.S. We believe this is the most comprehensive review ever submitted to the FDA for circulatory support
in the cardiogenic shock population.

Pursuant to the April 2016 PMA approval, the Impella 2.5, Impella CP, Impella 5.0 and Impella LD catheters, in conjunction
with the Automated Impella Controller, or AIC, were approved as temporary ventricular support devices intended for short term use
(≤ 4 days for the Impella 2.5 and Impella CP, and ≤ 6 days for the Impella 5.0 and LD) and indicated for the treatment of ongoing
cardiogenic shock that occurs immediately (< 48 hours) following acute myocardial infarction or open heart surgery as a result of
isolated left ventricular failure that is not responsive to optimal medical management and conventional treatment measures. The intent
of the Impella system therapy is to reduce ventricular work and to provide the circulatory support necessary to allow heart recovery
and early assessment of residual myocardial function. Optimal medical management and convention treatment measures include
volume loading and use of pressors and inotropes, with or without an intraortic balloon pump, or IABP.

The Impella 2.5 device has CE Mark approval in Europe for up to five days of use and is approved for use in up to 40

countries. The Impella 2.5 device also has Health Canada approval which allows us to market the device in Canada.

In September 2016, we received PMDA approval from the Japanese Ministry of Health, Labour & Welfare for our Impella 2.5
and Impella 5.0 heart pumps to provide treatment of drug-resistant acute heart failure in Japan. We are preparing for the market launch

in Japan, including working with Japanese government authorities to obtain reimbursement for these products. We do not expect to
have any material revenue in Japan during fiscal 2018.

We expect to continue to make additional PMA supplement submissions for our Impella devices for additional clinical

indications.

Impella CP®

In September 2012, we announced that the Impella CP device received 510(k) clearance from the FDA. The Impella CP device

provides blood flow of approximately one liter more per minute than the Impella 2.5 device and is primarily used by either
interventional cardiologists to support patients in the cath lab or by cardiac surgeons in the heart surgery suite.

In April 2016, the FDA approved the PMA supplement for certain of our devices, including our Impella CP device to provide

treatment for ongoing cardiogenic shock.

In December 2016, we received PMA approval from the FDA for the use of the Impella CP device during elective and urgent

high-risk PCI procedures, identical to the indication for use for the Impella 2.5 device. This approval allows the Impella CP to be used
as a temporary (≤ 6 hours) ventricular support system indicated for use during high risk PCI procedures performed in elective or
urgent hemodynamically stable patients with severe coronary artery disease and depressed left ventricular ejection fraction, when a
heart team, including a cardiac surgeon, has determined that high risk PCI is the appropriate therapeutic option. The product labeling
allows for the clinical decision by physicians to leave the Impella CP device in place beyond the intended duration of up to six hours
should unforeseen circumstances arise.

The primary endpoints of the feasibility study will focus on safety, including Adverse Cardiovascular and Cerebrovascular
Events, or MACCE, at 30 days. All patients will undergo cardiac magnetic resonance imaging to assess infarct size as a percent of left
ventricular mass at 30 days post-PCI. Patients will be randomized to Impella CP placement with immediate primary PCI, or to Impella
CP placement with 30 minutes of unloading prior to primary PCI. The hypothesis of this novel approach to treating STEMI patients,
based on extensive mechanistic research, is that unloading the left ventricle prior to PCI reduces myocardial work load, oxygen
demand and also initiates a cardio-protective effect at the myocardial cell level, which may alleviate myocardial damage caused by
reperfusion injury at the time of revascularization. This feasibility study will help refine the protocol and lay the groundwork for a
future pivotal study with more sites and patients and will be designed for statistical significance.

We expect to continue to make additional PMA supplement submissions for our Impella devices for additional clinical

indications.

The Impella CP device has CE Mark approval in Europe for up to five days of use and is approved for use in up to 40 countries.

Impella 5.0® and Impella LD®

The Impella 5.0 and Impella LD devices are percutaneous micro heart pumps with integrated motors and sensors for use
primarily in the heart surgery suite. These devices are designed to support patients who require higher levels of circulatory support as
compared to the Impella 2.5.

The Impella 5.0 device can be inserted into the left ventricle via femoral cut down or through the axillary artery. The Impella

5.0 device is passed into the ascending aorta, across the valve and into the left ventricle. The Impella LD device is similar to the
Impella 5.0 device, but it is implanted directly into the ascending aorta through an aortic graft. Both of these procedures are normally
performed with the assistance of heart surgeons in the surgery suite. The Impella 5.0 and Impella LD devices can pump up to five
liters of blood per minute, potentially providing full circulatory support.

The Impella 5.0 and Impella LD devices originally received 510(k) clearance in April 2009, for circulatory support for up to six

hours. In April 2016, the FDA approved the PMA supplement for certain of our devices, including our Impella 5.0 and Impella LD
devices to provide treatment for ongoing cardiogenic shock following a heart attack or open heart surgery.

The Impella 5.0 and Impella LD devices have CE Mark approval in Europe for up to ten days’ duration and are approved for

use in over 40 countries.

In September 2016, we received PMDA approval from the Japanese Ministry of Health, Labor & Welfare for our Impella 2.5

and Impella 5.0 heart pumps to provide treatment of drug-resistant acute heart failure in Japan. We are preparing for the market launch
in Japan, including working with Japanese government authorities to obtain reimbursement for these products. We do not expect to
have any material revenue in Japan during fiscal 2018.

Impella RP®

The Impella RP is a percutaneous catheter-based axial flow pump that is designed to allow greater than four liters of blood flow

per minute and is intended to provide the flow and pressure needed to compensate for right side heart failure. The Impella RP is the
first percutaneous single access heart pump designed for right heart support to receive FDA approval. The Impella RP device is
approved to provide support of the right heart during times of acute failure for certain patients who have received a left ventricle assist
device or have suffered heart failure due to acute myocardial infarction, or AMI, a failed heart transplant, or following open heart
surgery.

In November 2012, the Impella RP device received U.S. investigational device exemption, or IDE, approval from the FDA for

use in RECOVER RIGHT, a pivotal clinical study in the U.S. This was a 30 patient study that presented signs of right side heart
failure, required hemodynamic support, and were capable of being treated in the catheterization lab or cardiac surgery suite. The study
was completed in March 2014 and collected safety and effectiveness data on the percutaneous use of the Impella RP device and was
submitted to the FDA in support of a Humanitarian Device Exemption, or HDE, submission. An HDE is similar to a PMA application
but is intended for patient populations of 8,000 or less per year in the U.S. and is subject to certain profit and use restrictions. In
December 2016, the 21st Century Cures Act increased the upper population limit for an HDE from 4,000 to 8,000. An HDE approval
requires demonstration of the safety and probable benefit of the product, which is a lower standard than is applied to a PMA. In order
to receive an HDE, there must be no comparable devices approved under a PMA that are available to treat the targeted population. An
approved HDE authorizes sales of the device to any hospital after review and approval by the hospital’s Institutional Review Board. In
January 2015, we received HDE approval for the Impella RP device from the FDA. As part of the HDE approval, we were required to
conduct post approval studies for the Impella RP device. We have completed our Impella RP post-market studies and submitted a
PMA application in March 2017 with the FDA to convert our HDE approval to a PMA.

In April 2014, the Impella RP device received CE Mark approval which allows for commercial sales of the Impella RP device

in the European Union and other countries that require a CE Mark approval for commercial sales.

AB5000™

The AB5000 Circulatory Support System is for the temporary support of acute heart failure patients in profound shock,

including patients suffering from cardiogenic shock after a heart attack, post-cardiotomy cardiogenic shock, or myocarditis. The
AB5000 device was approved by the FDA in 2003. Revenues from the AB5000 device have been declining in recent years and we do
not expect to have any significant revenues from this product in the future. We are no longer producing the AB5000 product as we
focus our efforts on the Impella family of devices.

ECP

In July 2014, we acquired all of the issued shares of ECP Entwicklungsgesellschaft mbH, or ECP, a German limited liability

company, for $13.0 million in cash, with additional potential payments up to a maximum of $15.0 million based on the achievement
of certain technical, regulatory and commercial milestones. In connection with this acquisition, ECP acquired all of the issued shares
of AIS GmbH Aachen Innovative Solutions, or AIS, a German limited liability company, for $2.8 million in cash which was provided
by us. AIS, based in Aachen, Germany, holds certain intellectual property useful to ECP’s business, and, prior to being acquired by
ECP, had licensed such intellectual property to ECP.

ECP, based in Berlin, Germany, is engaged in research, development, prototyping and the pre-serial production of a

percutaneous expandable catheter pump which increases blood circulation from the heart with an external drive shaft. The ECP pump
is designed for blood flow of >3 liters/minute. It is intended to be delivered on the standard Impella 9 Fr catheter using the Impella
Automated Controller console and will include an 18 Fr expandable inflow in the left ventricle with a smooth membrane crossing the

left ventricle. The Impella ECP™ pump is still in early stages of research and development and has not been approved for commercial
use or sale.

Summary of Recent Financial Performance

For fiscal 2017, we recognized net income of $52.1 million, or $1.21 per basic share and $1.17 per diluted share, compared to

$38.1 million, or $0.90 per basic share and $0.85 per diluted share for the prior fiscal year. For fiscal year 2017, total revenue was
$445.3 million, up 35% compared to revenue of $329.5 million in fiscal year 2016. The increase in our net income for fiscal 2017 was
driven primarily by higher Impella product revenue due to greater utilization of our Impella devices in the U.S. and Germany.
Information regarding our total assets are contained within our consolidated financial statements in this Report.

Our Markets

According to the AHA’s Heart Disease and Stroke Statistics 2017 Update Report, coronary heart disease, or CHD, causes
approximately one of every seven deaths in the U.S. CHD is a condition of the coronary arteries that causes reduced blood flow and
insufficient oxygen delivery to the affected portion of the heart. CHD leads to acute myocardial infarction, or AMI, commonly known
as a heart attack, which may lead to heart failure, a condition in which the heart is unable to pump enough blood to the body’s major
organs.

A broad spectrum of therapies exists for the treatment of patients in early stages of CHD. Angioplasty procedures and stents are

commonly used in the cath lab to restore and increase blood flow to the heart. These treatments are often successful in slowing the
progression of heart disease, extending life, and/or improving the quality of life for some period of time. Patients presenting with acute
cardiac injuries potentially have recoverable hearts. Treatment for these patients in pre-shock in the cath lab is primarily focused on
hemodynamic stabilization. Acute heart failure patients in profound shock typically require treatment in the surgery suite. These are
patients suffering from cardiogenic shock after a heart attack, post-cardiotomy cardiogenic shock or myocarditis complicated with
cardiogenic shock. Chronic heart failure patients have hearts that are unlikely to be recoverable due to left and/or right-side heart
failure and their conditions cause their hearts to fail over time. Limited therapies exist today for patients with severe, end-stage, or
chronic heart failure.

In more severe cases of heart failure, patients are sent directly to the surgery suite for coronary bypass or valve replacement
surgery. The most severe acute heart failure patients are in profound cardiogenic shock, including those suffering from myocarditis (a
viral attack of the heart), or from those suffering from an impaired ability of the heart to pump blood after a heart attack or heart
surgery. These patients typically require treatments involving the use of mechanical circulatory support devices that provide increased
blood flow and reduce the stress on the heart. Many less severe patients in the cath lab could also benefit from circulatory support
devices or other clinical treatment, which could potentially prevent them from entering into profound shock.

There are a few primary types of devices used in the cath lab and surgery suite in the U.S. for circulatory support for pre-shock

and profound shock patients: intra-aortic balloons, or IABs, percutaneous assist devices, and surgical ventricular assist devices, or
VADs.

An IAB is an inflatable balloon inserted via a catheter into a patient’s circulatory system and is inflated and deflated in the aorta.
This is used as an initial line of therapy in the cath lab or the surgery suite for patients with diminished heart function. However, IABs
typically provide only limited enhancement and depend on the patient’s own heart to generate the majority of the patient’s blood flow.
In addition, IABs are often required to be used in conjunction with inotropes or other drugs to stimulate heart muscle ejection. The use
of these drugs, however, increases the risk of mortality. Further, the clinical efficacy of IABs has been challenged due to the
conclusions of the randomized, prospective, open-label, multicenter “SHOCK II” Trial. The conclusion of the trial was that the use of
IAB counterpulsation did not significantly reduce 30-day mortality in patients with cardiogenic shock complicating acute myocardial
infarction for whom an early revascularization strategy was planned. Further, IABs have limited effectiveness in patients that are
arrhythmic and/or in cardiogenic shock and published reports have indicated that IABs do not reduce mortality for patients in
cardiogenic shock.

Percutaneous assist devices and VADs are mechanical devices that help the failing heart pump blood or take over the pumping

function of the failing heart. Historically, VADs have been highly invasive and require implantation in the surgery suite. Percutaneous
assist devices allow for less invasive placement and removal, and can be done through a small puncture in the leg in the cath lab,
electrophysiology lab, or operating room. The use of surgically placed VADs generally falls into three sub-categories: recovery,
bridge-to-transplant and destination therapy.

Recovery VADs are designed to enable the patient’s heart to rest and potentially recover so that the patient can return home with

his or her own heart. Because recovery is the goal, these devices are designed to minimize damage to heart tissue and are removed
once the patient’s heart has recovered. If possible, recovery of a patient’s heart is generally preferred to transplantation or prolonged
device implantation, both of which have significant side effects for the patient and increase the risk of mortality. We believe heart
recovery is a preferred clinical outcome for patients, since it generally lowers the overall relative cost to the healthcare system versus
alternative therapies and treatment paths that may require multiple surgeries, lengthy or repeated hospital stays, chronic therapeutic
and immunosuppressant drugs and other related healthcare costs.

Research and Product Development

Since our founding in 1981, we have gained substantial expertise in circulatory support through the development of many
product platforms to support heart patients. This includes our Impella platform that we currently market and other technologies that we
have supported, such as our AB5000 systems. We also continue to work on developing new technologies as well, such as the ECP
development program. Our current strategy is to develop a complete portfolio of products across the continuum of care in heart
recovery, primarily focused in the area of circulatory care. We intend to continue to use this experience to develop additional
circulatory support products as well as making enhancements to our existing products. In addition, we have a number of new products
at various stages of development, some of which integrate the Impella technology platform.

As of March 31, 2017, our research and development staff consisted of 179 full-time employees. We expended $66.4 million,

$49.8 million and $36.0 million on research and development in fiscal years 2017, 2016 and 2015, respectively. Our research and
development expenditures include costs related to clinical trials, including ongoing clinical studies for our Impella devices.

Sales, Clinical Support, Marketing and Field Service

As of March 31, 2017, our worldwide sales, clinical support, marketing and field service teams included 398 full-time
employees, 324 of whom are in the U.S. and Canada and 74 of whom are in Europe and Japan. In recent years, we have significantly
increased the number of our direct sales and clinical support personnel in the U.S and Germany.

Our clinical support personnel consist primarily of registered nurses and other personnel with considerable experience in either

the surgery suite or the cath lab, and they play a critical role in training customers in the use of our products.

International sales (sales outside the U.S., primarily in Europe) accounted for 9%, 8% and 10% of total revenue during fiscal

years 2017, 2016 and 2015, respectively.

Manufacturing

We manufacture our products in Danvers, Massachusetts and Aachen, Germany. Our Aachen facility performs final assembly

and manufactures most of our disposable Impella devices, including the Impella 2.5, Impella 5.0, Impella LD, Impella CP and Impella
RP devices. Our Danvers facility also manufactures the Impella CP device, certain Impella subsystems and accessories, including our
Automated Impella Console, or AIC, our console for our Impella devices. In addition, we rely on third-party suppliers to provide us
with components used in our existing products and products under development. For example, we outsource some of the
manufacturing for components and circuit cards within our consoles.

We believe our existing manufacturing facilities give us the necessary physical capacity to produce sufficient quantities of
products to meet anticipated demand for at least the next twelve months based on our current revenue forecast. We have recently
expanded our manufacturing capacity in both our Aachen and Danvers facilities to support the growing demand for our Impella
devices. We expect to continue to expand our manufacturing capacity as we support expected growing demand for our Impella
devices. Our U.S. and German manufacturing facilities are certified as being in compliance with standards established by the
International Organization for Standardization, or ISO, and operate under the FDA’s good manufacturing practice requirements for
medical devices set forth in the Quality System Regulation, or QSR.

Intellectual Property

We have developed significant know-how and proprietary technology, upon which our business depends. To protect our know-

how and proprietary technology, we rely on trade secret laws, trademarks, patents, copyrights, and confidentiality agreements and
other contracts. However, these methods afford only limited protection. Others may independently develop substantially equivalent
proprietary information or technology, gain access to our trade secrets or disclose or use such secrets or technology without our
approval.

A substantial portion of our intellectual property rights relating to the Impella devices and other products under development,
such as the ECP pump, is in the form of trade secrets, rather than patents. We protect our trade secrets and proprietary knowledge in
part through confidentiality agreements with employees, consultants and other parties. We cannot assure you that our trade secrets will
not become known to or be independently developed by our competitors.

We own or have rights to numerous U.S. and foreign patents. Our U.S. patents have expiration dates ranging from 2017 to 2035

and our foreign patents have expiration dates ranging from 2017 to 2033. We also own or have rights to certain pending U.S. and
foreign patent applications. We believe patents will issue pursuant to such applications, but cannot guarantee it. Moreover, neither the
timing of any issuance, the scope of protection, nor the actual issue date of these pending applications can be forecasted with
precision. Where we have licensed patent rights from third parties, we are generally required to pay royalties.

Our patents may not provide us with competitive advantages. Our pending or future patent applications may not be issued.
Others may hold or obtain patents that cover aspects or uses of our innovations. The patents of others may render our patents obsolete,
limit our ability to patent or practice our innovations, or otherwise have an adverse effect on our ability to conduct business. Because
foreign patents may afford less protection than U.S. patents, they may not adequately protect our technology.

The medical device industry is characterized by a large number of patents and by frequent and substantial intellectual property

litigation. Our products and technologies could infringe on the proprietary rights of third parties. If third parties successfully assert
infringement or other claims against us, we may not be able to sell our products or we may have to pay significant damages and
ongoing royalties. In addition, patent or intellectual property disputes or litigation may be costly, result in product development delays,
or divert the efforts and attention of our management and technical personnel. If any such disputes or litigation arise, we may seek to
enter into a royalty or licensing arrangement. However, such an arrangement may not be available on commercially acceptable terms,
if at all. We may decide, in the alternative, to litigate the claims or seek to design around the patented or otherwise protected
proprietary technology, which may also be costly and time consuming.

The U.S. government may obtain certain rights to use or disclose technical data developed under government contracts that
supported the development of some of our products. We retain the right to obtain patents on any inventions developed under those
contracts, provided we follow prescribed procedures and are subject to a non-exclusive, non-transferable, royalty-free license to the
U.S. government.

Competition

Competition among providers of treatments for the failing heart is intense and subject to rapid technological change and
evolving industry requirements and standards. We compete with companies that have substantially greater or broader financial,
product development, sales and marketing resources and experience than we do. Furthermore, new product development and
technological change characterize the areas in which we compete. Our present or future products could be rendered obsolete or
uneconomical as a result of technological advances by one or more of our present or future competitors or by other therapies,
including drug therapies. We must continue to develop and commercialize new products and technologies to remain competitive in the
cardiovascular medical technology industry. We believe that we compete primarily on the basis of clinical superiority supported by
extensive data, and innovative features that enhance patient benefit, product performance, ease of use and reliability. Customer and
clinical support, and data that demonstrate both improvement in a patient's quality of life and a product's cost-effectiveness are
additional aspects of competition.

The cardiovascular segment of the medical technology industry is dynamic and subject to significant change due to cost-of-care

considerations, regulatory reform, industry and customer consolidation, and evolving patient needs. The ability to provide products
and technologies that demonstrate value and improve clinical outcomes is becoming increasingly important for medical technology
manufacturers.

We are aware of other heart replacement device research efforts in the U.S., Canada, Europe and Japan. In addition, there are a

number of companies; including Getinge (Maquet Cardiovascular), Abbott Laboratories, Medtronic, Edwards Lifesciences,
CardiacAssist, Terumo Heart, Inc., Teleflex, Inc. and several early-stage companies, that are developing heart assist products,
including implantable left ventricular assist devices and miniaturized rotary ventricular assist devices that directly and indirectly
compete with our products.

Third-Party Reimbursement

Our products and services are generally purchased by healthcare institutions that rely on third-party payers to cover and
reimburse the costs of related patient care. In the U.S., as well as in many foreign countries, government-funded or private insurance
programs pay the cost of a significant portion of a patient’s medical expenses. No uniform policy of coverage or reimbursement for
medical technology exists among all these payers. Therefore, coverage and reimbursement can differ significantly from payer to payer
and by jurisdiction.

Third-party payers may include government healthcare programs such as Medicare or Medicaid, private insurers or managed

care organizations. The Centers for Medicare & Medicaid Services, or CMS, is responsible for administering the Medicare program in
the U.S. and, along with its contractors, establishes coverage and reimbursement policies for the Medicare program. Medicare’s
coverage and reimbursement policies are particularly significant to our business because a large percentage of the population for
which our products are intended includes elderly individuals who are Medicare beneficiaries. In addition, private payers often follow
the coverage and reimbursement policies of Medicare. We cannot assure that government or private third-party payers will continue to
cover and reimburse the procedures using our products in whole or in part in the future or that payment rates for reimbursement will
be adequate.

Medicare payment may be made, in appropriate cases, for procedures performed in the in-patient hospital setting using our

technology. Medicare generally reimburses healthcare institutions in which the procedures are performed based upon prospectively
determined amounts. For hospital in-patient stays, the prospective payment generally is determined by the patient’s condition and
other patient data and procedures performed during the in-patient stay, using a classification system known as International
Classification of Diseases, or ICD, and medical severity diagnosis-related groups, or MS DRGs. Prospective rates are adjusted for,
among other things, regional differences, co-morbidity and complications. Hospitals performing in-patient procedures using our
devices generally do not receive separate Medicare reimbursement for the specific costs of purchasing or implanting our products.
Rather, reimbursement for these costs is bundled with the MS DRG-based payments made to hospitals for the procedures during
which our devices are implanted, removed, repaired or replaced. Because prospective payments are based on predetermined rates and
may be less than a hospital’s actual costs in furnishing care, hospitals have incentives to lower their in-patient operating costs by
utilizing products, devices and supplies that will reduce the length of in-patient stays, decrease labor or otherwise lower their costs.

Coverage and reimbursements for procedures to implant, remove, replace or repair our products are generally established in the

U.S. market. For instance, Medicare covers the use of LVADs when used for support of blood circulation post-cardiotomy, as a
temporary life-support system until a human heart becomes available for transplant, or as destination therapy for patients who require
permanent mechanical cardiac support, when the use is consistent with FDA approval and FDA-approved labeling instructions, as
applicable. Coverage and reimbursements for procedures to implant the Impella 2.5, Impella CP, Impella 5.0, Impella LD and Impella
RP devices are also established for in-hospital use by Medicare including ICD-10 for procedures and MS DRG coding. Actual
coverage and payment may vary by local Medicare fiscal intermediary or third-party insurer. Our Impella devices are also covered by
commercial and/or Medicare plans of many third-party insurers including Aetna, Humana, Cigna, HCSC Blue Cross Blue Shield, and
United Healthcare.

In October 2016, the American Hospital Association (AHA) Coding Clinic publication confirmed MS-DRG 215, Heart Assist

System Implant, for an Impella catheterization lab implant and ICU care. In addition to the October 2016 update, a recent AHA
Coding Clinical publication in March 2017 added clarification of coding for implant of bi-ventricular Impella heart support along with
the removal of the device provides hospital payment in MS-DRG 1 or 2 depending upon severity of illness. The Company’s Impella
heart pumps are now most commonly reimbursed under four MS-DRG categories including: 1) assistance in the catheterization lab
only in MS-DRGs 216-221; 2) implant, assistance and removal after leaving the catheterization lab in MS-DRG 215; 3) right and left
side heart support known as bi-ventricular and removal in MS-DRG 1-2, and; 4) hospitals receiving transferred patients with removal
of the device in MS-DRG 268-269. In prior years, Impella was primarily reimbursed in only one category of MS-DRGs 216-
221. The AHA and Centers for Medicare and Medicaid Services (CMS) have facilitated a system of care around the utilization of
percutaneous heart pumps for the catheterization lab, ICU support, and transfer of patients to specialized centers. This progress also
represents the expansion of Impella FDA indications for High Risk PCI, AMI Cardiogenic Shock, and bi-ventricular support.

In April 2017, the CMS released a proposed set of hospital payment levels for patient discharges after October 1, 2017. The

Proposed Rule for the Inpatient Prospective Payment System (IPPS) is available on the CMS website at cms.gov and is open for
public comment until June 13, 2017. Under the proposed rule, all discharges prior to October 1, 2017 are to remain under the current
payment levels, and the final rulemaking is expected to be released in August 2017. The final rulemaking may differ substantially
from this proposal. The text of the Proposed Rule did not include any changes to payment, coding or MS-DRG assignments for
Impella, percutaneous heart assist, or related technology. However, data tables also released with the Proposed Rule include changes
for all MS-DRGs which included a proposed reduction for MS-DRG 215 of 34.8%. The remaining MS-DRG categories have

proposed changes ranging from -7% to +3.5%. Even if the rule is finalized as proposed, all current MS-DRG rates will remain in place
until October 2017.

In addition to payments to hospitals for procedures using our technology, Medicare makes separate payments to physicians for

their professional services when they perform surgeries to implant, remove, replace or repair our devices or when they perform
percutaneous insertion and removal of Impella devices. Physicians generally bill for such services using a coding system known as
Current Procedural Terminology, or CPT, codes. Physician services performed in connection with the implantation, removal,
replacement or repair of our approved products are billed using a variety of CPT codes. Generally, Medicare payment levels for
physician services are based on the Medicare Physician Fee Schedule and are revised annually by CMS.

In general, third-party reimbursement programs in the U.S. and abroad, whether government-funded or commercially insured,
are developing a variety of increasingly sophisticated methods of controlling healthcare costs, including prospective reimbursement
and capitation programs, group purchasing, reducing benefit coverage, requiring second opinions prior to major surgery, negotiating
reductions to charges on patient bills, promoting healthier lifestyle initiatives and exploring more cost-effective methods of delivering
healthcare. These types of cost-containment programs, as well as legislative or regulatory changes to reimbursement policies, could
limit the amount which healthcare providers may be willing to pay for our medical devices.

Government Regulation and Other Matters

Our products and facilities are subject to regulation by numerous government agencies, including the FDA, European

Community Notified Bodies, and the Japanese Pharmaceuticals and Medical Devices Agency, to confirm compliance with the various
laws and regulations governing the development, testing, manufacturing, labeling, marketing, and distribution of our products. We are
also governed by federal, state, local, and international laws of general applicability, such as those regulating employee health and
safety, and the protection of the environment. Overall, the amount and scope of domestic and foreign laws and regulations applicable
to our business has increased over time.

United States Regulation

In the U.S., the FDA has responsibility for regulating medical devices under the authority of the Federal Food, Drug and
Cosmetic Act, or FFDCA. The FDA regulates design, development, testing, clinical studies, manufacturing, labeling, distribution,
import, export, sale promotion, and record keeping for medical devices, and reporting of adverse events, recalls, or other field actions
by manufacturers and users to identify potential problems with marketed medical devices. Many of the devices that we develop,
manufacture and market are in a category for which the FDA has implemented stringent clinical investigation and pre-market
clearance or approval requirements. The process of obtaining FDA clearance or approval to market a product is resource intensive,
lengthy, and costly. FDA review may involve substantial delays that adversely affect the marketing and sale of our products. A
number of our products are pending regulatory clearance or approval to begin commercial sales in various markets. Ultimately, the
FDA may not authorize the commercial release of a medical device if it determines the device is not safe and effective or does not
meet other standards for clearance or approval. Additionally, even if a product is cleared or approved, the FDA may require
postmarket testing and surveillance programs to monitor the effects of these products once commercialized.

The FDA has the authority to halt the distribution of certain medical devices, detain or seize adulterated or misbranded medical
devices, order the repair, replacement, or refund of the costs of such devices, or preclude the importation of devices that are or appear
to be violative. The FDA also conducts inspections to determine compliance with the QSR concerning the manufacturing and design
of devices and medical device reporting regulations, recall regulations, clinical testing regulations, and other requirements. The FDA
may withdraw product clearances or approvals due to failure to comply with regulatory standards, or the occurrence of unforeseen
problems following initial approval, and require notification of health professionals and others with regard to medical devices that
present unreasonable risks of substantial harm to the public health. Additionally, the failure to comply with FDA or comparable
regulatory standards or the discovery of previously unknown product problems could result in fines, delays, or suspensions of
regulatory clearances or approvals, seizures, injunctions, recalls, refunds, civil money penalties, or criminal prosecution. Our
compliance with applicable regulatory requirements is subject to continual review. Moreover, the FDA and several other U.S.
agencies administer controls over the export of medical devices from the U.S. and the import of devices into the U.S., which could
also subject us to sanctions for noncompliance.

Premarket Regulation

In the U.S., the FDA strictly regulates medical devices under the authority of the Federal Food, Drug and Cosmetic Act, or
FFDCA, and its regulations. The FDA classifies medical devices into one of three classes (Class I, II or III) based on the statutory

framework described in the FFDCA. Class III devices are typically life-sustaining, life-supporting or implantable devices, or new
devices that have not been found to be substantially equivalent to legally marketed devices. Class III devices must generally receive
PMA approval by the FDA before they may be marketed.

The PMA approval pathway requires that the applicant demonstrate to the FDA’s satisfaction, based on valid scientific

evidence, that there is a reasonable assurance of the safety and effectiveness of the device for its intended use. During the PMA
process, the FDA examines detailed data to assess the safety and effectiveness of the device. This information includes design,
development, manufacture, labeling, advertising, preclinical testing and clinical study data. Prior to approving a PMA, the FDA may
conduct an inspection of the manufacturing facilities and the clinical sites where supporting studies were conducted. The facility
inspection evaluates the company’s compliance with the QSR. An inspection of clinical sites evaluates compliance with good clinical
practice standards, including, for studies conducted under an investigational device exemption, or IDE, that the studies meet the
requirements of FDA’s IDE regulations. Typically, the FDA will convene an advisory panel meeting to review the data presented in
the PMA. The panel’s recommendation is given substantial weight, but is not binding on the FDA. Under a set of performance
measures that the FDA has committed to achieving in return for the receipt of user fees from manufacturers, FDA attempts to review
all PMAs not requiring an advisory panel meeting within 180 “FDA days” and review of a PMA application that does require an
advisory panel meeting within 320 “FDA days.” The term “FDA days” excludes the time the applicant spends responding to FDA
requests for additional information. While the FDA has approved PMA applications within the allotted time period, reviews can occur
over a significantly longer period. Upon completion of its review, FDA will either approve or deny the PMA.

If the FDA’s evaluation is favorable, the PMA is approved and the device may be marketed in the U.S. The FDA may approve a

PMA with post-approval conditions such as post-market collection of clinical data. Failure to comply with the conditions of approval
can result in material adverse enforcement action, including the loss or withdrawal of the PMA approval. A PMA approval may
include significant limitations on the indicated uses for which a device may be marketed. FDA interprets the FFDCA as prohibiting
the promotion of approved medical devices for unapproved uses. After approval of a PMA, a new PMA or PMA supplement is
required in the event of a significant modification to the device, the device labeling, or the manufacturing process. FDA can initiate
proceedings to withdraw a PMA approval for failure to comply with regulatory requirements or the occurrence of unforeseen
problems following initial marketing.

In March 2015, we received a PMA approval, from the FDA for use of the Impella 2.5 device in the U.S. during elective and

urgent high-risk percutaneous coronary intervention, or PCI, procedures. In December 2016, the FDA expanded this PMA approval in
the U.S. to include the Impella CP device. With these PMA indications, the Impella 2.5 and Impella CP devices provide the only
minimally invasive treatment options indicated for use during high-risk PCI procedures. In April 2016, the FDA approved a PMA
supplement for our Impella 2.5, Impella CP, Impella 5.0 and Impella LD devices to provide treatment for ongoing cardiogenic shock,
which occurs following heart attack or open heart surgery. The intent of the treatment is to reduce ventricular work and to provide the
circulatory support necessary to allow heart recovery and early assessment of residual myocardial function. We expect to make
additional PMA supplement submissions for additional indications for use for our Impella devices in the future.

When clinical trials of a device are required in order to obtain FDA approval, the sponsor of the trial is generally required to file
an IDE application before commencing the trials. The FDA reviews and must approve an IDE before a clinical study may begin in the
U.S. In addition, the clinical study must be approved by an Institutional Review Board, or IRB, for each clinical site. The FDA, an
IRB, or we may suspend a clinical trial at any time for various reasons, including if information emerges suggesting that the subjects
are being exposed to an unacceptable health risk. All clinical studies of investigational devices must be conducted in compliance with
FDA requirements. Following the completion of a study, the data from the study must be collected, analyzed and presented in an
appropriate submission to the FDA, either as a report submitted to the IDE file or in a marketing application such as a PMA.

In addition, certain medical devices can be approved by the FDA in the U.S. under an HDE rather than a PMA. In order for a
device to be eligible for an HDE, there must be a qualifying target patient population of less than 8,000 patients per year for which
there is no other comparable device available to treat the condition. In December 2016, the 21st Century Cures Act increased the
upper population limit for an HDE from 4,000 to 8,000. The FDA must agree that a device meets these criteria before it can be
approved under an HDE. FDA approval of an HDE also requires demonstration that the device is safe for its intended application, that
it is potentially effective, and that the probable benefits outweigh the associated risks. If another device receives approval through the
PMA process that addresses the same patient population as the HDE device, the HDE device may need to be withdrawn from the U.S.
market. An approved HDE authorizes sales of the device to any hospital after review and approval by the hospital’s IRB. Proposed
modifications to approved HDE devices, like modifications to approved PMA devices, require FDA approval through a new HDE
application or an HDE supplement.

In January 2015, we received FDA approval for the Impella RP heart pump under an HDE to provide circulatory assistance for

up to 14 days in patients who develop acute right heart failure or decompensation after left ventricular assist device implantation,

myocardial infarction, heart transplant, or open-heart surgery. Impella RP is the first percutaneous single access heart pump designed
for right heart support to receive FDA approval. As part of the HDE approval, we were required to conduct post approval studies for
the Impella RP device. We have completed our Impella RP post-market studies and are currently working on a PMA application with
the FDA to convert our HDE approval to a PMA approval.

Postmarket Regulation

The medical devices that we manufacture and distribute pursuant to regulatory clearances or approvals by the FDA and other

countries’ regulatory authorities are subject to continuing regulation by those agencies. The FDA reviews design, manufacturing, and
distribution practices, labeling and record keeping, and manufacturers’ required reports of adverse experience and other information to
identify potential problems with marketed medical devices. Among other FDA requirements, we must comply with the FDA’s good
manufacturing practice regulations for medical devices, known as QSR. These regulations govern the methods used in, and the
facilities and controls used for, the design, testing, manufacture, packaging, labeling, storage, installation, and servicing of all finished
medical devices intended for human use. We must also comply with Medical Device Reporting, or MDR requirements, which require
us to report to the FDA any incident in any of our products that may have caused or contributed to a death or serious injury, including
medical intervention to prevent a death or serious injury, or in which any of our products malfunctioned and, if such malfunction were
to recur, would be likely to cause or contribute to a death or serious injury. Labeling, advertising, and promotional activities are
subject to scrutiny by the FDA and, in certain circumstances, by the Federal Trade Commission. FDA’s enforcement policy
prohibiting the marketing of approved medical devices for unapproved uses. We are subject to routine inspection by the FDA for
compliance with the QSR and MDR requirements, as well as other applicable regulations. If the FDA were to conclude that we are not
in compliance with applicable laws or regulations, or that any of our medical devices are ineffective or pose an unreasonable health
risk, the FDA could ban such medical devices, detain or seize adulterated or misbranded medical devices, order a recall, repair,
replacement, or refund of such devices, and require us to notify health professionals and others that the devices present unreasonable
risks of substantial harm to the public health. The FDA may also seek a judicial injunction enjoining certain violations of the FFDCA
and imposing operating restrictions and assess civil or criminal fines and penalties against our officers, employees, or us. The FDA
may also recommend criminal prosecution to the U.S. Department of Justice. Regulatory authorities outside the U.S. enforce similar
laws and regulations within their respective jurisdictions.

The FDA and other regulatory agencies actively enforce regulations prohibiting promotion of off-label uses and the promotion

of products for which marketing clearance has not been obtained. If the FDA or another regulatory agency determines that our
promotional materials or training constitutes promotion of an unapproved use, it could request that we modify our training or
promotional materials or subject us to regulatory enforcement actions, including the issuance of a warning letter, injunction, seizure,
civil fine and criminal penalties. Although our policy is to refrain from statements that could be considered off-label promotion of our
products, the FDA or another regulatory agency could disagree and conclude that we have engaged in off-label promotion.

On April 25, 2014, we received an administrative subpoena from the Boston regional office of the U.S. Department of Health
and Human Services, or HHS, Office of Inspector General requesting materials relating to our reimbursement of employee expenses
and remuneration to healthcare providers from July 2012 through December 2012, in connection with a civil investigation under the
False Claims Act (the “FCA Investigation”). Subsequently, we received Civil Investigative Demands from the U.S. Attorney’s Office
for the District of Massachusetts that collectively sought additional information relating to this matter for the time period of January 1,
2011 through September 14, 2016. We continue to cooperate fully with the government in this investigation and are exploring various
ways to resolve this matter with the government. We are not able to predict what action, if any, might be taken in the future as a result
of the investigation, or the potential impact to our financial position.

The FDA can require post-market surveillance, or PMS, for significant risk devices, such as our medical devices, that require

ongoing collection, analysis, and periodic submission to the FDA of clinical data during commercialization over a period of up to
several years. The PMS data collection requirements are often burdensome and expensive. The failure to comply with the FDA’s
regulations can result in enforcement action, including seizure of products, injunction, prosecution, civil fines and penalties, recall
and/or suspension of FDA approval.

The FDA, in cooperation with U.S. Customs and Border Protection, or CBP, administers controls over the import and export of
medical devices into and out of the U.S. International sales of our medical devices that have not received FDA approval are therefore
subject to FDA export requirements. The CBP imposes its own regulatory requirements on the import of medical devices, including
inspection and possible sanctions for noncompliance.

We are also subject to additional laws and regulations that govern our business operations, products, and technologies,

including:



federal, state, and foreign anti-kickback laws and regulations, which generally prohibit payments and other financial
benefits to physicians or other purchasers of medical products as an inducement to purchase a product;

the Stark law, which prohibits physicians from referring Medicare patients to a provider that bills this program for the
provision of certain designated health services if the physician (or a member of the physician's immediate family) has a
financial relationship with that provider, subject to numerous specific exemptions;

federal and state laws and regulations that protect the confidentiality of certain patient health information, including
patient records, and restrict the use and disclosure of such information, in particular, the Health Insurance Portability and
Accountability Act of 1996, or HIPAA;

the Physician Payments Sunshine Act, or PPSA, which requires public disclosure of the financial relationships of United
States physicians and teaching hospitals with applicable manufacturers, including medical device, pharmaceutical, and
biologics companies;

the False Claims Act, or FCA, which prohibits the submission of false or otherwise improper claims for payment to a
federally funded health care program, and health care fraud statutes that prohibit false statements and improper claims to
any third-party payer; and may be enforced through whistleblower or ‘qui tam’ lawsuits filed by private individuals, and

the U.S. Foreign Corrupt Practices Act, or FCPA, which can be used to prosecute companies in the U.S. for arrangements
with foreign government officials or other parties outside the U.S.

Failure to comply with these laws and regulations could result in criminal liability, significant fines or penalties, negative

publicity, and substantial costs and expenses associated with investigation enforcement activities, and individual settlement
agreements that impose a government monitor for a period of several years. To assist in our compliance efforts, we adhere to many
codes of ethics and conduct regarding our sales and marketing activities in the United States and other countries in which we operate,
including the ABIOMED code of Conduct and Compliance Policy.

International Regulation

Internationally, the approval and regulation of medical devices is subject to a variety of laws and regulation. In Europe, our
products are subject to extensive regulatory requirements. Our Impella 2.5, Impella 5.0, Impella LD, Impella CP, Impella RP, and AIC
are all approved under CE Mark and are available for sale in the European Union. The European Union requires that medical devices
may only be placed on the market if they do not compromise safety and health when properly installed, maintained, and used in
accordance with their intended purpose. National laws conforming to the European Union's legislation regulate our products under the
medical devices regulatory system. Although the more variable national requirements under which medical devices were formerly
regulated have been substantially replaced by the European Union Medical Devices Directive, individual nations can still impose
unique requirements that may require supplemental submissions. The European Union medical device laws require manufacturers to
declare that their products conform to the essential regulatory requirements after which the products may be placed on the market
bearing the CE Mark. Manufacturers' quality systems for products in all but the lowest risk classification are also subject to
certification and audit by an independent notified body. In Europe, particular emphasis is being placed on more sophisticated and
faster procedures for the reporting of adverse events to the competent authorities.

In Japan, pre-market approval and clinical studies are required as is governmental pricing approval for medical devices.

Clinical studies are subject to a stringent "Good Clinical Practices" standard. Approval time frames from the Japanese Ministry of
Health, Labour and Welfare vary from simple notifications to review periods of one or more years, depending on the complexity and
risk level of the device. In addition, importation of medical devices into Japan is subject to the "Good Import Practices" regulations.
As with any highly regulated market, significant changes in the regulatory environment could adversely affect future sales. In
September 2016, we received PMDA approval from the Japanese Ministry of Health, Labour & Welfare for our Impella 2.5 and
Impella 5.0 heart pumps to provide treatment of drug-resistant acute heart failure in Japan. We are preparing for the market launch in
Japan, including working with Japanese government authorities to obtain reimbursement for these products.

In many of the other foreign countries in which we market our products, we may be subject to regulations affecting, among

other things:



product standards and specifications;

packaging requirements;

labeling requirements;

product collection and disposal requirements;

quality system requirements;

import restrictions;

tariffs;

duties; and

tax requirements.

Many of the regulations applicable to our devices and products in these countries are similar to those of the FDA. In some

countries, the level of government regulation of medical devices is increasing, which can lengthen time to market and increase
registration and approval costs. In many countries, the national health or social security organizations require our products to be
qualified before they can be marketed and considered eligible for reimbursement.

Health Care Initiatives

Government and private sector initiatives to limit the growth of health care costs, including price regulation and competitive
pricing, coverage and payment policies, comparative effectiveness reviews, technology assessments, and managed-care arrangements,
are continuing in many countries where we do business, including the U.S., Europe, and Japan. As a result of these changes, the
marketplace has placed increased emphasis on the delivery of more cost-effective medical therapies. For example, government
programs, private health care insurance, and managed-care plans have attempted to control costs by restricting coverage and limiting
the level of reimbursement for procedures or treatments, and some third-party payers require their pre-approval before new or
innovative devices or therapies are utilized by patients. These various initiatives have created increased price sensitivity over medical
products generally and may impact demand for our products and technologies.

The delivery of our products is subject to regulation by the HHS in the U.S. and comparable state and foreign agencies

responsible for reimbursement and regulation of health care items and services. Foreign governments also impose regulations in
connection with their health care reimbursement programs and the delivery of health care items and services. Reimbursement
schedules regulate the amount the U.S. government will reimburse hospitals and doctors for the inpatient care of persons covered by
Medicare. CMS may also review whether and/or under what circumstances a procedure or technology is reimbursable for Medicare
beneficiaries. Changes in current reimbursement levels could have an adverse effect on market demand and our pricing flexibility.

Health care cost containment efforts have also prompted domestic hospitals and other customers of medical device

manufacturers to consolidate into larger purchasing groups to enhance purchasing power, and this trend is expected to continue. The
medical device industry has also experienced some consolidation, partly in order to offer a broader range of products to large
purchasers. As a result, transactions with customers are larger, more complex, and tend to involve more long-term contracts than in the
past. These larger customers, due to their enhanced purchasing power, may attempt to increase the pressure on product pricing.

Health Care Reform

In March 2010, the U.S. Congress enacted the Patient Protection and Affordable Care Act and the Health Care and Education
Reconciliation Act, or together, the Affordable Care Act (“ACA”). The law includes provisions that, among other things, reduce or
limit Medicare reimbursement, mandate that all individuals have health insurance (with limited exceptions) and impose increased
taxes. Specifically, the law requires the medical device industry to subsidize healthcare reform in the form of a medical device excise
tax on United States sales of most medical devices beginning in 2013. We began paying the medical device excise tax in January
2013.

In December 2015, the Protecting Americans from Tax Hikes Act of 2015 (“PATH Act”) was implemented, which suspended
the medical device excise tax implemented as part of the Affordable Care Act for a two-year period through December 31, 2017. The
suspension has had a positive impact on our operating expenses for fiscal years 2016 and 2017, but is scheduled to resume beginning
in January 2018. Additionally, the PATH Act permanently extended the research and development tax credit.

In December 2016, legislation was signed into law that, among other things, increases funding for medical research and eases the

development and approval of experimental treatments. Known as the 21st Century Cures Act, the law also provides new funding for
the National Institutes of Health and the FDA. A notable impact from this new law is an increase in the upper population limit for
an HDE from 4,000 to 8,000. Although it will take some time to be fully implemented, the 21st Century Cures Act could help
accelerate the discovery, development, and delivery of medical advancements to ensure more timely access to new treatments and
cures for patients in need.

Initiatives to repeal the ACA, in whole or in part, to delay elements of implementation or funding, and to offer amendments or
supplements to modify its provisions have been persistent and have increased as a result of the 2016 election. The ultimate outcomes
of legislative attempts to repeal or amend the ACA and legal challenges to the ACA are unknown. Results of recent Congressional
elections and the change of presidential administrations beginning in 2017 have created a political environment in which substantial
portions of the ACA could be repealed or revised. HHS has delayed the implementation of regulations that would have placed at risk,
based on health outcomes, portions of Medicare payment to hospitals, physicians, and related healthcare providers for certain cardiac
procedures. On May 4, 2017, the United States House of Representatives voted to pass the American Health Care Act (and thereby
repeal much of the ACA) by a narrow margin of 217 to 213, sending the bill to the Senate for deliberation. The Senate has indicated
they will write their own version of the bill, instead of voting on the House version. It remains unclear what portions of the ACA may
remain, or what any replacement or alternative programs may be created by any future legislation.

Other Regulations

We are also subject to various international, federal, state and local laws and regulations relating to such matters as safe working

conditions, laboratory and manufacturing practices and the use, handling and disposal of hazardous or potentially hazardous
substances used in connection with our research and development and manufacturing activities. Specifically, the manufacture of our
biomaterials is subject to compliance with federal environmental regulations and by various state and local agencies. Although we
believe we are in compliance with these laws and regulations in all material respects, we cannot provide assurance that we will not be
required to incur significant costs to comply with these and other laws or regulations in the future.

Seasonality

Our quarterly net sales are influenced by many factors, including new product introductions, acquisitions, regulatory approvals,

patient and physician holiday schedules, and other factors. Net sales in the first half of our fiscal year are typically lower than the
second half of our fiscal year due to the seasonality of the U.S. and European markets, where summer vacation schedules normally
result in fewer medical procedures.

Employees

As of March 31, 2017, we had 908 full-time employees, including:



179 in product engineering, research and development, clinical development and regulatory;

398 in sales, clinical support, marketing, field service and related support;

247 in manufacturing; and

84 in general and administration.

We routinely enter into contractual agreements with our employees, which typically include confidentiality and non-competition

commitments. Our employees are not represented by unions. We consider our employee relations to be good. If we were unable to
attract and retain qualified personnel in the future, our operations could be negatively impacted.

ITEM 1A. RISK FACTORS

Investing in our common stock involves a high degree of risk. Before making an investment decision, you should carefully
consider these risks as well as the other information we include or incorporate by reference in this report, including our consolidated
financial statements and the related notes. The risks and uncertainties we have described are not the only ones we face. If any of these
risks materialize, the trading price of our common stock could fall and you could lose all or part of your investment.

This section includes or refers to forward-looking statements. You should read the explanation of the qualifications and

limitations of such forward-looking statements discussed at the beginning of the report.

Risks Related to Our Business

We depend on Impella® products for a significant portion of our revenues.

We derive, and expect to continue to derive in the near future, almost all of our revenues from sales of our Impella devices.

While we cannot fully predict what level of revenues our Impella devices will generate, we anticipate that Impella product sales will
continue to account for a significant portion of our revenues in the foreseeable future. Implementation of our business strategy
depends on continued sales of our Impella devices. Our ability to generate sales of our Impella devices may be impaired by the factors
described below:



our failure to obtain approvals from the FDA and foreign regulatory authorities or to comply with government regulations,
or the withdrawal of market clearance or the taking of other enforcement actions that could limit or impair our ability to
sell our products;

lack of acceptance or continued acceptance by physicians;

our reliance on specialized suppliers for certain components and materials;

manufacturing or quality control problems;

our inability to protect our proprietary technologies or an infringement of others’ patents;

the loss of a distributor or a distributor’s failure to perform its obligations;

our failure to compete successfully against our existing or potential competitors;

additional risks associated with selling in international markets;

long and variable sales and deployment cycles;

failure by third-party payers to provide appropriate levels of reimbursement for hospitals and physicians using our
products;

our failure to comply with federal and state regulations; and

product liability claims.

If we fail to compete successfully against our existing or potential competitors, our sales or operating results may be harmed.

Competition from other companies offering circulatory care products is intense and subject to rapid technological change and

evolving industry requirements and standards. We compete with companies that have substantially greater or broader financial,
product development, sales and marketing resources and experience than we do. Our ability to compete effectively depends upon our
ability to distinguish our company and our products from our competitors and their products. Factors affecting our competitive
position include:



the availability of other products and procedures that are technically equivalent or superior to our products, and which
may be sold at lower prices;

product performance and design;

product safety;

sales, marketing and distribution capabilities;

comparable clinical outcomes;

success and timing of new product development and introductions;

physician and hospital acceptance of our products;

penetration into existing and new geographic markets; and

intellectual property protection.

Our customers are primarily hospitals that have limited budgets. As a result, our products compete against a broad range of
medical devices and other therapies for these limited funds. Our success will depend in large part upon our ability to enhance our
existing products, to develop new products to meet regulatory and customer requirements and to achieve market acceptance for our

products. We believe that important competitive factors with respect to the development and commercialization of our products
include the relative speed with which we can develop products, establish clinical utility, complete clinical trials and regulatory
approval processes, obtain and protect reimbursement, maintain cost effectiveness for our products, and supply commercial quantities
of our products to our customers.

Advances in medical technology, biotechnology and pharmaceuticals may reduce the size of the potential markets for our
products or render our products obsolete. We are aware of other heart replacement device research efforts in the U.S., Canada, Europe
and Japan. In addition, there are a number of companies; including Getinge (Maquet Cardiovascular), Abbott Laboratories, Medtronic,
Edwards Lifesciences, CardiacAssist, Terumo Heart, Inc., Teleflex, Inc. and several early-stage companies, that are developing heart
assist products, including implantable left ventricular assist devices and miniaturized rotary ventricular assist devices that directly and
indirectly compete with our products.

If we do not effectively manage our growth, we may be unable to successfully develop, market and sell our products.

Our future revenue and operating results will depend on our ability to manage the anticipated growth of our business. We have

experienced significant growth in recent years in the scope of our operations and we have increased our employee headcount. This
growth has placed significant demands on our management as well as our financial and operations resources. In order to achieve our
business objectives, we will need to continue to grow. However, continued growth presents numerous challenges, including:



developing our global sales, marketing and administrative infrastructure and capabilities;

expanding manufacturing capacity, maintaining quality and increasing production;

increasing our foreign and domestic regulatory compliance capabilities;

implementing appropriate operational, financial and IT systems and internal controls;

identifying, attracting and retaining qualified personnel, particularly experienced clinical staff; and

hiring, training, managing and supervising our personnel worldwide.

Any failure to manage our growth effectively could impede our ability to successfully develop, market and sell our products,

which could seriously harm our business.

The demand for our products and products under development is unproven, and we may be unable to successfully commercialize
our products.

Our products and products under development may not enjoy commercial acceptance or success, which could adversely affect
our business and operational results. We need to create markets for our Impella devices and other existing products, as well as other
new or future products, including achieving market acceptance among physicians, hospitals, patients and third-party payers. In
particular, we need to gain acceptance of our Impella devices among interventional cardiologists and heart surgeons. The obstacles we
will face in trying to create successful commercial markets for our products include:



limitations inherent in first-generation devices, and our potential inability to develop successive improvements, including
increases in service life and improvements in the ease of use of our products;

introduction by other companies of new treatments, products and technologies that compete with our products;

timing and amount of reimbursement for these products, if any, by third-party payers;

potential reluctance of clinicians and hospitals to obtain and support adequate training to use our products;

cost of our products; and

potential reluctance of physicians, patients and society as a whole to accept medical devices that replace or assist the heart
and risk of mechanical failure inherent in such devices.

If we fail to obtain and maintain necessary governmental approvals for our products and indications, we may be unable to market
and sell our products in certain jurisdictions.

Medical devices such as ours are extensively regulated by the FDA in the U.S. and by other federal, state, local and foreign
authorities. Governmental regulations relate to the testing, development, manufacturing, labeling, design, sale, promotion, distribution,
importing, exporting and shipping of our products. In the U.S., before we can market a new medical device, or a new use of, or claim
for, or significant modification to, an existing product, we must generally first receive PMA approval from the FDA. This process can

be expensive and lengthy and entail significant expenses, primarily related to clinical trials. It generally takes between one to three
years to receive approval, or even longer, from the time the PMA application is submitted to the FDA. Regulatory clearances or
approvals, either foreign or domestic, may not be granted on a timely basis, if at all. If we are unable to obtain regulatory approvals or
clearances for use of our products under development, or if the patient populations for which they are approved are not sufficiently
broad, the commercial success of these products could be limited. The FDA may also limit the claims that we can make about our
products. Our medical devices are now subject to the PMA and HDE processes. In December 2012, as part of an initiative to review
regulatory requirements for certain Class III devices, an FDA panel voted to recommend continuation of Class III status for temporary
ventricular support devices within the non-roller type cardiopulmonary bypass blood pumps category, which includes our Impella
devices. PMA or HDE approval requires that any significant modifications to the design, materials, or intended use of those devices
require FDA approval through PMA or HDE supplemental applications, and our devices will be subject to more burdensome
regulatory reporting requirements than they had been under 510(k) clearance.

If we do not receive FDA approval or clearance for one or more of our products, we will be unable to market and sell those

products in the U.S., which would have a material adverse effect on our operations and prospects.

We also market or are beginning to market our products in international markets, including the European Union, Canada, and
Japan. Regulatory approval processes differ among those jurisdictions and approval in the U.S. or any other single jurisdiction does
not guarantee approval in any other jurisdiction. Obtaining foreign approvals could involve significant delays, difficulties and costs for
us and could require additional clinical trials.

If the FDA or another regulatory or enforcement agency determines that we have promoted or products for one or more off-label
uses, we may be subject to various penalties, including civil or criminal penalties.

The FDA, the U.S. Department of Justice, the Office of the Inspector General of Department of Health and Human Services,
and other regulatory or enforcement agencies actively enforce regulations prohibiting the promotion of unapproved medical devices
and the promotion of otherwise approved or cleared medical devices for unapproved uses. If any such agency determines that our
promotional materials or training constitutes promotion of an unapproved use, it could request that we modify our training or
promotional materials or subject us to regulatory enforcement actions, including the issuance of a warning letter, injunction, seizure,
civil fine and criminal penalties. Although our policy is to refrain from statements that could be considered off-label promotion of our
products, such agencies could disagree and conclude that we have engaged in off-label promotion.

To the extent a regulatory agency commences such an investigation in the future; we may not be able to resolve that matter,

without incurring penalties or facing significant consequences. Even if we are successful in resolving such a matter without incurring
penalties, responding to a subpoena or other government inquest could result in substantial costs and could significantly and adversely
impact our reputation and divert management’s attention and resources, which could have a material adverse effect on our business,
operating results, financial condition and ability to finance our operations.

Off-label use of our products may result in injuries that lead to product liability suits, which could be costly to our business.

The use of our products outside their approved indications for use, or “off-label use,” may increase the risk of injury to patients.
Clinicians may use our products for off-label uses, as the FDA does not restrict or regulate a clinician’s choice of treatment within the
practice of medicine. Off-label use of our products may increase the risk of product liability claims against us. Product liability claims
are expensive to defend and could divert our management’s attention and result in substantial damage awards against us.

Unsuccessful clinical trials or procedures relating to products under development could have a material adverse effect on our
prospects.

The regulatory approval process for new products and new indications for existing products often requires extensive clinical

trials and procedures, including early clinical feasibility studies. Unfavorable or inconsistent clinical data from current or future
clinical trials or procedures conducted by us, our competitors, or third parties, or perceptions regarding such clinical data, could
adversely affect both our ability to obtain necessary approvals and the market’s view of our future prospects. Such clinical trials and
procedures are inherently uncertain and there can be no assurance that these clinical trials or procedures will be completed in a timely
or cost-effective manner or result in a commercially viable product or expanded indication. Failure to successfully complete these
clinical trials or procedures in a timely and cost-effective manner could have a material adverse effect on our prospects. Clinical trials
or procedures may experience significant setbacks even after earlier trials have shown promising results. Further, preliminary results
from clinical trials or procedures may be contradicted by subsequent clinical analysis. In addition, results from our clinical trials or
procedures may not be supported by actual long-term studies or clinical experience. If preliminary clinical results are later
contradicted, or if initial results cannot be supported by actual long-term studies or clinical experience, our business could be
adversely affected. Clinical trials or procedures may be delayed, suspended, or terminated by us, the FDA, or other regulatory

authorities at any time, if it is believed that the trial participants face unacceptable health risks for numerous other reasons. The FDA
may disagree with our interpretation of the data from our clinical trials, or may find the clinical trial design, conduct or results
inadequate to demonstrate safety and effectiveness of the product candidate. The FDA may also require additional pre-clinical studies
or clinical trials which could further delay approval of our products.

Our products are subject to extensive regulatory requirements, including continuing regulatory review, which could affect the
manufacturing and marketing of our products.

The FDA and other regulatory agencies continue to review products even after they have received initial approval. If and when

the FDA or another regulatory agency clears or approves our products under development, the manufacture and marketing of these
products will be subject to continuing regulation, post approval clinical studies, including compliance with the FDA’s adverse event
reporting requirements, prohibitions on promoting a product for unapproved uses, and Quality System Regulation, or QSR,
requirements, which obligate manufacturers, including third-party and contract manufacturers, to adhere to stringent design, testing,
control, documentation and other quality assurance procedures during the design and manufacture of a device.

Any modification to an FDA approved device that could significantly affect its safety or effectiveness, or that would constitute a

major change in its intended use, requires a supplemental PMA or HDE approval. The FDA requires each manufacturer to determine
in the first instance whether a modification requires approval, but the FDA may review and potentially disagree with any such
decision. Modifications of this type are common with new products. We anticipate that the first generation of each of our products will
undergo a number of changes, refinements, enhancements and improvements over time. If the FDA requires us to seek approval for
modification of a previously approved product for which we have concluded that new clearances or approvals are unnecessary, we
may be required to cease marketing or to recall the modified product until we obtain clearance or approval and we may be subject to
significant regulatory fines or penalties, which could have a material adverse effect on our financial results and competitive position.
We also cannot assure you that we will be successful in obtaining clearances or approvals for our modifications, if required. We and
our third-party suppliers of product components are also subject to inspection and market surveillance by the FDA and other
regulatory agencies for QSR and our regulatory other requirements, the interpretation of which can change. Compliance with QSR and
similar legal requirements can be difficult and expensive. Enforcement actions resulting from failure to comply with government
requirements could result in fines, suspensions of approvals or clearances, recalls or seizure of products, operating restrictions or
shutdown, and criminal prosecutions that could adversely affect the manufacture and marketing of our products. The FDA or another
regulatory agency could withdraw a previously approved product from the market upon receipt of newly discovered information,
including a failure to comply with regulatory requirements, the occurrence of unanticipated safety problems of other defects in
products following approval, or other reasons, which could adversely affect our operating results.

Even after receiving regulatory clearance or approval, our products may be subject to product recalls which could harm our
reputation and divert our managerial and financial resources.

The FDA and similar governmental authorities in other countries have the authority to order mandatory recall of our products or

order their removal from the market if the government finds that our products might cause adverse health consequences or death. A
government-mandated or voluntary recall by us could occur as a result of component failures, manufacturing errors by us or our
suppliers or design defects, including labeling defects, or unanticipated safety problems. We have in the past initiated voluntary recalls
for some of our products and we could do so in the future. Any recall of our products may harm our reputation with customers and
divert managerial and financial resources.

We depend on third-party reimbursement to our customers for market acceptance of our products. If third-party payers fail to
provide coverage and appropriate levels of reimbursement for the medical procedures in which our products are used, our sales
and profitability would be adversely affected.

Sales of medical devices largely depend on the reimbursement of patients’ medical expenses by government healthcare
programs and private health insurers. Without the financial support of government reimbursement or third-party insurers’ payments
for patient care, the market for our products will be limited. Medical products and devices incorporating new technologies are closely
examined by governments and private insurers to determine whether the products and devices will be covered by reimbursement, and
if so, the level of reimbursement which may apply.

In October 2016, the American Hospital Association (AHA) Coding Clinic publication confirmed MS-DRG 215, Heart Assist

side heart support known as bi-ventricular and removal in MS-DRG 1-2, and; 4) hospitals receiving transferred patients with removal
of the device in MS-DRG 268-269. In prior years, Impella was primarily reimbursed in only one category of MS-DRGs 216-
221. The AHA and Centers for Medicare and Medicaid Services (CMS) have facilitated a system of care around the utilization of
percutaneous heart pumps for the catheterization lab, ICU support, and transfer of patients to specialized centers. This progress also
represents the expansion of Impella FDA indications for High Risk PCI, AMI Cardiogenic Shock, and bi-ventricular support.

In April 2017, the CMS released a proposed set of hospital payment levels for patient discharges after October 1, 2017. The
Proposed Rule for the Inpatient Prospective Payment System is open for public comment until June 13, 2017. Under the proposed
rule, all discharges prior to October 1, 2017 are to remain under the current payment levels, and the final rulemaking is expected to be
released in August 2017. The text of the Proposed Rule did not include any changes to payment, coding or MS-DRG assignments for
Impella, percutaneous heart assist, or related technology. However, data tables also released with the Proposed Rule include changes
for all MS-DRGs which included a proposed reduction for MS-DRG 215 of 34.8%. The remaining MS-DRG categories have
proposed changes ranging from -7% to +3.5%. Even if the rule is finalized as proposed, all current MS-DRG rates will remain in place
until October 2017.

We cannot be sure that additional third-party payers will cover and/or adequately reimburse use of our products or other

products under development, to enable us to sell them at profitable prices.

In addition, third-party payers increasingly are requiring evidence that medical devices are cost-effective and if we are unable to

meet this requirement, the third-party payer may not reimburse the use of our products, which could reduce sales of our products to
healthcare providers who depend upon reimbursement for payment. We also cannot be sure that third-party payers will continue the
current levels of reimbursement to physicians and medical centers for use of our products. Any reduction in the amount of this
reimbursement could harm our business. Increasing awareness of healthcare costs, public interest in healthcare reform and continuing
pressure from Medicare, Medicaid, group purchasing organizations and other payers to reduce costs in the healthcare industry, as well
as increasing competition from other protective products, could make it more difficult for us to sell our products at current prices.

Changes in healthcare reimbursement systems in the U.S. and abroad could reduce our revenues and profitability.

In March 2010, the U.S. federal government enacted the Affordable Care Act, or ACA, which made changes to the manner in
which many healthcare services are provided and paid for in the U.S. The ACA includes provisions that, among other things, reduce
or limit Medicare reimbursement, require all individuals to have health insurance (with limited exceptions) and impose increased taxes
on certain companies and individuals. Results of the recent U.S. elections in 2016 have created a political environment in which
substantial portions of the ACA could be repealed or revised. It remains unclear what portions of the ACA may remain, or what any
replacement or alternative programs may be created by any future legislation. Any such future repeal or replacement may have
significant impact on the reimbursement for healthcare services generally, including reducing significantly the number of Americans
who have health insurance, which could lead our health care provider customers to be more cost conscious. Accordingly, our business
and results of operations could therefore be adversely affected by any future federal or state healthcare reform legislation.

Internationally, medical reimbursement systems vary significantly from country to country, with some countries limiting
medical centers spending through fixed budgets, regardless of levels of patient treatment, and other countries requiring application for,
and approval of, government or third-party reimbursement. Even if we succeed in bringing our new products to market, uncertainties
regarding future healthcare policy, legislation and regulation, as well as private market practices, could affect our ability to sell our
products in commercially acceptable quantities at profitable prices in certain countries.

We must comply with healthcare “fraud and abuse” laws, and we could face substantial penalties for non-compliance and be
excluded from government healthcare programs, which would adversely affect our business, financial condition and results of
operations.

Certain federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights may be applicable to
our business. We may be subject to healthcare fraud and abuse regulation and patient privacy regulation by both the federal
government and the states in which we conduct our business. The laws and regulations that govern our business operations, products,
and technologies, and may affect our ability to operate include:



federal, state, and foreign anti-kickback laws and regulations, which generally prohibit payments to physicians or other
purchasers of medical products as an inducement to purchase a product;



the Stark law, which prohibits physicians from referring Medicare or Medicaid patients to a provider that bills these
programs for the provision of certain designated health services if the physician (or a member of the physician's
immediate family) has a financial relationship with that provider;
federal and state laws and regulations that protect the confidentiality of certain patient health information, including
patient records, and restrict the use and disclosure of such information, in particular, the Health Insurance Portability and
Accountability Act of 1996, or HIPAA;
the Physician Payments Sunshine Act, or PPSA, which requires public disclosure of the financial relationships of U.S.
physicians and teaching hospitals with applicable manufacturers, including medical device, pharmaceutical, and biologics
companies;
the False Claims Act, or FCA, which prohibits the submission of false or otherwise improper claims for payment to a
federally funded health care program, and health care fraud statutes that prohibit false statements and improper claims to
any third-party payer; and
the U.S. Foreign Corrupt Practices Act, or FCPA, which can be used to prosecute companies in the U.S. for arrangements
with foreign government officials or other parties outside the U.S.

Failure to comply with these laws and regulations could result in criminal liability, significant fines or penalties, negative

publicity, and substantial costs and expenses associated with investigation, enforcement activities, and individual settlement
agreements that impose a government monitor for a period of several years. To assist in our compliance efforts, we adhere to many
codes of ethics and conduct regarding our sales and marketing activities in the United States and other countries in which we operate.

Our future success depends in part on the development of new circulatory assist products, and our development efforts may not be
successful.

We are devoting most of our research and development and regulatory efforts, and significant financial resources, to the

development of our Impella devices and product extensions of existing commercial products and new products. In July 2014, we
acquired ECP, a German company engaged in the research, development, prototyping and pre-serial production of a percutaneous
expandable catheter pump which increases blood circulation from the heart with an external drive shaft. The development of new
products and product extensions presents enormous challenges in a variety of areas, including blood compatible surfaces, blood
compatible flow, manufacturing techniques, pumping mechanisms, physiological control, energy transfer, anatomical fit and surgical
techniques. We may be unable to overcome all of these challenges, which could adversely affect our results of operations and
prospects and limit our ability to bring new products to market.

The commercial success of our products will require acceptance by heart surgeons and interventional cardiologists, a limited
number of whom have significant influence over medical device selection and purchasing decisions.

We may achieve our business objectives only if our products are accepted and recommended by leading cardiovascular surgeons
and interventional cardiologists, whose decisions are likely to be based on a determination that our products are safe and cost-effective
and represent acceptable methods of treatment. Although we have developed relationships with leading cardiac surgeons, the
commercial success of Impella and our other products will require that we also develop relationships with leading interventional
cardiologists in cath labs. We cannot assure you that we can maintain our existing relationships and arrangements or that we can
establish new relationships in support of our products. If cardiovascular surgeons and interventional cardiologists do not consider our
products to be adequate for the treatment of our target cardiac patient population or if a sufficient number of these clinicians
recommend and use competing products, it would seriously harm our business.

Expansion into hospital cardiac centers that have not historically used our products may incur long sales and training cycles that
may cause our product sales and operating results to vary significantly from quarter-to-quarter.

Our products have lengthy sales cycles and we may incur substantial sales and marketing expenses and expend significant effort

without making a sale. We sell primarily to hospitals that often have administrative requirements to introduce and expand a new

technology, such as Impella, at their sites. Even after making the decision to purchase our Impella devices, our customers often deploy
our products slowly or infrequently. In addition, cardiac centers that buy the majority of our products are usually led by cardiac
surgeons who are heavily recruited by competing hospitals or by hospitals looking to increase their profiles. When one of these
cardiac surgeons moves to a new hospital, we sometimes experience a temporary but significant reduction in purchases by the hospital
from which the physician has departed while it replaces the lead physician supporting our Impella devices. As a result, our product
sales and operating results may vary significantly from quarter to quarter. In addition, product purchases often lag initial expressions
of interest in our product by new centers as training and education regarding the use of the products and as well as internal hospital
administrative procedures are typically required prior to the initial implant procedures.

The training required for clinicians to use our products could reduce the market acceptance of our products and reduce our
revenue.

Clinicians must be trained to use our products proficiently. It is critical to the success of our business that we ensure that there

are a sufficient number of clinicians familiar with, trained on and proficient in the use of our products. Convincing clinicians to
dedicate the time and energy necessary to obtain adequate training in the use of our products is challenging and we may not be
successful in these efforts. If clinicians are not properly trained, they may misuse or ineffectively use our products. Any improper use
of our products may result in unsatisfactory outcomes, patient injury, negative publicity or lawsuits against us, any of which could
harm our reputation and affect future product sales. Furthermore, our inability to educate and train clinicians to use our products may
lead to lower demand for our products.

If we are unable to develop additional, high-quality manufacturing capacity, our growth may be limited and our business could be
seriously harmed.

To be successful, we believe we will need to increase our manufacturing capacity to support continued demand for our products.

We may encounter difficulties in scaling up manufacturing of our products, including problems related to product yields, quality
control and assurance, component and service availability, dependable sources of supply, adequacy of internal control policies and
procedures and lack of skilled personnel. If we cannot hire, train and retain enough experienced and capable scientific and technical
workers, we may not be able to manufacture sufficient quantities of our existing or future products on-time and at an acceptable cost,
which could limit market acceptance of our products or otherwise damage our business. In order for our manufacturing to meet the
expected demand for our Impella devices, we have been implementing process improvements on the Impella production line at our
manufacturing facilities in Aachen, Germany and Danvers, Massachusetts to increase the output that we can produce at the facility. In
addition to programs designed to further increase yield and capacity levels, we have expanded manufacturing employment in Aachen
and Danvers and have increased manufacturing floor space in Danvers and Aachen. We have relocated selected Impella sub-assembly
production to our manufacturing facility in Danvers, Massachusetts and with third party suppliers and established additional
production of the Impella CP device in Danvers to support manufacturing at our main Impella production facility in Aachen. We
continue to work on initiatives to expand our Impella manufacturing capacity in both Aachen and Danvers. We are also working with
our existing suppliers and new suppliers to ensure we are able to have sufficient inventory and sub assembly parts as we increase our
manufacturing capability to support growing demand. We are also working on process improvements, such as certain automation
techniques, to allow us to manufacture our products more efficiently. If we are unable to implement these process improvements on a
timely basis, it could inhibit our revenue growth.

Any failure to achieve and maintain the high manufacturing standards that our products require may seriously harm our business.

Our products require precise, high-quality manufacturing. Achieving precision and quality control requires skill and diligence

by our personnel as well as our vendors. Any failure to achieve and maintain these high manufacturing standards, including the
incidence of manufacturing errors, design defects or component failures could result in patient injury or death, product recalls or
withdrawals, delays or failures in product testing or delivery, cost overruns or other problems that could seriously hurt our business.
Despite our very high manufacturing standards, we cannot completely eliminate the risk of errors, defects or failures. If we or our
vendors are unable to manufacture our products in accordance with necessary quality standards, or if we are unable to procure
additional high-quality manufacturing facilities, our business and results of operations may be negatively affected.

If we cannot attract and retain key management, scientific, sales and other personnel we need, we will not be successful.

We depend heavily on the contributions of the principal members of our business, financial, technical, sales and support,

regulatory and clinical, operating, manufacturing and administrative management and staff, many of whom would be difficult to
replace. Our key personnel include our senior officers, many of whom have very specialized scientific, medical or operational
knowledge. The loss of the service of any of the key members of our senior management team may significantly delay or prevent our
achievement of our business objectives. Our ability to attract and retain qualified personnel, consultants and advisors is critical to our
success. For example, many of the members of our clinical staff are registered nurses with experience in the surgery suite or cath lab,

of which only a limited number of whom seek employment with a company like ours. Competition for skilled and experienced
personnel in the medical device industry is intense. We face competition for skilled and experienced management, scientific, clinical,
engineering and sales personnel from numerous medical device and life sciences companies, universities, governmental entities and
other research institutions. If we lose the services of any of the principal members of our management and staff, or if we are unable to
attract and retain qualified personnel in the future, especially scientific and sales personnel, our business could be adversely affected.

If our suppliers cannot provide the components we require, our ability to manufacture our products could be harmed.

We rely on third-party suppliers to provide us with some components used in our existing products and products under
development. For example, we outsource the manufacturing of most of our consoles other than final assembly and testing and the
sterilization process for our products. Relying on third-party suppliers makes us vulnerable to component part failures or obsolescence
and to interruptions in supply, either of which could impair our ability to conduct clinical tests or to ship our products to our customers
on a timely basis. Using third-party vendors makes it difficult and sometimes impossible for us to test fully certain components, such
as components on circuit boards, maintain quality control, manage inventory and production schedules and control production costs.
Manufacturers of our product components may be required to comply with the FDA or other regulatory manufacturing regulations and
to satisfy regulatory inspections in connection with the manufacture of the components. Any failure by a supplier to comply with
applicable requirements could lead to a disruption in supply. Vendor lead times to supply us with ordered components vary
significantly and often can exceed six months or more. Both now, and as we expand our manufacturing capacity, we cannot be sure
that our suppliers will furnish us required components when we need them or be able to provide us inventory materials to support our
expected growth in demand for our products. These factors could make it more difficult for us to manufacture our products effectively
and efficiently and could adversely impact our results of operations.

Some of our suppliers may be the only source for a particular component, which makes us vulnerable to significant cost
increases. We have many foreign suppliers for some of our parts in which we are subject to currency exchange rate volatility. Some of
our vendors are small in size and may have difficulty supplying the quantity and quality of materials required for our products as our
business grows. Vendors that are the sole source of certain products may decide to limit or eliminate sales of certain components due
to product liability or other concerns and we might not be able to find a suitable replacement for those products. Our inventory may
run out before we find alternative suppliers and we might be forced to purchase substantial inventory, if available, to last until we are
able to qualify an alternate supplier. If we cannot obtain a necessary component, we may need to find, test and obtain regulatory
approval or clearance for a replacement component, produce the component ourselves or redesign the related product, which would
cause significant delay and could increase our manufacturing costs. Any of these events could adversely impact our results of
operations.

We may not be successful in expanding our direct sales activities into international markets.

We are seeking to expand our international sales of our products by recruiting direct sales and support teams outside the U.S.

Our international operations in Germany, France, Canada, Japan, the United Kingdom and Singapore are or will be subject to a
number of risks, which may vary from the risks we experience in the U.S., including:



the need to obtain regulatory approvals in foreign countries before our products may be sold or used;

the need to procure reimbursement for our products in each foreign market;

the generally lower level of reimbursement available in foreign markets relative to the U.S.;

the requirement to work with distributors or other partners to sell our products;

longer sales cycles;

limited protection of intellectual property rights;

difficulty and delays in collecting accounts receivable;

different income tax and sales tax environments;

difficulty in supporting patients using our products;

different payroll, employee benefits and statutory requirements;

fluctuations in the values of foreign currencies; and

political and economic instability.

If we are unable to effectively expand our sales activities in international markets, our results of operations could be negatively

impacted.

We rely on distributors to sell our products in some international markets and poor performance by a distributor could reduce our
sales and harm our business.

We rely on distributors to market and sell our products in certain parts of Europe, Asia, South America and the Middle East.

Many of these distributors have the exclusive right to distribute our products in their territory. We may hire distributors to market our
products in additional international markets in the future. Our success in these markets will depend almost entirely upon the efforts of
our distributors, over whom we have little or no control. If a distributor does not market and sell our products effectively and maintain
a continued focus on the sale and distribution of our products up to our standards, we could lose sales and impair our ability to
compete in that market. We are also subject to credit risk and foreign currency risk associated with shipments to our distributors and
this could negatively impact our financial condition and liquidity in the future.

We have incurred losses in previous periods and it is possible that we may incur losses in future periods.

We have recognized net income of approximately $52.1 million, $38.1 million and $113.7 million for the fiscal years ended
March 31, 2017, 2016 and 2015, respectively. The profitability we achieved in recent years may not be indicative of our ability to
sustain profitability and it is possible that we may incur losses from operations in future periods. Any losses incurred in the future may
result primarily from, among other things:



the expansion of our global distribution network;

investments in new markets such as Japan;

ongoing product and clinical development;

costs related to new business development initiatives, such as potential acquisitions of businesses;

legal expenses related to the FCA Investigation and patent related matters;

costs associated with hiring additional personnel, performing clinical trials, continuing our research and development
relating to our products under development, seeking regulatory approvals and, if we receive these approvals, commencing
commercial manufacturing and marketing activities;

expanded marketing initiatives, particularly with recent PMA approvals in the U.S.;

income and other related taxes;

significant expenditures necessary to market and manufacture in commercial quantities our approved circulatory care
products; and

the amount of these expenditures is difficult to forecast accurately and cost overruns may occur.

Our operating results may fluctuate unpredictably.

Historically, our annual and quarterly operating results have fluctuated widely and we expect these fluctuations to continue.

Among the factors that may cause our operating results to fluctuate are:



the timing of customer orders and deliveries;

seasonality of sales in the U.S. and European markets, where summer vacation schedules normally result in fewer
medical procedures during the first half of our fiscal year:

competitive changes, such as price changes or new product introductions that we or our competitors may make;

the timing of regulatory actions, such as product approvals or recalls;

costs we incur developing and testing our Impella heart pumps and other products;

costs we incur in anticipation of future sales, such as inventory purchases, expansion of manufacturing facilities, or
establishment of international sales offices;

costs we incur in connection with the FCA Investigation;

additional taxes, such as the Medical Device tax and income taxes;



impact and timing of equity awards on stock-based compensation;

timing of certain marketing programs and events;

the availability of physicians to use our products, as there are seasonal impacts, due to physician vacation or training
events that limit their ability to be in the hospital to perform procedures that involve our products;

impact of any businesses or technologies we may acquire in the future;

economic conditions in the healthcare industry; and

efforts by governments, insurance companies and others to contain healthcare costs, including changes to reimbursement
policies.

We believe that period-to-period comparisons of our historical results are not necessarily meaningful, and investors should not

rely on them as an indication of our future performance. To the extent we experience the factors described above, our future operating
results may not meet the expectations of securities analysts or investors from time to time, which may cause the market price of our
common stock to decline.

We may undergo an “ownership change” for U.S. federal income tax purposes, which would limit our ability to utilize net
operating losses from prior tax years.

If we undergo an “ownership change” for U.S. federal income tax purposes, our ability to utilize net operating loss carry-
forwards from prior years to reduce taxable income in future tax years might be limited by operation of the Internal Revenue Code,
either by limiting the amount of net operating losses that can be utilized to offset taxable income in a given year, or in total over the
entire carry-forward period. Certain changes in the ownership of our common stock may result in an ownership change sufficient to
limit the availability of our net operating losses. Net operating losses, foreign tax credits and research and development credits have
expiry dates in the U.S. and ability to fully utilize will be dependent upon generating taxable income in the future. We also have net
operating loss carry-forwards in other countries outside of the U.S. and our ability to use those losses in the future to offset taxable
income could be limited by tax regulations in those countries.

We may not have sufficient funds to develop and commercialize our new products or make acquisitions of desirable companies,
products or technologies.

The development, manufacture and sale of any medical device is very expensive and we may require additional funds to make

acquisitions of desirable companies, products or technologies. We cannot be sure that we will have the necessary funds to develop and
commercialize our new products or acquire companies, products, or technologies, or that additional funds will be available on
commercially acceptable terms, if at all. If we are unable to obtain the necessary funding to support these efforts, our business may be
adversely affected. We believe we have sufficient liquidity to finance our operations for the next fiscal year. We also may evaluate
from time to time other financing alternatives as necessary to fund operations, and any equity or convertible debt financing may
involve substantial dilution to our existing stockholders.

We own patents, trademarks, trade secrets, copyrights and other intellectual property and know-how that we believe give us a
competitive advantage. If we cannot protect our intellectual property and develop or otherwise acquire additional intellectual
property, competition could force us to lower our prices, which could hurt our profitability.

Our intellectual property rights are and will continue to be a critical component of our success. We rely and expect to continue
to rely on a combination of intellectual property, including patent, trademark, copyright, trade secret and domain name protection
laws, as well as confidentiality agreements with our employees and others, to protect our intellectual property and proprietary
rights. If we fail to obtain and maintain adequate intellectual property protection, we may not be able to prevent third parties from
using our proprietary technologies or from marketing products that are very similar or identical to ours.

A substantial portion of our intellectual property rights relating to the Impella devices and other products under development is
in the form of trade secrets, rather than patents. Unlike patents, trade secrets are only recognized under applicable law if they are kept
secret by restricting their disclosure to third parties. We protect our trade secrets and proprietary knowledge in part through
confidentiality agreements with employees, consultants and other parties. However, certain consultants and third parties with whom
we have business relationships, and to whom in some cases we have disclosed trade secrets and other proprietary knowledge, may also
provide services to other parties in the medical device industry, including companies, universities and research organizations that are
developing competing products. In addition, some of our former employees who were aware of certain of our trade secrets and other
proprietary knowledge in the course of their employment may seek employment with, and become employed by, our competitors. We
cannot be assured that consultants, employees and other third parties with whom we have entered into confidentiality agreements will

not breach the terms of such agreements by improperly using or disclosing our trade secrets or other proprietary knowledge, that we
will have adequate remedies for any such breach, or that our trade secrets will not become known to or be independently developed by
our competitors. The loss of trade secret protection for technologies or know-how relating to our product portfolio and products under
development could adversely affect our business and our prospects.

Our business position also depends in part on our ability to maintain and defend our existing patents and obtain, maintain, and
defend additional patents and other intellectual property rights. We intend to seek additional patents, but our pending and future patent
applications may not result in issued patents or be granted on a timely basis. In addition, issued patents may not contain claims
sufficiently broad to protect us against third parties with similar technologies or products or provide us with any competitive
advantage, including exclusivity in a particular product area. The scope of our patent claims also may vary between countries, as
individual countries have distinctive patent laws. We may be subject to challenges by third parties regarding our intellectual property,
including, among others, claims regarding validity, enforceability, scope and effective term. Patent prosecution, related proceedings,
and litigation in the U.S. and in other countries may be expensive, time consuming and ultimately unsuccessful. In addition, patents
issued by foreign countries may afford less protection than is available under U.S. patent law and may not adequately protect our
proprietary information. Our competitors may independently develop proprietary technologies and processes that are the same as or
substantially equivalent to ours or design around our patents. Our competition may also hold or obtain intellectual property rights that
would threaten our ability to develop or commercialize our product offerings. The expiration of patents on which we rely for
protection of key products could diminish our competitive advantage and adversely affect our business and our prospects.

Companies in the medical device industry typically obtain patents and frequently engage in substantial intellectual property
litigation. Our products and technologies could infringe on the rights of others. If a third-party successfully asserts a claim for
infringement against us, we may be liable for substantial damages, be unable to sell products using that technology, or have to seek a
license or redesign the related product. These alternatives may be uneconomical or impossible. Intellectual property litigation could be
costly, result in product development delays and divert the efforts and attention of management from our business.

For a discussion of our material legal proceedings as of March 31, 2017, please see Note 11 to our consolidated financial

statements entitled “Commitments and Contingencies,” which is incorporated by reference into this item.

Product liability claims could damage our reputation and adversely affect our financial results.

The clinical use of medical products, even after regulatory approval, poses an inherent risk of product liability claims. We

maintain limited product liability insurance coverage, subject to certain deductibles and exclusions. We cannot be sure that product
liability insurance will be available in the future or will be available on acceptable terms or at reasonable costs, or that such insurance
will provide us with adequate coverage against potential liabilities. Claims against us, regardless of their merit or potential outcome,
may also hurt our ability to obtain physician endorsement of our products or expand our business. As we continue to expand use or our
existing products and introduce more products, we face an increased risk that a product liability claim will be brought against us.

Some of our products are designed for patients who suffer from late-stage or end-stage heart failure, and many of these patients

do not survive, even when supported by our products. There are many factors beyond our control that could result in patient death,
including the condition of the patient prior to use of the product, the skill and reliability of physicians and hospital personnel using and
monitoring the product and product maintenance by customers. However, the failure of our products used for clinical testing or sale
could give rise to product liability claims and negative publicity.

The risk of product liability claims is heightened when we sell products that are intended to support a patient until the end of

life. The finite life of our products, as well as complications associated with their use, could give rise to product liability claims
whether or not the products have extended or improved the quality of a patient’s life. If we have to pay product liability claims in
excess of our insurance coverage, our financial condition will be adversely affected.

Quality problems can result in substantial costs and inventory write-downs.

Government regulations require us to track materials used in the manufacture of our products, so that if a problem is identified

in one product it can be traced to other products that may have the same problem. An identified quality problem may require
reworking or scrapping related inventory and/or recalling previous shipments. Because a malfunction in our products can possibly be
life-threatening, we may be required to recall and replace, free of charge, products already in the marketplace. Any quality problem
could cause us to incur significant expenses, lead to significant write-offs, injure our reputation and harm our business and financial
results.

Disruptions of critical information systems or material breaches in the security of our systems could harm our business, customer
relations and financial condition.

We rely in part on information technology to store information, interface with customers, maintain financial accuracy, secure

our data and accurately produce our financial statements. If our information technology systems do not effectively and securely
collect, store, process and report relevant data for the operation of our business, whether due to equipment malfunction or constraints,
software deficiencies or human error, our ability to effectively plan, forecast and execute our business plan and comply with
applicable laws and regulations would be materially impaired. Any such impairment could have a material adverse effect on our
results of operations, financial condition and the timeliness with which we report our operating results.

Our business requires us to use and store personally identifiable information of our customers, vendors, employees and business

partners and, in certain instances patients treated with our products in the clinical setting. We are subject to various domestic and
international privacy and security regulations, including but not limited to HIPAA, which mandates, among other things, the adoption
of uniform standards for the electronic exchange of information in common healthcare transactions, as well as standards relating to the
privacy and security of individually identifiable health information, which require the adoption of administrative, physical and
technical safeguards to protect such information. In addition, many states have enacted comparable laws addressing the privacy and
security of health information, some of which are more stringent than HIPAA. If we fail to comply with these standards, we could be
subject to criminal penalties and civil sanctions.

While we devote significant resources to network security, data encryption and other security measures to protect our systems

and data, including our own proprietary information and the confidential and personally identifiable information of our customers,
employees, business partners and patients, these measures cannot provide absolute security. The costs to eliminate or alleviate network
security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and our efforts
to address these problems may not be successful, resulting potentially in the theft, loss, destruction or corruption of information we
store electronically, as well as unexpected interruptions, delays or cessation of service, any of which could cause harm to our business
operations. Moreover, if a computer security breach or cyber-attack affects our systems or results in the unauthorized release of
proprietary or personally identifiable information, our reputation could be materially damaged and our operations could be impaired.
We would also be exposed to a risk of loss or litigation and potential liability, which could have a material adverse effect on our
business, results of operations and financial condition.

If we acquire other companies or businesses, we will be subject to risks that could hurt our business.

We may pursue acquisitions to obtain complementary businesses, products or technologies. Any such acquisition may not

produce the revenues, earnings or business synergies that we anticipate and an acquired business, product or technology might not
perform as we expect. Our management could spend a significant amount of time, effort and money in identifying, pursuing and
completing the acquisition. If we complete an acquisition, we may encounter significant difficulties and incur substantial expenses in
integrating the operations and personnel of the acquired company into our operations. In particular, we may lose the services of key
employees of the acquired company and we may make changes in management that impair the acquired company’s relationships with
employees, vendors and customers. Additionally, we may acquire development-stage companies that are not yet profitable and which
require continued investment, which could decrease our future earnings.

Any of these outcomes could prevent us from realizing the anticipated benefits of an acquisition. To pay for an acquisition, we
might use stock or cash. Alternatively, we might borrow money from a bank or other lender. If we use stock, our stockholders would
experience dilution of their ownership interests. If we use cash or debt financing, our financial liquidity would be reduced.

If we include future milestones as part of the potential purchase price of an acquisition, as we did in connection with our
acquisition of ECP in July 2014, then we will have to estimate the value of these milestones each reporting period and any changes
underlying these estimates with respect to expected timing or valuation of these milestones could have a volatile impact on our
earnings.

Revisions to accounting standards and financial reporting and corporate governance requirements could result in changes to our
standard practices and could require a significant expenditure of time, attention and resources, especially by senior management.

We must follow accounting standards and financial reporting and corporate governance requirements and tax laws set by the
governing bodies and lawmakers in the U.S. and in other jurisdictions where we do business, as well as NASDAQ. From time to time,
these governing bodies and lawmakers implement new and revised rules and laws. These new and revised accounting standards and
financial reporting and corporate governance requirements may require changes to our financial statements, financial and governance
reporting requirements, the composition of our Board of Directors, the responsibility and manner of operation of various board level

committees and the information filed by us with the governing bodies. Our main accounting practices that may be affected by changes
in the accounting principles are as follows:



accounting for revenue recognition;

accounting for intangibles—goodwill and other;

fair value measurement;

accounting for income taxes;

accounting for stock-based compensation;

accounting for leases; and

accounting for business combinations.

Implementing changes required by new standards, requirements or laws likely will require a significant expenditure of time,

attention and resources. It is impossible to completely predict the impact, if any, on us of future changes to accounting standards and
financial reporting and corporate governance requirements.

We use estimates, make judgments and apply certain methods in measuring the progress of our business in determining our
financial results and in applying our accounting policies. As these estimates, judgments and methods change, our assessment of
the progress of our business and our results of operations could vary.

The methods, estimates and judgments we use in applying our accounting policies have a significant impact on our results of
operations. Such methods, estimates and judgments are, by their nature, subject to substantial risks, complexities, uncertainties and
assumptions, and factors may arise over time that may lead us to change our methods, estimates and judgments. Changes in any of our
assumptions may cause variation in our financial reporting and may adversely affect our reported financial results.

Environmental and health safety laws may result in liabilities, expenses and restrictions on our operations.

Federal, state, local and foreign laws regarding environmental protection, hazardous substances and human health and safety

may adversely affect our business. Using hazardous substances in our operations exposes us to the risk of accidental injury,
contamination or other liability from the use, storage, importation, handling, or disposal of hazardous materials. If our or our
suppliers’ operations result in the contamination of the environment or expose individuals to hazardous substances, we could be liable
for damages and fines, and any liability could significantly exceed our insurance coverage and have a material adverse effect on our
financial condition. We maintain insurance for certain environmental risks, subject to substantial deductibles; however, we cannot
assure you we can continue to maintain this insurance in the future at an acceptable cost or at all. Future changes to environmental and
health and safety laws could cause us to incur additional expenses or restrict our operations.

Fluctuations in foreign currency exchange rates could result in declines in our reported sales and results of operations.

Because some of our international sales are denominated in local currencies and not in U.S. dollars, our reported sales and
earnings are subject to fluctuations in foreign currency exchange rates, primarily the Euro. At present, we do not hedge our exposure
to foreign currency fluctuations. As a result, sales and expenses occurring in the future that are denominated in foreign currencies may
be translated into U.S. dollars at less favorable rates, resulting in reduced revenues and earnings.

Risks Related to Our Common Stock

The market price of our common stock is volatile.

The market price of our common stock has fluctuated widely and may continue to do so. For example, from April 1, 2016 to
March 31, 2017, the price of our stock ranged from a low of $92.03 per share to a high of $132.95 per share. Many factors could cause
the market price of our common stock to rise and fall. Some of these factors are:



variations in our quarterly results of operations;

status of regulatory approvals for our products;

introduction of new products by us or our competitors;

acquisitions or strategic alliances involving us or our competitors;



changes in healthcare policy or third-party reimbursement practices;

changes in estimates of our performance or recommendations by securities analysts;

the hiring or departure of key personnel;

results of clinical trials of our products;

notice of a recall or other safety issue that impacts the ability for customers to use our products;

future sales of shares of common stock in the public market;

the outcome of currently pending litigation and governmental investigations, or the initiation of additional litigation or
government investigations against the company; and

market conditions in the industry, particularly around reimbursement for our products and the economy as a whole.

In addition, the stock market in general and the market for shares of medical device companies in particular have experienced

extreme price and volume fluctuations in recent years. These fluctuations are often unrelated to the operating performance of
particular companies. These broad market fluctuations may adversely affect the market price of our common stock. When the market
price of a company’s stock drops significantly, stockholders often institute securities class action litigation against that company. Any
litigation against us could cause us to incur substantial costs, divert the time and attention of our management and other resources, or
otherwise harm our business.

The sale of additional shares of our common stock, or the exercise of outstanding options to purchase our common stock, would
dilute our stockholders’ ownership interest.

We have historically issued restricted stock units and stock options to acquire our common stock and we expect to continue to

issue restricted stock units and stock options to our employees and others in the future. If all outstanding stock options were exercised
and all outstanding restricted stock units vested, our stockholders would suffer dilution of their ownership interest. In addition, we
have issued from time to time, additional shares of our common stock in connection with acquisitions, public offerings, and other
activities. Future issuances of our common stock would also result in a dilution of our stockholders’ ownership interest.

Our certificate of incorporation and Delaware law could make it more difficult for a third-party to acquire us and may prevent our
stockholders from realizing a premium on our stock.

Provisions of our certificate of incorporation and Delaware General Corporation Law may make it more difficult for a third-

party to acquire us, even if doing so would allow our stockholders to receive a premium over the prevailing market price of our stock.
Those provisions of our certificate of incorporation and Delaware law are intended to encourage potential acquirers to negotiate with
us and allow our Board of Directors the opportunity to consider alternative proposals in the interest of maximizing stockholder value.
However, such provisions may also discourage acquisition proposals or delay or prevent a change in control which could negatively
affect our stock price.

The market value of our common stock could vary significantly based on market perceptions of the status of our product
development efforts.

The perception of securities analysts regarding our product development efforts could significantly affect our stock price. As a

result, the market price of our common stock has and could in the future change substantially when we or our competitors make
product announcements. Many factors affecting our stock price are industry related and beyond our control.

We have not paid and do not expect to pay dividends and any return on our stockholders’ investment will likely be limited to the
value of our common stock.

We have never paid dividends on our common stock and do not anticipate paying dividends on our common stock in the
foreseeable future. The payment of dividends on our common stock will depend on our earnings, financial condition and other
business and economic factors affecting us at such time as our board of directors may consider relevant. If we do not pay dividends,
our common stock may be less valuable because a return on our stockholders’ investment will only occur if our stock price
appreciates.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2.

PROPERTIES

Our corporate offices are located at 22 Cherry Hill Drive, Danvers, Massachusetts 01923. The locations and uses of our major

properties as of March 31, 2017, are listed below:

Location
Danvers,
Massachusetts

Aachen, Germany

Berlin, Germany
Tokyo, Japan

(1) Leased properties

(1)

Function
Corporate Headquarters, Research and Development, Regulatory and
Clinical Affairs, Manufacturing, Administration, Marketing, Distribution
Research and Development, Regulatory and Clinical Affairs,
Manufacturing, Administration, Marketing, Distribution
(1) Research and Development, Regulatory and Clinical Affairs
(1) Administration, Regulatory and Clinical Affairs, Marketing, Distribution

(2)

Our corporate headquarters is located in Danvers, Massachusetts. This facility encompasses most of our U.S. operations,
including research and development, manufacturing, sales and marketing and general and administrative departments. On August 12,
2016, we entered into a new lease agreement to expand our existing corporate headquarters which includes 163,560 square feet of
space. The initial term of the lease agreement commenced on August 12, 2016 and terminates on August 31, 2026. We have options to
extend the initial term for three separate periods of five years each. The lease agreement provides us with an exclusive option to
purchase the building on or before August 31, 2022, subject to certain conditions set forth therein. In addition, the lease agreement
grants us a one-time right of first offer to purchase the building from September 1, 2022 until August 31, 2026, if the lessor decides to
sell the building or receives an offer to purchase the building from a third-party buyer.

In February 2017, we entered into a lease agreement for an additional office space in Danvers, Massachusetts which expires in

July 2022.

In October 2016, we entered into a lease agreement in Tokyo, Japan which expires in September 2021.

In September 2016, we entered into a lease agreement in Berlin, Germany which begins in May 2017 expires in May 2024.

(2) Owned property

In December 2016, we entered into a purchase and sale agreement to acquire its existing European headquarters in Aachen,

Germany, consisting of 33,000 square feet of space. Pursuant to the purchase and sale agreement, we acquired the property for
approximately $12.6 million in February 2017.

We believe our properties have been well maintained, are in good operating condition, and provide adequate productive

capacity.

ITEM 3.

LEGAL PROCEEDINGS

We are from time to time involved in various legal actions, the outcomes of which are not within our complete control and may
not be known for prolonged periods of time. For a discussion of our material legal proceedings as of March 31, 2017, please see Note
11 to our consolidated financial statements entitled “Commitments and Contingencies,” which is incorporated by reference into this
item.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES

Market Price

Our common stock is traded on the NASDAQ Global Market under the symbol “ABMD.” The following table sets forth the
range of high and low sales prices per share of common stock, as reported by the NASDAQ Global Market for our two most recent
fiscal years:

Fiscal Year Ended March 31, 2017

First Quarter
Second Quarter
Third Quarter
Fourth Quarter

Fiscal Year Ended March 31, 2016

First Quarter
Second Quarter
Third Quarter
Fourth Quarter

Number of Stockholders

High

Low

109.66
131.16
132.95
126.04

76.90
110.68
99.22
95.21

High

92.03
108.77
95.14
103.53

59.04
64.03
68.25
67.81

Low

As of May 12, 2017, we had approximately 517 holders of record of our common stock and there were approximately 27,110

beneficial holders of our common stock. Many beneficial holders hold their stock through depositories, banks and brokers included as
a single holder in the single “street” name of each respective depository, bank, or broker.

Dividends

We have never declared or paid any cash dividends on our common stock and do not anticipate paying any cash dividends on
our common stock in the foreseeable future. We anticipate that we will retain all of our future earnings, if any, to support operations
and to finance the growth and development of our business. Our payment of any future dividends will be at the discretion of our board
of directors and will depend upon our financial condition, operating results, cash needs and growth plans.

Performance Graph

The following graph compares the yearly change in the cumulative total stockholder return for our last five full fiscal years,

based upon the market price of our common stock, with the cumulative total return on a NASDAQ Composite Index (U.S.
Companies) and a peer group, the NASDAQ Medical Equipment-SIC Code 3840-3849 Index, which is comprised of medical
equipment companies, for that period. The performance graph assumes the investment of $100 on March 31, 2012 in our Common
Stock, the NASDAQ Composite Index (U.S. Companies) and the peer group index, and the reinvestment of any and all dividends.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among ABIOMED, Inc., The NASDAQ Composite Index
and The NASDAQ Medical Equipment SIC Code 3840-3849

$600

$500

$400

$300

$200

$100

3/31/2012

3/31/2013

3/31/2014

3/31/2015

3/31/2016

3/31/2017

ABIOMED, Inc.
Nasdaq Composite Index
Nasdaq Medical Equipment SIC Code 3840-3849

*$100 invested on 3/31/2012 in stock or index-including
*$100 invested on 3/31/2012 in stock or index-including
reinvestment of dividends.

ABIOMED, Inc
Nasdaq Composite Index
Nasdaq Medical Equipment SIC Code 3840-3849

3/31/2012
100
100
100

Cumulative Total Return ($)

3/31/2013
84
106
100

3/31/2014
117
136
129

3/31/2015
323
159
101

3/31/2016
427
158
100

3/31/2017
564
191
109

This graph is not “soliciting material” under Regulation 14A or 14C of the rules promulgated under the Securities Exchange Act

of 1934, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference in any of our
filings under the Securities Act of 1933, as amended, or the Exchange Act whether made before or after the date hereof and
irrespective of any general incorporation language in any such filing.

Transfer Agent

American Stock Transfer & Trust Company, 59 Maiden Lane, New York, NY 10038, is our stock Transfer Agent.

ITEM 6.

SELECTED FINANCIAL DATA

The financial data included within the tables below should be read in conjunction with our consolidated financial statements and

related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this report
and our previously filed Form 10-Ks.

SELECTED CONSOLIDATED FINANCIAL DATA

(In thousands, except per share data)

Statement of Operations Data:
Revenue:

Products
Funded research and development

Costs and expenses:

Cost of product revenue
Research and development
Selling, general and administrative
Amortization of intangible assets

Income from operations
Other income (expense):

Investment income (expense), net
Other (expense) income, net

Income before income taxes
Income tax provision (benefit) (1)
Net income

Basic net income per share
Basic weighted average shares outstanding

Diluted net income per share
Diluted weighted average shares outstanding

Balance Sheet Data:
Cash, cash equivalents, and short and long term marketable
securities
Working capital (2)
Total assets
Stockholders' equity

Fiscal Years Ended March 31,

2017

2016

2015

2014

2013

$ 445,195
109
445,304

$ 329,520
23
329,543

$ 229,950
361
230,311

$ 183,280
363
183,643

$ 157,614
510
158,124

70,627
66,386
218,153
-
355,166
90,138

1,554
(349)
1,205
91,343
39,227
52,116

1.21
43,238

1.17
44,658

50,419
49,759
164,261
-
264,439
65,104

395
339
734
65,838
27,691
38,147

0.90
42,204

0.85
44,895

39,945
35,973
125,727
-
201,645
28,666

196
(97)
99
28,765
(84,923)
$ 113,688

2.80
40,632

2.65
42,858

37,322
30,707
107,251
-
175,280
8,363

118
49
167
8,530
1,179
7,351

0.19
39,334

0.18
41,606

$ 277,091
257,341
550,414
452,071

$ 213,053
241,851
423,931
368,775

$ 145,954
145,720
338,367
291,560

$ 118,340
87,555
205,407
168,353

31,596
25,647
84,227
111
141,581
16,543

(7)
326
319
16,862
1,848
15,014

0.38
39,113

0.37
41,052

88,113
89,549
169,999
137,080

(1) Income tax benefit for the quarter and year ended March 31, 2015 were impacted by the release of the $101.5 million valuation

allowance on certain deferred tax assets.

(2) This reflects a $35.1 million reclassification of current deferred tax assets to long-term deferred tax assets on the March 31, 2015
consolidated balance sheet due to the adoption of ASU No. 2015-17, Income Taxes (Topic 740)—Balance Sheet Classification of
Deferred Taxes. This reclassification did not impact working capital at March 31, 2014 and 2013 due to the full valuation
allowance on deferred tax assets for those years.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

All statements, trend analysis and other information contained in the following discussion relative to markets for our products

and trends in revenue, gross margin and anticipated expense levels, as well as other statements, including words such as “may,”
“anticipate,” “believe,” “plan,” “estimate,” “expect,” and “intend” and other similar expressions constitute forward-looking
statements. These forward-looking statements are subject to business and economic risks and uncertainties and our actual results of
operations may differ materially from those contained in the forward-looking statements. Factors that could cause or contribute to
such differences include, but are not limited to, those discussed under Item 1A Risk Factors as well as other risks and uncertainties
referenced in this report.

Overview

We are a leading provider of temporary mechanical circulatory support devices, and we offer a continuum of care to heart
failure patients. We develop, manufacture and market proprietary products that are designed to enable the heart to rest, heal and
recover by improving blood flow to the coronary arteries and end-organs and/or temporarily assisting the pumping function of the
heart. Our products are used in the cardiac catheterization lab, or cath lab, by interventional cardiologists, the electrophysiology lab,
the hybrid lab and in the heart surgery suite by heart surgeons. A physician may use our devices for patients who are in need of
hemodynamic support prophylactically, urgently or emergently before, during or after angioplasty or heart surgery procedures. We
believe that heart recovery is the optimal clinical outcome for a patient experiencing heart failure because it enhances the potential for
the patient to go home with the patient’s own native heart, facilitating the restoration of quality of life. In addition, we believe, that for
the care of such patients, heart recovery is often the most cost-effective solution for the healthcare system.

Our strategic focus and the driver of the majority of our revenue growth is the market penetration of our family of Impella®
heart pumps. The Impella device portfolio, which includes the Impella 2.5® Impella CP®, Impella RP®, Impella LD® and Impella
5.0® devices, has supported thousands of patients. We expect that almost all of our product and service revenue in the near future will
be from our Impella devices. Revenues from our non-Impella devices, largely focused on the heart surgery suite, have been decreasing
over the past several years and are expected to be insignificant as we have strategically shifted our sales and marketing efforts towards
our Impella devices and the cath lab.

In March 2015, we received a Pre-Market Approval, or PMA, from the FDA for use of the Impella 2.5 device during elective

and urgent high-risk percutaneous coronary intervention, or PCI, procedures. In December 2016, the FDA expanded this PMA
approval in the U.S. to include the Impella CP device. With these PMA indications, the Impella 2.5 and Impella CP devices provide
the only minimally invasive treatment options indicated for use during high-risk PCI procedures. In April 2016, the FDA approved a
PMA supplement for our Impella 2.5, Impella CP, Impella 5.0 and Impella LD devices to provide treatment for ongoing cardiogenic
shock that occurs following a heart attack or open heart surgery. The intent of the Impella system therapy is to reduce ventricular work
and to provide the circulatory support necessary to allow heart recovery and early assessment of residual myocardial function.

Our Impella 2.5, Impella 5.0, Impella LD, Impella CP and Impella RP devices also have CE Mark approval and Health Canada

approval, which allows us to market these devices in the European Union and Canada.

In December 2016, we received PMA approval from the FDA for the use of the Impella CP device during elective and urgent

allows for the clinical decision by physicians to leave the Impella CP device in place beyond the intended duration of up to six hours
should unforeseen circumstances arise.

We expect to continue to make additional PMA supplement submissions for our Impella suite of devices for additional

indications.

Summary of Recent Financial Performance

For fiscal 2017, we recognized net income of $52.1 million, or $1.21 per basic share and $1.17 per diluted share, compared to
$38.1 million, or $0.90 per basic share and $0.85 per diluted share for the prior fiscal year. The increase in our net income for fiscal
2017 was driven primarily by higher Impella product revenue due to greater utilization of our Impella devices in the U.S. and
Germany.

Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United
States. Preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial
statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these
estimates. The accounting policies we believe are critical in the preparation of our consolidated financial statements relate to revenue
recognition, in-process research and development, contingent consideration and income taxes. Our significant accounting policies are
more fully described under the heading “Summary of Significant Accounting Policies” in Note 2 to our consolidated financial
statements contained elsewhere herein.

Revenue Recognition

We recognize revenue when evidence of an arrangement exists, title has passed (generally upon shipment) or services have been

rendered, the selling price is fixed or determinable and collectability is reasonably assured.

Revenue from product sales to customers is recognized when delivery has occurred. All costs related to product sales are
recognized at time of delivery. We do not provide for rights of return to customers on our product revenue and therefore we do not
record a provision for returns.

Maintenance and service support contract revenues are included in product revenue and are recognized ratably over the service

contract term. Revenue is recognized as it is earned in limited instances where we rent console medical devices to customers on a
month-to-month basis or for a longer specified period of time. Other service revenues are recognized as the services are performed.

Income Taxes

Our provision for income taxes is composed of a current and a deferred portion. The current income tax provision is calculated

as the estimated taxes payable or refundable on tax returns for the current year. The deferred income tax provision is calculated for the
estimated future tax effects attributable to temporary differences and net operating loss carryforwards using expected tax rates in effect
in the years during which the differences are expected to reverse.

Deferred income taxes are recognized for the tax consequences in future years as the differences between the tax bases of assets
and liabilities and their financial reporting amounts at each fiscal year end based on enacted tax laws and statutory tax rates applicable
to the periods in which the differences are expected to impact taxable income.

We regularly assess our ability to realize our deferred tax assets. Assessing the realization of deferred tax assets requires
significant management judgment. We consider whether a valuation allowance is needed on our deferred tax assets by evaluating all
positive and negative evidence relative to our ability to recover deferred tax assets, including future reversals of existing taxable
temporary differences, projected future taxable income, tax planning strategies and recent financial results.

We recognize and measure uncertain tax positions using a two-step approach. The first step is to evaluate the tax position for
recognition by determining if, based on the technical merits, it is more likely than not that the position will be sustained upon audit,
including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit at the largest
amount that is more likely than not of being realized upon ultimate settlement. We reevaluate these uncertain tax positions on an
ongoing basis, when applicable. This evaluation is based on factors including, but not limited to, changes in facts or circumstances,

new information and technical insights, and changes in tax laws. Any changes in these factors could result in the recognition of a tax
benefit or an additional charge to the tax provision. When applicable, we accrue for the effects of uncertain tax positions and the
related potential penalties and interest through income tax expense.

Recent Accounting Pronouncements

Information regarding recent accounting pronouncements is included in Note 2. “Summary of Significant Accounting Policies”

to our consolidated financial statements in this Report.

Results of Operations

The following table sets forth certain consolidated statements of operations data for the periods indicated as a percentage of

total revenues:

Revenue:

Product revenue
Funded research and development

Total revenue

Costs and expenses as a percentage of total revenue:

Cost of product revenue
Research and development
Selling, general and administrative

Total costs and expenses

Income from operations
Other income and income tax provision (benefit)
Net income as a percentage of total revenue

Fiscal Years Ended March 31,
2016

2015

2017

100.0 %
-
100.0

99.8 %
0.2
100.0

15.9
14.9
49.0
79.8
20.2
8.5
11.7 %

15.3
15.1
49.8
80.2
19.8
8.2
11.6 %

17.3
15.6
54.6
87.5
12.5
(36.9)
49.4 %

Fiscal Years Ended March 31, 2017 and March 31, 2016 (“fiscal 2017” and “fiscal 2016”)

Revenue

Our revenue is comprised of the following:

Impella product revenue
Service and other revenue
Other products

Total product revenue

Funded research and development

Total revenue

Fiscal Years Ended March 31,

2017

2016

(in $000's)

423,694
19,116
2,385
445,195
109
445,304

310,138
16,588
2,794
329,520
23
329,543

Impella product revenue encompasses Impella 2.5, Impella CP, Impella 5.0, Impella LD, Impella RP and Impella AIC product

sales. Service and other revenue represents revenue earned on service maintenance contracts and preventative maintenance calls.
Other product revenue includes AB5000 and product accessory revenue.

Total revenue for fiscal 2017 increased $115.8 million, or 35%, to $445.3 million from $329.5 million for fiscal 2016. The
increase in total revenue was primarily due to increased Impella product revenue from increased utilization in the U.S. and Germany.
Impella product revenue was higher as a result of recent PMA approvals in the U.S. in March 2015 for elective and high risk PCI
procedures for Impella 2.5 and in April 2016 for cardiogenic shock for Impella 2.5, Impella CP, Impella 5.0 and Impella LD and in
December 2016, to add Impella CP device for use in elective and high risk procedures.

Impella product revenue for fiscal 2017 increased by $113.6 million, or 37%, to $423.7 million from $310.1 million for fiscal

2016. Most of the increase in Impella product revenue was from increased device sales in the U.S. related to our recent PMA
approvals, as we focus on increasing utilization of our disposable catheter products through continued investment in our field
organization and physician training programs. Impella product revenue outside of the U.S. grew in fiscal 2017 primarily due to
increased utilization in Germany as we expand our field organization in that country. We expect product revenue from our Impella
product line to continue to increase due to our recent PMAs in the U.S., continued controlled launch of Impella RP devices in the U.S.
and expansion efforts in Europe, particularly Germany.

Service and other revenue for fiscal 2017 increased by $2.5 million, or 15%, to $19.1 million from $16.6 million for fiscal 2016.
The increase in service revenue was primarily due to an increase in preventative maintenance service contracts. We have expanded the
number of Impella AIC consoles to most of our using sites and placed more consoles at existing higher using sites. Many of these sites
have entered into service contracts for maintenance support of their consoles. We expect revenue growth for service revenue to be
slower than product sales in the near future as most of our customers currently have service contracts with three year terms.

Other product revenue for fiscal 2017 decreased by $0.4 million, or 14%, to $2.4 million from $2.8 million for fiscal 2016. Most

of the decrease was due to lower AB5000 sales in the U.S. We expect that AB5000 revenue will be insignificant in the future as we
are no longer manufacturing the AB5000 device and we only expect to have a minimal amount of AB5000 sales, primarily outside of
the U.S. We have transitioned our sales focus in the surgical suite on Impella 5.0, Impella LD and Impella RP devices.

Costs and Expenses

Cost of Product Revenue

Cost of product revenue for fiscal 2017 increased by $20.2 million, or 40%, to $70.6 million from $50.4 million for fiscal 2016.

Gross margin was 84% for fiscal 2017 and 85% for fiscal 2016. The increase in cost of product revenues was related to increased
growing demand for Impella devices and higher production volume and costs to support growing demand for our Impella devices. The
increase in cost of product revenue was related to higher demand for our Impella devices and higher production volume and costs to
support growing demand for our Impella devices. The decrease in gross margin was primarily due to larger number of shipments of
AICs during fiscal 2017 and an increased investment in direct labor and overhead as we expand our manufacturing capacity.

Research and Development Expenses

Research and development expenses for fiscal 2017 increased by $16.6 million, or 33%, to $66.4 million from $49.8 million for
fiscal 2016. The increase in research and development expenses was primarily due to product development initiatives on our existing
products and new technologies as we expanded our engineering organization, increased clinical spending primarily related to our
cVAD Registry™ and our continued focus on quality initiatives for our Impella devices.

We expect research and development expenses to continue to increase in fiscal 2018 as we continue to increase clinical

spending related to our cVAD Registry™ and the STEMI trial and incur additional costs as we continue to focus on engineering
initiatives to improve our existing products and develop new technologies.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for fiscal 2017 increased by $53.9 million, or 33%, to $218.2 million from $164.3
million for fiscal 2016. The increase in selling, general and administrative expenses was primarily due to the hiring of additional field
sales and clinical personnel in the U.S. and Germany, increased spending on marketing initiatives as we continue to educate
physicians on the benefits of hemodynamic support after receiving PMAs in the U.S. for Impella 2.5, Impella CP, Impella 5.0 and
Impella LD devices, higher stock-based compensation expense and higher legal expenses related to the FCA Investigation, ongoing
patent litigation and other legal matters discussed in “Note 11. Commitments and Contingencies—Litigation,” to our consolidated
financial statements.

We expect to continue to increase our expenditures on sales and marketing activities, with particular investments in field sales
and clinical personnel with cath lab expertise to drive recovery awareness for acute heart failure patients. We also plan to increase our
marketing, service and training investments as a result of recent PMA approvals in the U.S. for our Impella devices and as we expand
to new markets outside of the U.S., such as Japan. We also expect to continue to incur significant legal expenses for the foreseeable
future related to the FCA Investigation and patent related matters. Our selling, general and administrative expense could increase in
the fourth quarter of fiscal 2018 with the potential return of the medical device tax in the U.S. in January 2018, that was temporarily
halted in January 2016.

Income Tax Provision

We recorded an income tax provision of $39.2 million for fiscal 2017, compared to $27.7 million for fiscal 2016. The increase

in income tax provision for fiscal 2017 was due primarily to higher income in fiscal 2017 due to higher Impella product revenue.

Net Income

For fiscal 2017, we recognized net income of $52.1 million, or $1.21 per basic share and $1.17 per diluted share, compared to

$38.1 million, or $0.90 per basic share and $0.85 per diluted share for fiscal 2016. Our net income for fiscal 2017 was driven
primarily to higher Impella product revenue due to greater utilization of our Impella devices in the U.S. and Europe.

As described within Note 2. “Summary of Significant Accounting Policies” to our consolidated financial statements in this
Report, we will adopt ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based
Payment Accounting, in the first quarter of fiscal 2018. We believe that the adoption of ASU 2016-09 will have a significant impact on
our consolidated financial statements, most notably, the requirement to recognize certain tax benefits or shortfalls upon restricted
stock unit vestings or stock option exercises in the income tax provision in our consolidated statement of operations. The adoption
of ASU 2016-09 is likely to introduce fluctuations to net income, our income tax provision and earnings per share in fiscal 2018.

Fiscal Years Ended March 31, 2016 and March 31, 2015 (“fiscal 2016” and “fiscal 2015”)

Revenue

Our revenue is comprised of the following:

Impella product revenue
Service and other revenue
Other products

Total product revenue

Funded research and development

Total revenue

Fiscal Years Ended March 31,

2016

2015

(in $000's)

310,138
16,588
2,794
329,520
23
329,543

212,665
13,768
3,517
229,950
361
230,311

Impella product revenue encompasses Impella 2.5, Impella CP, Impella 5.0, Impella LD, Impella RP and Impella AIC product

sales. Service and other revenue represents revenue earned on service maintenance contracts and preventative maintenance calls.
Other product revenue includes AB5000 and product accessory revenue.

Total revenue for fiscal 2016 increased by $99.2 million, or 43%, to $329.5 million from $230.3 million for fiscal 2015. The

increase in total revenue was primarily due to higher Impella revenue due mainly to greater utilization of our products in the U.S.

Impella product revenue for fiscal 2016 increased by $97.4 million, or 46%, to $310.1 million from $212.7 million for fiscal

2015. Most of our increase in Impella revenue was from disposable catheter sales in the U.S., as we focus on increasing utilization of
our disposable catheter products through continued investment in our field organization and physician training programs.

Service and other revenue for fiscal 2016 increased by $2.8 million, or 20%, to $16.6 million from $13.8 million for fiscal 2015.

The increase in service revenue was primarily due to an increase in preventative maintenance service contracts, as we expand the use
of our Impella AIC consoles to additional sites.

Other product revenue for fiscal 2016 decreased by $0.7 million, or 20%, to $2.8 million from $3.5 million for fiscal 2015. The
decrease in other revenue was due to a decline in AB5000 disposable sales. We also had no sales of BVS 5000 in fiscal 2015 and we
are no longer actively producing or selling that device.

Costs and Expenses

Cost of Product Revenue

Cost of product revenue for fiscal 2016 increased by $10.5 million, or 26%, to $50.4 million from $39.9 million for fiscal 2015.

Gross margin was 83% for fiscal 2016 and 80% for fiscal 2015. The increase in cost of product revenues was related to increased
demand for Impella devices and higher production volume and costs to support growing demand for our Impella devices. Gross
margin was impacted favorably in fiscal 2016 by higher manufacturing production volume, fewer shipments of Impella AIC consoles,

improved efficiencies in manufacturing production and favorable foreign currency impact of lower Euro as much of our
manufacturing is performed in Germany.

Research and Development Expenses

Research and development expenses for fiscal 2016 increased by $13.8 million, or 38%, to $49.8 million from $36.0 million in
fiscal 2015. The increase in research and development expenses was primarily due to product development initiatives on our existing
products and new technologies, increased clinical spending primarily related to our cVAD Registry™ and post approval studies, a
focus on quality initiatives for our Impella devices and a full year of activities related to our ECP purchase that was completed in July
2014.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for fiscal 2016 increased by $38.6 million, or 31%, to $164.3 million from $125.7
million in fiscal 2015. The increase in selling, general and administrative expenses was primarily due to the hiring of additional U.S.
field sales and clinical personnel, increased spending on marketing initiatives as we continue to educate physicians on the benefits of
hemodynamic support after receiving PMA approval for Impella 2.5, higher stock-based compensation expense and higher
professional fees to support the growth of our business.

Income Tax Provision

We recorded an income tax provision of $27.7 million in fiscal 2016 compared to an income tax benefit of $84.9 million in
fiscal 2015. The increase in income tax provision for fiscal 2016 was due to the fact that we had a full valuation allowance on most of
our federal, state and certain foreign deferred tax assets prior to March 31, 2015, at which time most of the valuation allowance was
reversed. The income tax provision for fiscal 2016 was primarily due to the income before taxes of $65.8 million generated in fiscal
2016, primarily in the U.S. and Germany. The income tax benefit in fiscal 2015 was comprised of an $87.1 million deferred tax
benefit primarily due to the release of our valuation allowance on certain of our deferred tax assets in the year ended March 31, 2015,
partially offset by a current income tax provision of $2.2 million in U.S and Germany.

Net Income

During fiscal 2016, we recognized net income of $38.1 million, or $0.90 per basic share and $0.85 per diluted share, compared

to $113.7 million, or $2.80 per basic share and $2.65 per diluted share for fiscal 2015. Our net income for fiscal 2016 was driven
primarily to higher Impella product revenue due to greater utilization of our Impella devices in the U.S. and Europe, partially offset by
the increase in income tax provision for fiscal 2016 due to the fact that we had a full valuation allowance on most of our deferred tax
assets prior to March 31, 2015, at which time most of the valuation allowance was reversed. Our net income for fiscal 2015 included
an income tax benefit of $84.9 million, primarily due to the release of our valuation allowance on certain of our deferred tax assets.

Liquidity and Capital Resources

At March 31, 2017, our total cash, cash equivalents, and short and long-term marketable securities totaled $277.1 million, an
increase of $64.0 million compared to $213.1 million at March 31, 2016. The increase in our cash, cash equivalents, and short and
long-term marketable securities was due primarily to positive cash flows from operations in fiscal 2017.

A summary of our cash flow activities is as follows:

Net cash provided by operating activities
Net cash used for investing activities
Net cash provided by financing activities
Effect of exchange rate changes on cash
Net (decrease) increase in cash and cash equivalents

For the Year Ended March 31,
2016

2017
115,116
(126,333)
3,867
(1,841)
(9,191) $

76,795
(57,710)
7,160
(415)
25,830

2015

43,290
(49,863)
9,523
(1,465)
1,485

Cash Provided by Operating Activities

For the year ended March 31, 2017, cash provided by operating activities consisted of net income of $52.1 million, adjustments

for non-cash items of $57.7 million and cash provided from working capital of $5.3 million. Our net income for fiscal 2017 was
driven primarily to higher Impella product revenue due to greater utilization of our Impella devices in the U.S. and Europe, partially

offset by the increase in income tax provision for fiscal 2017. Adjustments for non-cash items consisted primarily of $32.9 million of
stock-based compensation expense, a $25.8 million change in deferred tax provision, $12.0 million in excess tax benefits on stock-
based awards, $6.2 million of depreciation and amortization of property, plant and equipment, $3.1 million of write-downs of
inventory and $1.6 million of changes in fair value of consideration. The increase in cash from changes in working capital included a
$11.6 million increase in accounts receivable associated with higher revenues, a $12.3 million increase in inventory as we build up
inventory safety stock to support growing demand for our Impella devices, a $29.8 million increase in accounts payable and accrued
expenses due to increase in operating expenses.

For the year ended March 31, 2016, cash provided by operating activities consisted of net income of $38.1 million, adjustments

for non-cash items of $54.2 million and cash used in working capital of $15.6 million. Our net income for fiscal 2016 was driven
primarily to higher Impella product revenue due to greater utilization of our Impella devices in the U.S. and Europe, partially offset by
the increase in income tax provision for fiscal 2016. Adjustments for non-cash items consisted primarily of $29.1 million of stock-
based compensation expense, a $22.3 million change in deferred tax provision and $3.3 million of depreciation and amortization of
property, plant and equipment. The decrease in cash from changes in working capital included a $10.9 million increase in accounts
receivable associated with higher revenues, a $11.5 million increase in inventory as we build up inventory safety stock to support
growing demand for our Impella devices, a $7.4 million increase in accounts payable and accrued expenses due to increase in
operating expenses.

For the year ended March 31, 2015, cash provided by operating activities consisted of net income of $113.7 million, less non-

cash items of $65.7 million and cash used for working capital of $4.7 million. The increase in net income in fiscal 2015 included a
deferred income tax benefit of $87.1 million primarily due to the release of our valuation allowance on certain of our deferred tax
assets and higher Impella product revenue due to greater utilization in the U.S. and Europe. Adjustments for non-cash items primarily
consisted of $16.5 million of stock-based compensation expense, $2.8 million of depreciation and amortization of long-lived assets,
$2.2 million of write-downs of inventory and a $0.5 million change in fair value of contingent consideration. The decrease in cash
from changes in working capital included an $8.0 million increase in accounts receivable from higher revenues, a $7.0 million
increase in inventory to support growing demand for our Impella products, and a $1.5 million increase in prepaid expenses. These
amounts were partially offset by $9.4 million increase in accounts payable and accrued expenses due to increase in operating expenses
and an increase in deferred revenue of $2.3 million.

Cash Used in Investing Activities

For the year ended March 31, 2017, net cash used for investing activities included $73.0 million in purchases (net of maturities)

of marketable securities and $50.4 million for the purchase of property and equipment mostly related to the purchase of the Aachen,
Germany facility, expansion of manufacturing cleanroom capacity and office space in Danvers, Massachusetts and Aachen, Germany
and investments in upgrading computer software. We also made $2.9 million of investments in private medical technology companies
during fiscal 2017.

For the year ended March 31, 2016, net cash used for investing activities included $41.3 million in purchases (net of maturities)

of marketable securities and $15.6 million for the purchase of property and equipment mostly related to expansion of manufacturing
cleanroom capacity and office space in Danvers, Massachusetts and Aachen, Germany as well as investments in upgrading computer
software. We also made a $0.8 million investment in a private medical technology company during fiscal 2016.

For the year ended March 31, 2015, net cash used for investing activities included $26.1 million for the purchase (net of
maturities) of marketable securities, $15.7 million for our acquisition of ECP and AIS, $5.2 million for the purchase of property and
equipment mostly related to expansion of manufacturing capacity in Danvers, Massachusetts and Aachen, Germany and $2.9 million
of investments in private medical technology companies.

Capital expenditures for fiscal 2018 are estimated to range from $25 to $35 million, including additional capital expenditures

for manufacturing capacity expansions in our Danvers, Massachusetts and Aachen, Germany facilities, additional office space,
building and leasehold improvements and software development projects.

Cash Provided by Financing Activities

For the year ended March 31, 2017, net cash provided by financing activities included $10.7 million in proceeds from the
exercise of stock options, $1.7 million in proceeds from the issuance of stock under the employee stock purchase plan and $12.0
million in excess tax benefits on stock-based awards. These amounts were partially offset by $20.1 million in payments in lieu of
issuance of common stock for payroll withholding taxes upon vesting of certain equity awards and $0.4 million in principal payments
on capital lease obligation.

For the year ended March 31, 2016, net cash provided by financing activities included $9.8 million in proceeds from the
exercise of stock options, $1.1 million in proceeds from the issuance of stock under the employee stock purchase plan and $3.6 million

in excess tax benefits on stock-based awards. These amounts were partially offset by $7.3 million in payments in lieu of issuance of
common stock for payroll withholding taxes upon vesting of certain equity awards.

For the year ended March 31, 2015, net cash provided by financing activities included $10.9 million in proceeds from the
exercise of stock options, $0.8 million in proceeds from the issuance of stock under the employee stock purchase plan and $0.6 million
in excess tax benefits on stock-based awards. These amounts were partially offset by $2.8 million in payments in lieu of issuance of
common stock for payroll withholding taxes upon vesting of certain equity awards.

Operating Capital and Liquidity Requirements

We believe that our revenue from product sales together with existing resources will be sufficient to fund our operations for at
least the next twelve months, exclusive of activities involving any future acquisitions of products or companies that complement or
augment our existing line of products.

Our primary liquidity requirements are to fund the expansion of our commercial and operational infrastructure in the U.S.,
expand our commercial teams in the U.S. and Europe, increase our manufacturing capacity, incur additional capital expenditures as we
expand our office space and manufacturing capacity in Danvers and Aachen, increase our inventory levels in order to meet growing
customer demand for our Impella devices, fund new product development initiatives, prepare for commercial launches of Impella
devices in new markets in the future, such as Japan, increased clinical spending, costs of legal expenses related to the FCA
Investigation and ongoing patent litigation and to provide for general working capital needs. To date, we have primarily funded our
operations through product sales and the sale of equity securities.

Our liquidity is influenced by our ability to sell our products in a competitive industry and our customers’ ability to pay for our
products. Factors that may affect liquidity include our ability to penetrate the market for our products, maintain or reduce the length of
the selling cycle for our products, capital expenditures, investments in collaborative arrangements with other partners, and our ability
to collect cash from customers after our products are sold. We also expect to continue to incur legal expenses for the foreseeable
future related to the FCA Investigation, ongoing patent litigation and other legal matters. We continue to review our short-term and
long-term cash needs on a regular basis. At March 31, 2017, we had no long-term debt outstanding.

Marketable securities at March 31, 2017 consisted of $238.1 million held in funds that invest in U.S. Treasury, government-

backed securities and corporate debt securities. We are not a party to any interest rate swaps, currency hedges or derivative contracts
of any type and we currently have no exposure to commercial paper or auction rate securities markets.

Cash and cash equivalents held by our foreign subsidiaries totaled $8.2 million and $4.5 million at March 31, 2017 and

March 31, 2016, respectively. Any operating income earned outside the U.S. is intended to be permanently reinvested in foreign
jurisdictions. We do not intend or currently foresee a need to repatriate cash and cash equivalents held by our foreign subsidiaries. If
we ever do need to repatriate cash to the U.S., we believe that the potential U.S. tax impact to repatriate these funds would be
immaterial.

Contractual Obligations and Commercial Commitments

The following table summarizes our contractual obligations at March 31, 2017 and the effects such obligations are expected to

have on our liquidity and cash flows in future periods.

Payments Due By Fiscal Year (in $000’s)

Total

Less than 1
Year

1-3 Years

3-5 Years

More than
5 Years

Capital lease commitments (1)
Operating lease commitments (1)
Contractual obligations (2) (3)
Total obligations

20,518
8,173
1,415
30,106

1,311
1,670
410
3,391

2,698
3,125
670
6,493

2,763
2,626
335
5,724

13,746
752
—
14,498

(1) See Note 11 to our consolidated financial statements entitled “Commitments and Contingencies—Leases” for disclosures

related to our capital and operating lease obligations.

(2) Contractual obligations represent future cash commitments and potential liabilities under agreements with third parties,

primarily for research and development activities, such as clinical trials and material purchases for new product testing. In

April 2014, we entered into an exclusive license agreement for the rights to certain optical sensor technologies in the field of
cardio-circulatory assist devices. Pursuant to the terms of the license agreement, we made a $1.5 million upfront payment
upon execution of the agreement and agreed to make additional payments of up to $4.5 million upon achievement of
specified development milestones. The future milestone payment amounts have not been included in the contractual
obligations table above due to the uncertainty related to the successful achievement of these milestones.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Our business and financial results are affected by fluctuations in world financial markets, including changes in currency
exchange rates and interest rates. We manage these risks through a combination of normal operating and financing activities. We do
not use derivative financial instruments.

Investment and Interest Rate Risk

Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio. Our investment strategy is

focused on preserving capital and supporting our liquidity requirements, while earning a reasonable market return. We invest in a
variety of U.S. government and agency securities and corporate debt securities. The market value of our investments may decline if
current market interest rates rise. Marketable securities at March 31, 2017 consisted of $238.1 million held in funds that invest in U.S.
Treasury and government-backed securities. If market interest rates were to increase immediately and uniformly by 10% from levels
at March 31, 2017, we believe the decline in fair market value of our investment portfolio would be immaterial. Any such declines
would only result in a realized loss if we choose or are forced to sell the investments before the scheduled maturity, which we
currently do not anticipate.

Currency Exchange Rates

We have foreign currency exposure to exchange rate fluctuations and particularly with respect to the euro, British pound sterling

and Japanese yen. Therefore, our investment in our subsidiaries is sensitive to fluctuations in currency exchange rates. The effect of a
change in currency exchange rates on our net investment in international subsidiaries is reflected in the accumulated other
comprehensive income component of stockholders’ equity. If foreign exchange rates for our international subsidiaries were to have
depreciated immediately and uniformly by 10% relative to the U.S. dollar from levels at March 31, 2017, the result would have been a
reduction of stockholders’ equity of approximately $7.4 million.

Concentrations of Risk

In the normal course of business, we provide credit to customers in the health care industry, perform credit evaluations of these

customers, and maintain allowances for potential credit losses, which have historically been adequate compared to actual losses.
In fiscal 2017, we had no customers that represented 10% or more of our total net sales or accounts receivable.

Other Investment Risk

We are exposed to investment risks related to changes in the underlying financial condition and credit capacity of certain of our
other investments. We periodically make investments in private medical device companies that focus on heart failure and heart pump
technologies. The aggregate carrying amount of our other investments was $7.2 million and $4.4 million at March 31, 2017 and 2016,
respectively, and is classified within other assets in the consolidated balance sheets. We periodically monitor these investments for
other than temporary declines in market value. Should these companies experience a decline in financial condition or credit capacity,
or fail to meet certain development milestones, a decline in the investments' values may occur, resulting in unrealized or realized
losses.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this item is incorporated by reference from the discussion under the heading Part IV, Item 15

“Exhibits, Financial Statement Schedules” of this Annual Report on Form 10-K.

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the

effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) as of March 31, 2017. Based on this evaluation, our principal executive officer and principal financial
officer concluded that, as of March 31, 2017, these disclosure controls and procedures were effective to provide reasonable assurance
that material information required to be disclosed by us, including our consolidated subsidiaries, in reports that we file or submit under
the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the Commission rules and
forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information
required to be disclosed by us in the reports that we file or submit under the Act is accumulated and communicated to our
management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions
regarding required disclosure.

Evaluation of Changes in Internal Control over Financial Reporting

During the fourth quarter of our fiscal year ended March 31, 2017, there were no changes in our internal control over financial

reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term

is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our
principal executive officer and principal financial officer, we assessed the effectiveness of our internal control over financial reporting
based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of
the Treadway Commission. Based on our assessment under the framework in Internal Control—Integrated Framework (2013), our
management concluded that our internal control over financial reporting was effective as of March 31, 2017.

Important Considerations

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of

financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the
financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Deloitte & Touche LLP, an independent registered public accounting firm that audited our financial statements for the fiscal year

ended March 31, 2017, included in this annual report, has issued an attestation report on the effectiveness of our internal control over
financial reporting. This report is set forth below:

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
ABIOMED, Inc.
Danvers, Massachusetts

We have audited the internal control over financial reporting of ABIOMED, Inc. and subsidiaries (the “Company”) as of March 31,
2017 based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control
over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the
accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the
Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over
financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of
internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal
executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors,
management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control
over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management
and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper
management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis.
Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to
the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31,
2017, based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
consolidated financial statements as of and for the year ended March 31, 2017 of the Company and our report dated May 25, 2017
expressed an unqualified opinion on those financial statements.

/s/ DELOITTE & TOUCHE LLP

Boston, Massachusetts
May 25, 2017

ITEM 9B. OTHER INFORMATION

Not applicable.

PART III

ITEM 10. DIRECTOR, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by Item 10 is incorporated by reference from our definitive proxy statement which will be filed no

later than 120 days after the close of the fiscal year covered by this Annual Report on Form 10-K.

We have a Code of Conduct and Compliance Policy that applies to all of its directors, officers, and employees. Our Code of
Conduct and Compliance Policy is disclosed on our website and a paper copy of this document may be obtained free of charge by
writing to the Company’s Chief Compliance Officer at the Company’s corporate headquarters located at 22 Cherry Hill Drive,
Danvers, Massachusetts 01923, or by email at IR@abiomed.com.

ITEM 11.

EXECUTIVE COMPENSATION

The information required by Item 11 is incorporated by reference from our definitive proxy statement which will be filed no

later than 120 days after the close of the fiscal year covered by this Annual Report on Form 10-K.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCK HOLDER MATTERS

The information required by Item 12 is incorporated by reference from our definitive proxy statement which will be filed no

later than 120 days after the close of the fiscal year covered by this Annual Report on Form 10-K.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by Item 13 is incorporated by reference from our definitive proxy statement which will be filed no

later than 120 days after the close of the fiscal year covered by this Annual Report on Form 10-K.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by Item 14 is incorporated by reference from our definitive proxy statement which will be filed no

later than 120 days after the close of the fiscal year covered by this Annual Report on Form 10-K.

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this report:

PART IV

(1) The financial statements from our Annual Report for our fiscal year ending March 31, 2017 are attached hereto.

Report of Independent Registered Public Accounting Firm...........................................................................................................
Consolidated Balance Sheets as of March 31, 2017 and 2016 .......................................................................................................
Consolidated Statements of Operations for the Fiscal Years Ended March 31, 2017, 2016 and 2015 ..........................................
Consolidated Statements of Comprehensive Income for the Fiscal Years Ended March 31, 2017, 2016 and 2015
Consolidated Statements of Stockholders’ Equity for the Fiscal Years Ended March 31, 2017, 2016 and 2015..........................
Consolidated Statements of Cash Flows for the Fiscal Years Ended March 31, 2017, 2016 and 2015.........................................
Notes to Consolidated Financial Statements ..................................................................................................................................

F-2
F-3
F-4
F-5
F-6
F-7
F-8

Page

(2) Consolidated financial statement schedule

Information is contained within Note 4. “Accounts Receivable” to our consolidated financial statements in this Report.

(3) Exhibits

EXHIBIT INDEX

Exhibit
No.

2.1

2.2

3.1

3.2

3.3

Exhibit
No.

2.1

2.2

2.3

3.1

3.2

3.3*

3.4

Description

Share Purchase Agreement for the acquisition of
Impella Cardio Systems AG, dated April 26,
2005.

Agreement on the Sale and Transfer of all shares
in ECP Entwicklungsgellschaft mbH

Agreement on the Sale and Transfer of all shares
in AIS GmbH Aachen Innovative Solutions

Filed with
this Form
10-K

Incorporated by Reference

Form

Filing Date

8-K (File No.
001-09585)

May 16, 2005

July 7, 2014

Restated Certificate of Incorporation.

S-3

September 29, 1997

Restated By-Laws, as amended.

Certificate of Designations of Series A Junior
Participating Preferred Stock—filed as Exhibit
3.3 to the 1997 Registration Statement.

Amendment to the Company’s Restated
Certificate of Incorporation to increase the
authorized shares of common stock from
25,000,000 to 100,000,000.

4.1

Specimen Certificate of common stock.

10.1*

10.2*

10.3*

Form of Indemnification Agreement for Directors
and Officers.

Amendment to 1992 Combination Stock Option
Plan.

1988 Employee Stock Purchase Plan, as
amended.

10-K (File No.
001-09585)

May 27, 2004

S-3

September 29, 1997

8-K (File No.
001-09585)

March 21, 2007

3.4

S-1

June 5, 1987

4.1

June 5, 1987

10.13

10-Q (File No.
001-09585)

October 14, 1997

10.2

February 8, 2005

10.11

Exhibit
No.

10.4*

Description

1989 Non-Qualified Stock Option Plan for Non-
Employee Directors.

10.5*

1998 Equity Incentive Plan.

10.6*

10.7*

10.8*

10.9*

10.10*

10.11*

2000 Stock Incentive Plan Agreement, as
amended.

Form of Abiomed, Inc. Non-Statutory Stock
Option Agreement for the 2000 Stock Incentive
Plan for Directors.

Form of Abiomed, Inc. Non-Statutory Stock
Option Agreement for the 2000 Stock Incentive
Plan for Employees or Consultants.

Fourth Amended and Restated 2008 Stock
Incentive Plan.

Form of Non-Statutory Stock Option Agreement
for Employees and Consultants under 2008 Stock
Incentive Plan.

Form of Non-Statutory Stock Option Agreement
for Non-Employee Directors under 2008 Stock
Incentive Plan.

10.12*

Form of Restricted Stock Agreement under 2008
Stock Incentive Plan.

10.13*

2015 Omnibus Incentive Plan.

10.14*

10.15*

10.16*

10.17*

10.18*

10.19*

10.20*

10.21*

Form of TSR Award (Performance and Time-
Based RSU).

TSR Award Agreement (Performance- and Time-
Based RSU) of Michael R. Minogue dated
November 14, 2016.

Form of Employee Time-Based RSU Agreement
under the 2015 Omnibus Incentive Plan.

Form of Non-Employee Director Time-Based
RSU Agreement under the 2015 Omnibus
Incentive Plan.

Form of Field Employee Time-Based Option
Agreement under the 2015 Omnibus Incentive
Plan.

Form of Performance-Based RSU Agreement
under the 2015 Omnibus Incentive Plan.

Form of Non-Employee Director Time-Based
Option Agreement.

Employment Agreement of Michael R. Minogue
dated April 5, 2004 (including Change in Control

Filed with
this Form
10-K

Incorporated by Reference

Form

Filing Date

October 27, 1995

Exhibit
No.

10.1

10-Q (File No.
001-09585)

10-Q/A (File No.
001-09585)

Sch. 14A (File No.
001-09585)

10-Q (File No.
001-09585)

10-K (File No.
001-09585)

8-K (File No.
001-09585)

Sch. 14A (File No.
001-09585)

10-Q (File No.
001-09585)

January 8, 1999

July 15, 2005

Appendix A

February 9, 2006

10.16

February 9, 2006

10.17

May 28, 2015

10.29

August 18, 2008

10.1

August 18, 2008

10.2

August 18, 2008

10.3

July 2, 2015

Appendix A

August 6, 2015

10.4

February 3, 2017

10.1

10-Q (File No.
001-09585)

February 5, 2016

10.4

10-Q (File No.
001-09585)

February 5, 2016

10.7

August 9, 2004

10.10

Exhibit
No.

10.22*

10.23*

10.24*

10.25*

10.26*

10.27*

10.28*

10.29*

10.30*

Agreement).

Description

Amendment to Employment Agreement with
Michael R. Minogue dated December 31, 2008.

Change in Control Severance Agreement with
Michael J. Tomsicek dated September 27, 2016.

Inducement stock option granted to Michael R.
Minogue dated April 5, 2004.

Restricted Stock Agreement between Abiomed,
Inc. and Michael R. Minogue.

Offer Letter with Robert L. Bowen dated
December 15, 2008.

Offer letter with David Weber dated April 23,
2007.

Offer letter with Michael J. Tomsicek dated May
26, 2015.

Retirement Agreement with Robert L. Bowen
dated May 26, 2015.

10.31*

Summary of Executive Compensation.

10.32*

10.33

10.34

10.35

10.36

10.37

Form of Employment, Nondisclosure and Non-
Competition Agreement.

Lease agreement dated July 29, 2013 for the
facility located in Aachen, Germany.

Lease agreement for additional commercial space
dated October 19, 2015 for the facility located in
Aachen, Germany.

Supplemental contract no. 1 dated October 19,
2015, to the lease agreement dated July 29, 2013
for the facility located in Aachen, Germany.

Amended and Restated Lease dated as of
February 24, 2014 between Abiomed, Inc. and
Leo C. Thibeault, Jr., Trustee of The Thibeault
Nominee Trust.

Amended Lease dated as of April 30, 2015
between Abiomed, Inc. and Leo C. Thibeault, Jr.,
Trustee of The Thibeault Nominee Trust.

10.38*

Form of Change of Control Agreement.

10.39

Purchase and Sale Agreement dated as of
December 9, 2015 between Abiomed, Inc. and
Thibeault Nominee Trust.

Filed with
this Form
10-K

Incorporated by Reference

Form

Filing Date

Exhibit
No.

10-Q (File No.
001-09585)

8-K (File No.
001-09585)

10-Q (File No.
001-09585)

10-K (File No.
001-09585)

10-Q (File No.
001-09585)

10-K (File No.
001-09585)

8-K (File No.
001-09585)

10-Q (File No.
001-09585)

February 9, 2009

10.1

February 9, 2009

10.1

November 4, 2016

10.2

August 9, 2004

10.11

October 9, 2005

10.15

December 22, 2008

99.2

August 9, 2007

10.1

August 6, 2015

10.2

August 6, 2015

10.3

June 14, 2006

10.20

November 8, 2013

10.1

November 4, 2015

10.1

November 4, 2015

10.2

May 28, 2014

10.27

May 28, 2015

10.29

August 18, 2008

10.4

February 5, 2016

10.1

Description

Filed with
this Form
10-K

Incorporated by Reference

Form

Filing Date

Exhibit
No.

10.40

10.41

10.42

First Amendment to Purchase and Sale
Agreement dated as of January 19, 2016 between
Abiomed, Inc. and Thibeault Nominee Trust.

Lease Agreement dated August 12, 2016 between
Abiomed, Inc. and Leo C. Thibeault, Jr., Trustee
of the Thibeault Nominee Trust.

Purchase and Sale Agreement dated as of
December 16, 2016 between Abiomed, Inc. and
gewoge AG and Thibeault Nominee Trust for the
facility located in Aachen, Germany

10.43*

Form of Employee Time-Based Option
Agreement under the 2015 Omnibus Incentive
Plan.

11.1

21.1

23.1

31.1

31.2

32.1

101

Statement regarding computation of Per Share
Earnings (see Note 2, Notes to Consolidated
Financial Statements).

Subsidiaries of the Registrant.

Consent of Deloitte & Touche LLP, independent
registered public accounting firm.

Rule 13a—14(a)/15d—14(a) certification of
principal executive officer.

Rule 13a—14(a)/15d—14(a) certification of
principal accounting officer.

Section 1350 certification.

The following financial information from the
ABIOMED, Inc. Annual Report on Form 10-K
for the fiscal year ended March 31, 2017,
formatted in Extensible Business Reporting
Language (XBRL): (i) Consolidated Balance
Sheets as of March 31, 2017 and 2016; (ii)
Consolidated Statements of Operations for the
fiscal years ended March 31, 2017, 2016 and
2015; (iii) Consolidated Statements of
Comprehensive Income for the fiscal years ended
March 31, 2017, 2016 and 2015; (iv)
Consolidated Statements of Stockholders’ Equity
for the fiscal years ended March 2017, 2016 and
2015; (v) Consolidated Statements of Cash Flows
for the fiscal years ended March 31, 2017, 2016
and 2015; and (vi) Notes to Consolidated
Financial Statements.

* Management contract or compensatory plan.

Item 16. Form 10-K Summary.

None.

10-Q (File No.
001-09585)

February 5, 2016

10.2

November 4, 2016

10.1

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on

its behalf by the undersigned, thereunto duly authorized.

Dated: May 25, 2017

/s/ MICHAEL J. TOMSICEK

ABIOMED, Inc.

Michael J. Tomsicek
Vice President, Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons

on behalf of the registrant and in the capacities and on the dates indicated.

SIGNATURE

TITLE

/s/ MICHAEL R. MINOGUE
Michael R. Minogue

President, Chief Executive Officer, President and Chairman
(Principal Executive Officer)

/s/ MICHAEL J. TOMSICEK
Michael J. Tomsicek

Vice President, Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)

/s/ DOROTHY E. PUHY

Director

Dorothy E. Puhy

/s/

JEANNINE M. RIVET
Jeannine M. Rivet

Director

/s/ ERIC A. ROSE, M.D.

Director

Eric A. Rose, M.D.

/s/ MARTIN P. SUTTER

Director

Martin P. Sutter

/s/ PAUL G. THOMAS

Director

Paul G. Thomas

/s/ CHRIS D. VAN GORDER

Director

Chris D. Van Gorder

DATE

May 25, 2017

ABIOMED, INC.

Consolidated Financial Statements

Index

Report of Independent Registered Public Accounting Firm............................................................................................................
Consolidated Balance Sheets as of March 31, 2017 and 2016 ........................................................................................................
Consolidated Statements of Operations for the Fiscal Years Ended March 31, 2017, 2016 and 2015 ...........................................
Consolidated Statements of Comprehensive Income for the Fiscal Years Ended March 31, 2017, 2016 and 2015.......................
Consolidated Statements of Stockholders’ Equity for the Fiscal Years Ended March 31, 2017, 2016 and 2015 ...........................
Consolidated Statements of Cash Flows for the Fiscal Years Ended March 31, 2017, 2016 and 2015 ..........................................
Notes to Consolidated Financial Statements....................................................................................................................................

Page

F-2
F-3
F-4
F-5
F-6
F-7
F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
ABIOMED, Inc.
Danvers, Massachusetts

We have audited the accompanying consolidated balance sheets of ABIOMED, Inc. and subsidiaries (the “Company”) as of March 31,
2017 and 2016, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for
each of the three years in the period ended March 31, 2017. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of ABIOMED, Inc.
and subsidiaries as of March 31, 2017 and 2016, and the results of their operations and their cash flows for each of the three years in
the period ended March 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
Company’s internal control over financial reporting as of March 31, 2017, based on the criteria established in Internal Control—
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report
dated May 25, 2017 expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

Boston, Massachusetts
May 25, 2017

F-2

ABIOMED, INC. AND SUBSIDIARIES

Consolidated Balance Sheets
(in thousands, except share data)

March 31, 2017

March 31, 2016

ASSETS
Current assets:

Cash and cash equivalents
Short-term marketable securities
Accounts receivable, net
Inventories
Prepaid expenses and other current assets

Total current assets
Long-term marketable securities
Property and equipment, net
Goodwill
In-process research and development
Long-term deferred tax assets, net
Other assets
Total assets
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:

Accounts payable
Accrued expenses and other liabilities
Deferred revenue
Current portion of capital lease obligation

Total current liabilities
Other long-term liabilities
Contingent consideration
Long-term deferred tax liabilities
Capital lease obligation, net of current portion
Total liabilities
Commitments and contingencies (Note 11)
Stockholders' equity:

Class B Preferred Stock, $.01 par value

Authorized - 1,000,000 shares; Issued and outstanding - none

Common stock, $.01 par value

Authorized - 100,000,000 shares; Issued - 45,249,281 shares at March 31, 2017 and
43,973,119 shares at March 31, 2016;
Outstanding - 43,673,286 shares at March 31, 2017 and 42,596,228 shares at March
31, 2016

Additional paid in capital
Accumulated deficit
Treasury stock at cost - 1,575,995 shares at March 31, 2017 and 1,376,891 shares at
March 31, 2016
Accumulated other comprehensive loss

Total stockholders' equity
Total liabilities and stockholders' equity

39,040
190,908
54,055
34,931
8,024
326,958
47,143
87,777
31,045
14,482
34,723
8,286
550,414

20,620
37,703
10,495
799
69,617
3,251
9,153
783
15,539
98,343

—

437

48,231
163,822
42,821
26,740
6,778
288,392
1,000
23,184
33,003
15,396
58,534
4,422
423,931

9,381
28,382
8,778
—
46,541
220
7,563
832
—
55,156

—

426

565,962
(46,959)

(46,763)
(20,606)
452,071
550,414

508,624
(99,075)

(26,660)
(14,540)
368,775
423,931

The accompanying notes are an integral part of the consolidated financial statements.

F-3

ABIOMED, INC. AND SUBSIDIARIES

Consolidated Statements of Operations
(in thousands, except per share data)

Revenue:

Product revenue
Funded research and development

Costs and expenses:

Cost of product revenue
Research and development
Selling, general and administrative

Income from operations
Other income:

Investment income, net
Other (expense) income, net

Income before income taxes
Income tax provision (benefit)
Net income

Basic net income per share
Basic weighted average shares outstanding

Diluted net income per share
Diluted weighted average shares outstanding

2017

Fiscal Years Ended March 31,
2016

2015

445,195
109
445,304

70,627
66,386
218,153
355,166
90,138

1,554
(349)
1,205
91,343
39,227
52,116

1.21
43,238

1.17
44,658

329,520
23
329,543

50,419
49,759
164,261
264,439
65,104

395
339
734
65,838
27,691
38,147

0.90
42,204

0.85
44,895

229,950
361
230,311

39,945
35,973
125,727
201,645
28,666

196
(97)
99
28,765
(84,923)
113,688

2.80
40,632

2.65
42,858

The accompanying notes are an integral part of the consolidated financial statements.

F-4

ABIOMED, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income
(in thousands)

Net income

Other comprehensive (loss) income:

Foreign currency translation (losses) gains
Net unrealized (losses) gain on marketable securities

Other comprehensive (loss) income

Fiscal Years Ended March 31,

2017

2016

2015

52,116

38,147

113,688

(5,855)
(211)
(6,066)

2,724
66
2,790

(16,613)
13
(16,600)

Comprehensive income

46,050

40,937

97,088

The accompanying notes are an integral part of the consolidated financial statements.

F-5

l
a
t
o
T

'
s
r
e
d
l
o
h
k
c
o
t
S

y
t
i
u
q
E

d
e
t
a
l
u
m
u
c
c
A

r
e
h
t
O

e
v
i
s
n
e
h
e
r
p
m
o
C

)
s
s
o
L

(

e
m
o
c
n
I

d
e
t
a
l
u
m
u
c
c
A

t
i
c
i
f
e
D

l
a
n
o
i
t
i
d
d
A

d
i
a
P

l
a
t
i
p
a
C

t
n
u
o
m
A

f
o
r
e
b
m
u
N

s
e
r
a
h
s

r
a
P

e
u
l
a
v

f
o
r
e
b
m
u
N

s
e
r
a
h
s

3
5
3
,
8
6
1

)
0
3
7
(

)
0
1
9
,
0
5
2
(

6
3
1
,
6
3
4

)
4
5
5
,
6
1
(

7
6
3
,
6
0
2
,
1

1
1
4

8
2
3
,
6
1
9
,
9
3

S
E
I
R
A
I
D
I
S
B
U
S
D
N
A

C
N
I

D
E
M
O
I
B
A

y
t
i
u
q
E

’
s
r
e
d
l
o
h
k
c
o
t
S
f
o

s
t
n
e
m
e
t
a
t
S
d
e
t
a
d

i
l
o
s
n
o
C

)
s
d
n
a
s
u
o
h
t
n

s
r
a
l
l
o
d
(

k
c
o
t
S
y
r
u
s
a
e
r
T

k
c
o
t
S
n
o
m
m
o
C

6
7

5
9
7

7
2
9
,
0
1

)
5
0
8
,
2
(

0
2
5
,
6
1

6
0
6

)
0
0
6
,
6
1
(

8
8
6
,
3
1
1

0
6
5
,
1
9
2

5
6

1
7
7
,
9

5
3
1
,
1

)
3
1
3
,
7
(

3
5
0
,
9
2

7
6
5
,
3

0
9
7
,
2

7
4
1
,
8
3

5
7
7
,
8
6
3

7
6

0
2
7
,
1

0
6
6
,
0
1

)
5
0
1
,
0
2
(

6
6
8
,
2
3

8
3
0
,
2
1

)
6
6
0
,
6
(

6
1
1
,
2
5

1
7
0
,
2
5
4

)
0
3
3
,
7
1
(

)
0
0
6
,
6
1
(

0
9
7
,
2

)
0
4
5
,
4
1
(

)
6
6
0
,
6
(

8
8
6
,
3
1
1

)
5
(

8
1
9
,
0
1

6
7

5
9
7

6
0
6

0
2
5
,
6
1

)
3
9
7
,
2
(

7
7
5
,
6
7

)
2
1
(

0
2
4
,
3
4
5

3
5
5
,
1
1
9

4
5
9
,
1

5
9
0
,
9
3

)
7
7
5
,
6
7
(

)
2
2
2
,
7
3
1
(

6
4
0
,
5
6
4

)
7
4
3
,
9
1
(

4
4
9
,
2
8
2
,
1

3
1
4

3
7
7
,
5
3
3
,
1
4

)
5
7
0
,
9
9
(

7
4
1
,
8
3

6
1
1
,
2
5

)
5
(

3
6
7
,
9

5
3
1
,
1

5
6

7
6
5
,
3

3
5
0
,
9
2

)
3
1
3
,
7
(

7
4
9
,
3
9

4
7
7

1
7
4
,
7
0
5

5
8
3
,
9
2
8

2
7
7
,
6
1

)
7
4
9
,
3
9
(

4
2
6
,
8
0
5

)
0
6
6
,
6
2
(

1
9
8
,
6
7
3
,
1

6
2
4

8
2
2
,
6
9
5
,
2
4

)
5
(

0
2
7
,
1

2
5
6
,
0
1

7
6

6
6
8
,
2
3

8
3
0
,
2
1

4
6
5

7
1
4
,
2
0
5

3
9
8
,
4
5
7

8
8
2
,
8
1

)
6
0
6
,
0
2
(

)
9
5
9
,
6
4
(

2
6
9
,
5
6
5

)
3
6
7
,
6
4
(

5
9
9
,
5
7
5
,
1

7
3
4

6
8
2
,
3
7
6
,
3
4

.
s
t
n
e
m
e
t
a
t
s

l
a
i
c
n
a
n
i
f

d
e
t
a
d
i
l
o
s
n
o
c

e
h
t

f
o

t
r
a
p
l
a
r
g
e
t
n
i

n
a
e
r
a

s
e
t
o
n
g
n
i
y
n
a
p
m
o
c
c
a
e
h
T

6
-
F

k
c
o
t
s

d
e
t
c
i
r
t
s
e
r

n
o
s
e
x
a
t

g
n
i
d
l
o
h
h
t
i

w
y
a
p
o
t

k
c
o
t
s

n
o
m
m
o
c

f
o
n
r
u
t
e
R

n
a
l
p
e
s
a
h
c
r
u
p

k
c
o
t
s

e
e
y
o
l
p
m
e

r
e
d
n
u
d
e
u
s
s
i

k
c
o
t
S

s
r
o
t
c
e
r
i
d
o
t
d
e
u
s
s
i

k
c
o
t
S

s
d
r
a
w
a
d
e
s
a
b
-
k
c
o
t
s
m
o
r
f

t
i
f
e
n
e
b

x
a
t

s
s
e
c
x
E

e
s
n
e
p
x
e

n
o
i
t
a
s
n
e
p
m
o
c

k
c
o
t
S

d
e
u
s
s
i

s
t
i
n
u

k
c
o
t
s
d
e
t
c
i
r
t
s
e
R

d
e
s
i
c
r
e
x
e

s
n
o
i
t
p
o

k
c
o
t
S

4
1
0
2

,
1
3

h
c
r
a

,
e
c
n
a
l
a
B

s
s
o
l

e
v
i
s
n
e
h
e
r
p
m
o
c

r
e
h
t
O

e
m
o
c
n
i

t
e
N

d
e
u
s
s
i

s
t
i
n
u

k
c
o
t
s
d
e
t
c
i
r
t
s
e
R

d
e
s
i
c
r
e
x
e

s
n
o
i
t
p
o

k
c
o
t
S

5
1
0
2

,
1
3

h
c
r
a

,
e
c
n
a
l
a
B

k
c
o
t
s

d
e
t
c
i
r
t
s
e
r

n
o
s
e
x
a
t

g
n
i
d
l
o
h
h
t
i

w
y
a
p
o
t

k
c
o
t
s

n
o
m
m
o
c

f
o
n
r
u
t
e
R

n
a
l
p
e
s
a
h
c
r
u
p

k
c
o
t
s

e
e
y
o
l
p
m
e

r
e
d
n
u
d
e
u
s
s
i

k
c
o
t
S

s
r
o
t
c
e
r
i
d
o
t
d
e
u
s
s
i

k
c
o
t
S

s
d
r
a
w
a
d
e
s
a
b
-
k
c
o
t
s
m
o
r
f

t
i
f
e
n
e
b

x
a
t

s
s
e
c
x
E

e
s
n
e
p
x
e

n
o
i
t
a
s
n
e
p
m
o
c

k
c
o
t
S

n
a
l
p
e
s
a
h
c
r
u
p

k
c
o
t
s

e
e
y
o
l
p
m
e

r
e
d
n
u
d
e
u
s
s
i

k
c
o
t
S

s
r
o
t
c
e
r
i
d
o
t
d
e
u
s
s
i

k
c
o
t
S

e
m
o
c
n
i

e
v
i
s
n
e
h
e
r
p
m
o
c

r
e
h
t
O

e
m
o
c
n
i

t
e
N

d
e
u
s
s
i

s
t
i
n
u

k
c
o
t
s
d
e
t
c
i
r
t
s
e
R

d
e
s
i
c
r
e
x
e

s
n
o
i
t
p
o

k
c
o
t
S

6
1
0
2

,
1
3

h
c
r
a

,
e
c
n
a
l
a
B

s
d
r
a
w
a
d
e
s
a
b
-
k
c
o
t
s
m
o
r
f

t
i
f
e
n
e
b

x
a
t

s
s
e
c
x
E

e
s
n
e
p
x
e

n
o
i
t
a
s
n
e
p
m
o
c

k
c
o
t
S

s
s
o
l

e
v
i
s
n
e
h
e
r
p
m
o
c

r
e
h
t
O

7
1
0
2

,
1
3

h
c
r
a

,
e
c
n
a
l
a
B

e
m
o
c
n
i

t
e
N

)
3
0
1
,
0
2
(

4
0
1
,
9
9
1

)
2
(

)
4
0
1
,
9
9
1
(

k
c
o
t
s

d
e
t
c
i
r
t
s
e
r

n
o
s
e
x
a
t

g
n
i
d
l
o
h
h
t
i

w
y
a
p
o
t

k
c
o
t
s

n
o
m
m
o
c

f
o
n
r
u
t
e
R

ABIOMED, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows
(in thousands)

Operating activities:
Net income
Adjustments required to reconcile net income to net cash provided by

2017

Fiscal Years Ended March 31,
2016

2015

52,116

38,147

113,688

operating activities:

Depreciation and amortization
Bad debt expense
Stock-based compensation
Write-down of inventory
Excess tax benefit from stock-based awards
Deferred tax provision (benefit)
Change in fair value of contingent consideration

Changes in assets and liabilities:

Accounts receivable
Inventories
Prepaid expenses and other assets
Accounts payable
Accrued expenses and other liabilities
Deferred revenue

Net cash provided by operating activities

Investing activities:

Purchases of marketable securities
Proceeds from the sale and maturity of marketable securities
Acquisition of ECP and AIS, net of cash assumed
Purchase of other investment
Purchases of property and equipment

Net cash used for investing activities

Financing activities:

Proceeds from the exercise of stock options
Excess tax benefit from stock-based awards
Taxes paid related to net share settlement upon vesting of stock awards
Proceeds from the issuance of stock under employee stock purchase plan
Principal payments on capital lease obligation

Net cash provided by financing activities

Effect of exchange rate changes on cash
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Supplemental disclosure of cash flow information:

Cash paid for income taxes
Cash paid for interest on capital lease obligation

Supplemental disclosure of non-cash investing and financing activities:

Property and equipment under capital lease obligation
Property and equipment in accounts payable and accrued expenses

6,202
159
32,866
3,085
(12,038)
25,803
1,590

(11,550)
(12,284)
(2,366)
7,565
22,223
1,745
115,116

(278,501)
205,482
—
(2,899)
(50,415)
(126,333)

10,660
12,038
(20,105)
1,720
(446)
3,867
(1,841)
(9,191)
48,231
39,040

1,405
354

16,784
5,692

3,277
42
29,053
2,094
(3,567)
22,296
1,053

(10,930)
(11,473)
(2,290)
(2,645)
10,020
1,718
76,795

(260,975)
219,639
—
(750)
(15,624)
(57,710)

9,771
3,567
(7,313)
1,135
—
7,160
(415)
25,830
22,401
48,231

848
—

—
1,797

2,770
(5)
16,520
2,231
(606)
(87,094)
510

(7,970)
(6,967)
(1,479)
3,372
6,011
2,309
43,290

(97,658)
71,530
(15,697)
(2,850)
(5,188)
(49,863)

10,927
606
(2,805)
795
—
9,523
(1,465)
1,485
20,916
22,401

1,215
—

—
193

The accompanying notes are an integral part of the consolidated financial statements.

F-7

ABIOMED, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

Note 1. Nature of Operations

Abiomed, Inc. (the “Company” or “Abiomed”) is a provider of mechanical circulatory support devices and offers a continuum
of care to heart failure patients. The Company develops, manufactures and markets proprietary products that are designed to enable
the heart to rest, heal and recover by improving blood flow and/or performing the pumping function of the heart. The Company’s
products are used in the cardiac catheterization lab, or cath lab, by interventional cardiologists and in the heart surgery suite by heart
surgeons for patients who are in need of hemodynamic support prophylactically or emergently before, during or after angioplasty or
heart surgery procedures.

Note 2. Summary of Significant Accounting Policies

The accompanying consolidated financial statements reflect the application of significant accounting policies described below.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles of the United States of
America, or GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses
during the reporting period. The Company bases its estimates on historical experience and various other factors believed to be
reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources. On an ongoing basis, the Company evaluates its estimates, including those
related to revenue recognition, collectability of receivables, realizability of inventory, property and equipment, goodwill, intangible
and other long-lived assets, accrued expenses, stock-based compensation, income taxes including deferred tax assets and liabilities,
contingencies and litigation. Provisions for depreciation are based on their estimated useful lives using the straight-line method. Some
of these estimates can be subjective and complex and, consequently, actual results may differ from these estimates under different
assumptions or conditions.

Cash Equivalents and Marketable Securities

The Company classifies any marketable security with a maturity date of 90 days or less at the time of purchase as a cash

equivalent. Cash equivalents are carried on the balance sheet at fair market value.

The Company classifies any marketable security with a maturity date of greater than 90 days at the time of purchase as
marketable securities and classifies marketable securities with a maturity date of greater than one year from the balance sheet date as
long-term marketable securities. Marketable securities that the Company has the positive intent and ability to hold to maturity are
reported at amortized cost and classified as held-to-maturity marketable securities. If the Company does not have the intent and ability
to hold a marketable security to maturity, it reports the investment as available-for-sale marketable securities. The Company reports
available-for-sale marketable securities at fair value, and includes unrealized gains and, to the extent deemed temporary, unrealized
losses in stockholders’ equity. If any adjustment to fair value reflects a decline in the value of the investment, the Company considers
available evidence to evaluate whether the decline is “other than temporary” and, if so, marks the marketable security to market
through a charge to unrealized loss on short-term marketable securities in the consolidated statements of operations.

Major Customers and Concentrations of Credit Risk

The Company primarily sells its products to hospitals and distributors. No customer accounted for more than 10% of total

product revenues in fiscal years ended March 31, 2017, 2016 or 2015. No individual customer had an accounts receivable balance
greater than 10% of total accounts receivable at March 31, 2017 and 2016.

F-8

Credit is extended based on an evaluation of a customer’s historical financial condition and generally collateral is not required.

To date, credit losses have not been significant and the Company maintains an allowance for doubtful accounts based on its
assessment of the collectability of accounts receivable. Accounts receivables are geographically dispersed, primarily throughout the
U.S., as well as in Europe and other foreign countries where formal distributor agreements exist in certain countries.

Financial instruments which potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents,

marketable securities, short and long-term marketable securities and accounts receivable. Management mitigates credit risk by limiting
the investment type and maturity to securities that preserve capital, maintain liquidity and have a high credit quality.

Financial Instruments

The Company’s financial instruments are comprised of cash and cash equivalents, accounts receivable, accounts payable and
accrued expenses, the carrying amounts of which approximate fair market value as they are highly liquid and primarily short term in
nature.

Inventories

Inventories are stated at the lower of cost or market. Cost is based on the first in, first out method. The Company regularly

reviews inventory quantities on hand and writes down to its net realizable value any inventory that it believes to be impaired.
Management considers forecast demand in relation to the inventory on hand, competitiveness of product offerings, market conditions
and product life cycles when determining excess and obsolescence and net realizable value adjustments. Once inventory is written
down and a new cost basis is established, it is not written back up if demand increases.

Property and Equipment

Property and equipment is recorded at cost less accumulated depreciation. Land is carried at cost. Depreciation is computed
using the straight line method based on estimated useful lives of three to five years for machinery and equipment, computer software,
and furniture and fixtures. Building and building improvements are depreciated using the straight-line method over estimated useful
lives of seven to thirty-three years. Leasehold improvements are amortized using the straight-line method over the shorter of the lease
term or the estimated useful lives of the related assets. Expenditures for maintenance and repairs are expensed as incurred. Upon
retirement or other disposition of assets, the costs and related accumulated depreciation are eliminated from the accounts and the
resulting gain or loss is reflected in operating expenses.

Property and equipment is reviewed for impairment losses whenever events or changes in circumstances indicate the carrying

amount may not be recoverable. An impairment loss would be recognized based on the amount by which the carrying value of the
asset or asset group exceeds its fair value. Fair value is determined primarily using the estimated future cash flows associated with the
asset or asset group under review discounted at a rate commensurate with the risk involved and other valuation techniques.

Leases

Lease agreements are evaluated to determine whether they are capital or operating leases in accordance with Financial
Accounting Standards Board (“ASC”) 840, Leases. When any one of the four test criteria in ASC 840 is met, the lease then qualifies
as a capital lease. Capital leases are capitalized at the lower of the net present value of the total amount payable under the leasing
agreement (excluding finance charges) or the fair market value of the leased asset. Capital lease assets are depreciated on a straight-
line basis, over a period consistent with the Company’s normal depreciation policy for tangible fixed assets. Interest charges are
expensed over the period of the term of the capital lease obligation in relation to the carrying value of the capital lease.

Rent expense for operating leases, which may include free rent or fixed escalation amounts in addition to minimum lease

payments, is recognized on a straight-line basis over the duration of each lease term.

Goodwill

Goodwill is recorded when consideration for an acquisition exceeds the fair value of the net tangible and intangible assets
acquired. Goodwill is not amortized, instead the Company evaluates goodwill for impairment at least annually at October 31, as well
as whenever events or changes in circumstances suggest that the carrying amount may not be recoverable.

Goodwill impairment assessments are performed at the reporting unit level. The goodwill test involves a two-step process. The

first step is a comparison of the reporting unit’s fair value to its carrying value. If the reporting unit’s fair value exceeds its carrying

F-9

value, no further procedures are required. However, if the reporting unit’s fair value is less than the carrying value, an impairment of
goodwill may exist, requiring a second step to measure the amount of impairment loss. If the implied fair value of goodwill is less
than the recorded goodwill, an impairment charge is recorded for the difference.

In applying the goodwill impairment test, the Company may assess qualitative factors to determine whether it is more likely

than not that the fair value of the reporting unit is less than its carrying value. Qualitative factors may include, but are not limited to,
macroeconomic conditions, industry conditions, the competitive environment, changes in the market for our products and services,
regulatory and political developments, cost factors, and entity specific factors such as strategies and overall financial performance. If,
after assessing these qualitative factors, the Company determines it is not more likely than not that the fair value of a reporting unit is
less than its carrying value, then performing the two-step impairment test is unnecessary.

The goodwill impairment test is performed at the reporting unit level by comparing the reporting unit’s carrying value, including

goodwill, to the fair value of the reporting unit. The Company estimates the fair value of its single reporting unit using a combination
of the income approach and the market approach. The income approach incorporates the use of a discounted cash flow method in
which the estimated future cash flows and terminal values for the reporting unit is discounted to a present value using an appropriate
discount rate. Cash flow projections are based on management’s estimates of economic and market conditions which drive key
assumptions of revenue growth rates, operating margins, cash flows, capital expenditures and working capital requirements. The
discount rate is based on the specific risk characteristics of the reporting unit and its underlying forecast. The market approach
estimates fair value by comparing publicly traded companies with similar operating and investment characteristics as the reporting
unit. The fair values determined by the market approach and income approach, are weighted to determine the fair value for the
reporting unit based primarily on the similarity of the operating and investment characteristics of the reporting unit to the comparable
publicly traded companies used in the market approach.

In-Process Research and Development

In-process research and development, or IPR&D, assets are considered to be indefinite-lived until the completion or

abandonment of the associated research and development projects. IPR&D assets represent the fair value assigned to technologies that
are acquired, which at the time of acquisition have not reached technological feasibility and have no alternative future use. During the
period that the IPR&D assets are considered indefinite-lived, they are tested for impairment on an annual basis on October 31, or more
frequently if the Company becomes aware of any events occurring or changes in circumstances that indicate that the fair value of the
IPR&D assets are less than their carrying values. If and when development is complete, which generally occurs upon regulatory
approval and the Company is able to commercialize products associated with the IPR&D assets, these assets are then deemed definite-
lived and are amortized based on their estimated useful lives at that point in time. If development is terminated or abandoned, the
Company may have a full or partial impairment charge related to the IPR&D assets, calculated as the excess of carrying value of the
IPR&D assets over fair value.

Contingent Consideration

Contingent consideration represents potential milestones that the Company could pay additional consideration for associated

with an acquisition and is recorded as a liability and is measured at fair value using a combination of 1) an income approach, based on
various revenue and cost assumptions and applying a probability to each outcome and 2) a Monte-Carlo valuation model that
simulates outcomes based on management estimates. For the clinical and regulatory milestone, probabilities were applied to each
potential scenario and the resulting values were discounted using a rate that considers the weighted average cost of capital, the related
projections, and the overall business. The revenue-based milestone is valued using a Monte-Carlo valuation model, which simulates
estimated future revenues during the earn out-period using management's best estimates. During the quarter ended December 31,
2016, the Company revised the valuation method used to value the revenue-based milestone from a probability-weighted income
approach to a Monte-Carlo valuation method as it believes that this method provides a more refined estimate of the contingent
consideration related to this milestone based on the facts and circumstances at this time. The revision did not have a material impact
on the Company’s consolidated financial statements for any period. Significant increases or decreases in any of the probabilities of
success or changes in expected timelines for achievement of any of these milestones could result in a significantly higher or lower fair
value of the contingent consideration liability. The fair value of the contingent consideration at each reporting date is updated by
reflecting the changes in fair value reflected within research and development expenses in the Company’s consolidated statement of
operations.

Accrued Expenses

As part of the process of preparing its financial statements, the Company is required to estimate accrued expenses. This process

includes identifying services that third parties have performed and estimating the level of service performed and the associated cost
incurred on these services as of each balance sheet date in its financial statements. Examples of estimated accrued expenses include

F-10

contract service fees, such as amounts due to clinical research organizations, investigators in conjunction with clinical trials,
professional service fees, such as attorneys and accountants, and third party expenses relating to marketing efforts associated with
commercialization of the Company’s product and product candidates. Accrued expenses also include estimates for payroll costs, such
as bonuses and commissions. In the event that the Company does not identify certain costs that have been incurred or it under or over-
estimates the level of services or the costs of such services, reported expenses for a reporting period could be overstated
or understated. The dates in which certain services commence and end, the level of services performed on or before a given date and
the cost of services is often subject to the Company’s judgment. The Company makes these judgments and estimates based upon
known facts and circumstances.

Revenue Recognition

The Company recognizes revenue when evidence of an arrangement exists, title has passed or services have been rendered, the

selling price is fixed or determinable and collectability is reasonably assured.

Revenue from product sales to customers is recognized when delivery has occurred. All costs related to product sales are
recognized at time of delivery. The Company does not provide for rights of return to customers on product sales and therefore does
not record a provision for returns.

Maintenance and service support contract revenues are included in product revenue and are recognized ratably over the term of
the service contracts. Revenue is recognized as earned in limited instances where the Company rents its console medical devices on a
month-to-month basis or for a longer specified period of time to customers.

Government-sponsored research and development contracts and grants generally provide for payment on a cost-plus-fixed-fee

basis. Revenues from these contracts and grants are recognized as work is performed, provided the government has appropriated
sufficient funds for the work. Under contracts in which the Company elects to spend significantly more on the development project
during the term of the contract than the total contract amount, the Company prospectively recognizes revenue on such contracts
ratably over the term of the contract as related research and development costs are incurred.

Product Warranty

The Company generally provides a one-year warranty for certain products sold in which estimated contractual warranty
obligations are recorded as an expense at the time of shipment. The Company’s products are subject to regulatory and quality
standards. Future warranty costs are estimated based on historical product performance rates and related costs to repair given products.
The accounting estimate related to product warranty expense involves judgment in determining future estimated warranty costs.
Should actual performance rates or repair costs differ from estimates, revisions to the estimated warranty liability would be required.

Accumulated Other Comprehensive Income (Loss)

Comprehensive income (loss) is comprised of net income, plus all changes in equity of a business enterprise during a period

from transactions and other events and circumstances from non-owner sources, including any foreign currency translation
adjustments. These changes in equity are recorded as adjustments to accumulated other comprehensive income (loss) in the
Company’s consolidated balance sheet. The components of accumulated other comprehensive income (loss) consist primarily of
foreign currency translation adjustments. There were no reclassifications out of accumulated other comprehensive income (loss)
during the fiscal years ended March 31, 2017, 2016 and 2015.

Translation of Foreign Currencies

The functional currency of the Company’s foreign subsidiaries is their local currency. The assets and liabilities of the
Company’s foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and
expense items are translated at the average exchange rates prevailing during the period. The cumulative translation effect for
subsidiaries using a functional currency other than the U.S. dollar is included in accumulated other comprehensive income or loss as a
separate component of stockholders’ equity.

The Company’s intercompany accounts are denominated in the functional currency of the foreign subsidiary. Gains and losses

resulting from the remeasurement of intercompany receivables that the Company considers to be of a long-term investment nature are
recorded in accumulated other comprehensive income or loss as a separate component of stockholders’ equity, while gains and losses
resulting from the remeasurement of intercompany receivables from those foreign subsidiaries for which the Company anticipates
settlement in the foreseeable future are recorded in the consolidated statement of operations. The net foreign currency translation gains

F-11

and losses recorded in the consolidated statements of operations for the fiscal years ended March 31, 2017, 2016 and 2015 were not
significant.

Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding

during the fiscal year. Diluted net income per share is computed using the treasury stock method by dividing net income by the
weighted average number of dilutive common shares outstanding during the fiscal year. Diluted shares outstanding is calculated by
adding to the weighted average shares outstanding any potential dilutive securities outstanding for the fiscal year. Potential dilutive
securities include stock options, restricted stock awards, restricted stock units, performance-based stock awards and shares to be
purchased under the employee stock purchase plan. In fiscal years when a net loss is reported, all common stock equivalents are
excluded from the calculation because they would have an anti-dilutive effect, meaning the loss per share would be reduced.
Therefore, in periods when a loss is reported basic and dilutive loss per share are the same.

Basic Net Income Per Share

Net income

Fiscal Years Ended March 31,
2016

2015

2017

52,116

38,147

113,688

Weighted average shares used in computing basic net

income per share

43,238

42,204

40,632

Net income per share - basic

1.21

0.90

2.80

Diluted Net Income Per Share

Net income

Fiscal Years Ended March 31,
2016

2015

2017

52,116

38,147

113,688

Weighted average shares used in computing basic net

income per share

Effect of dilutive securities
Weighted average shares used in computing diluted

net income per share

43,238
1,420

42,204
2,691

40,632
2,226

44,658

44,895

42,858

Net income per share - diluted

1.17

0.85

2.65

For the fiscal years ended March 31, 2017, 2016 and 2015, approximately 24,000, 62,000 and 2,000 shares of common stock

underlying outstanding securities primarily related to out-of-the-money stock options and performance-based awards where
milestones were not met were not included in the computation of diluted earnings per share because their inclusion would be anti-
dilutive.

Stock-Based Compensation

The Company’s stock-based compensation cost is measured at the grant date based on the fair value of the award and is

recognized as an expense over the requisite service period, and includes an estimate of awards that will be forfeited.

The fair value of stock option grants is estimated using the Black-Scholes option pricing model. Use of the valuation model
requires management to make certain assumptions with respect to selected model inputs. The risk-free interest rate is based on the
U.S. Treasury yield curve in effect at the time of grant for a term consistent with the expected life of the stock options. Volatility
assumptions are calculated based on historical volatility of the Company’s stock. The Company estimates the expected term of options
based on historical exercise experience and estimates of future exercises of unexercised options. In addition, an expected dividend
yield of zero is used in the option valuation model because the Company does not pay cash dividends and does not expect to pay any
cash dividends in the foreseeable future. Forfeitures are estimated based on an analysis of actual forfeitures, adjusted to the extent
historical forfeitures may not be indicative of expected forfeitures in the future.

F-12

For awards with service conditions only, the Company recognizes stock-based compensation expense on a straight-line basis

over the requisite service period. For awards with service and performance conditions, the Company recognizes stock-based
compensation expense using the graded vesting method over the requisite service period. Estimates of stock-based compensation
expense for an award with performance conditions are based on the probable outcome of the performance conditions. The cumulative
effect of changes in the probability outcomes are recorded in the period in which the changes occur. For awards with market-based
conditions, the Company uses a Monte Carlo simulation model to estimate that the grant-date fair value. The fair value related to
market-based awards is recorded as stock-based compensation expense over the vesting period regardless of whether the market
condition is achieved or not.

Income Taxes

The Company’s provision for income taxes is comprised of a current and a deferred provision. The current income tax provision

is calculated as the estimated taxes payable or refundable on income tax returns for the current fiscal year. The deferred income tax
provision is calculated for the estimated future income tax effects attributable to temporary differences and carryforwards using
expected tax rates in effect in the years during which the differences are expected to reverse.

The Company regularly assesses its ability to realize its deferred tax assets. Assessing the realization of deferred tax assets
requires significant management judgment. Valuation allowances are established when necessary to reduce net deferred tax assets to
the amount that is more likely than not to be realized.

The Company recognizes and measures uncertain tax positions using a two-step approach. The first step is to evaluate the tax
position for recognition by determining if, based on the technical merits, it is more likely than not that the position will be sustained
upon audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit at the
largest amount that is more likely than not of being realized upon ultimate settlement. The Company reevaluates these uncertain tax
positions on an ongoing basis, when applicable. This evaluation is based on factors including, but not limited to, changes in facts or
circumstances, new information and technical insights, and changes in tax laws. Any changes in these factors could result in the
recognition of a tax benefit or an additional charge to the tax provision. When applicable, the Company accrues for the effects of
uncertain tax positions and the related potential penalties and interest through income tax expense.

Recent Accounting Pronouncements

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee

Share-Based Payment Accounting, which is intended to simplify several aspects of the accounting for share-based payment
transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as
classification in the statement of cash flows. The Company is currently evaluating the impact of adopting ASU 2016-09 on its
consolidated financial statements and disclosures. The Company believes that the adoption of ASU 2016-09 will have a significant
impact on the Company’s consolidated financial statements, most notably, the requirement to recognize certain tax benefits or
shortfalls upon a restricted stock unit vesting or stock option exercises in the income tax provision in the consolidated statement of
operations. In addition, upon adoption in the first quarter of fiscal 2018, the Company expects to record a cumulative-effect
adjustment, on a modified-retrospective basis, within retained earnings for excess tax benefits not previously recognized as net
deferred tax assets. ASU 2016-09 will also impact the calculation of diluted shares outstanding under the treasury method which will
no longer assume that tax benefits related to share-based payments are used to repurchase common stock and will impact the
consolidated statements of cash flows since tax benefits related to share-based payments at settlement will be classified as operating
cash flows instead of financing cash flows. Additionally, under the ASU 2016-09, an election can be made to reduce share-based
compensation expense for forfeitures as they occur instead of estimating forfeitures that are expected to occur. In addition to the
aforementioned items, the Company anticipates that ASU 2016-09 will introduce more volatility to its effective income tax rate, net
income and earnings per share due to the effect of tax benefits or shortfalls related to restricted stock unit vestings or stock option
exercises. The Company will adopt ASU 2016-09 during the first quarter of fiscal 2018.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers to provide updated guidance on revenue

recognition. This new standard will replace most of the existing revenue recognition guidance in U.S. GAAP when it becomes
effective and permits the use of either the retrospective or cumulative effect transition method. ASU 2014-09 requires a company to
recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the
company expects to be entitled in exchange for those goods or services. In doing so, companies may need to use more judgment and

F-13

make more estimates than under today’s guidance. These may include identifying performance obligations in the contract, estimating
the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate
performance obligation. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of
revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about
customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a
contract. The Company is assessing all of the potential impacts of the revenue recognition guidance. Although the Company has not
yet completed its assessment of the new revenue recognition guidance, the Company believes that the new revenue recognition
guidance generally supports the recognition of revenue at a point-in-time for product sales and over an extended period of time for
preventative maintenance service agreements, which is consistent with its current revenue recognition model. The Company does
anticipate that the new revenue standard will result in expanded financial statement disclosures relating to the nature, amount, timing,
and uncertainty of revenue and cash flows arising from contracts with customers. As the Company completes its evaluation of this
new standard, new information may arise that could change the Company’s current understanding of the impact to revenue and
expense recognized and financial statement disclosures. Additionally, the Company will continue to monitor industry activities and
any additional guidance provided by regulators, standards setters, or the accounting profession and adjust the Company’s assessment
and implementation plans accordingly. ASU 2014-09 will become effective for the Company beginning in fiscal 2019.

In February 2016, the FASB issued ASU 2016-02, Leases. This guidance requires an entity to recognize lease liabilities and a

right-of-use asset for all leases on the balance sheet and to disclose key information about the entity's leasing arrangements. ASU
2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting
period, with earlier adoption permitted. ASU 2016-02 must be adopted using a modified retrospective approach for all leases existing
at, or entered into after the date of initial adoption, with an option to elect to use certain transition relief. The Company is currently in
the process of evaluating its lessee arrangements to determine the impact of ASU 2016-02 amendment on its consolidated financial
statements. This evaluation includes a review of the Company’s existing leasing arrangements on its facilities. ASU 2016-02 will
become effective for the Company beginning in fiscal 2020.

Note 3. Marketable Securities and Fair Value Measurements

Marketable Securities

The Company’s marketable securities are classified as available-for-sale securities and, accordingly, are recorded at fair value.

The difference between amortized cost and fair value is reported as a component of other comprehensive income (loss).

The Company’s marketable securities at March 31, 2017 and 2016 are classified on the balance sheet as follows:

Short-term marketable securities (within one year to maturity)
Long-term marketable securities (one to two years to maturity)

March 31, 2017

March 31, 2016

(in $000's)

190,908
47,143
238,051

163,822
1,000
164,822

The Company’s marketable securities at March 31, 2017 and 2016 are invested in the following:

March 31, 2017:

Short-term U.S. Treasury mutual fund securities
Short-term government-backed securities
Short-term corporate debt securities
Long-term U.S. Treasury mutual fund securities
Long-term government-backed securities
Long-term corporate debt securities

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

(in $000's)

Fair Market
Value

45,199 $
90,199
55,465
1,998
43,484
1,853
$ 238,198 $

— $
1
—
—
5
—
6 $

(13) $
(87)
(31)
(3)
(18)
(1)

45,186
90,113
55,434
1,995
43,471
1,852
(153) $ 238,051

F-14

March 31, 2016:

U.S. Treasury mutual fund securities
Short-term government-backed securities
Long-term government-backed securities

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

(in $000's)

Fair Market
Value

45,635 $
118,125
999

$ 164,759 $

21 $
45
1
67 $

45,656
— $
118,166
(4)
—
1,000
(4) $ 164,822

Fair Value Hierarchy

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date. Financial assets and liabilities carried at fair value are to be classified and
disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded

instruments and listed equities.

Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models are

primarily industry-standard models that consider various assumptions, including time value, yield curve, volatility factors, prepayment
speeds, default rates, loss severity, current market and contractual prices for the underlying financial instruments, as well as other
relevant economic measures. Substantially all of these assumptions are observable in the marketplace, can be derived from observable
data or are supported by observable levels at which transactions are executed in the marketplace.

Level 3 is comprised of unobservable inputs that are supported by little or no market activity. Financial assets are considered

Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one
significant model assumption or input is unobservable.

The following table presents the Company’s fair value hierarchy for its financial instruments measured at fair value as of

March 31, 2017 and 2016:

March 31, 2017:
Assets

Liabilities

Contingent consideration

March 31, 2016:
Assets

U.S. Treasury mutual fund securities
Short-term government-backed securities
Long-term government-backed securities

Liabilities

Contingent consideration

F-15

Level 1

Level 2

Level 3

Total

(in $000's)

— $
—
—
—
—
—

45,186 $
90,113
55,434
1,995
43,471
1,852

— $
—
—
—
—
—

45,186
90,113
55,434
1,995
43,471
1,852

—

9,153

Level 1

Level 2

Level 3

Total

(in $000's)

— $
—
—

45,656 $
118,166
1,000

— $
—
—

45,656
118,166
1,000

—

7,563

The Company has determined that the estimated fair value of its investments in U.S. Treasury mutual fund securities,
government-backed securities, and corporate debt securities are reported as Level 2 financial assets as they are not exchange-traded
instruments.

The Company’s financial liabilities consisted of contingent consideration potentially payable related to the acquisition of ECP
Entwicklungsgesellschaft mbH (“ECP”) and AIS GmbH Aachen Innovative Solutions (“AIS”), in July 2014. The Company acquired
ECP for $13.0 million in cash, with additional potential payouts totaling $15.0 million based on the achievement of certain clinical
and regulatory and revenue-based milestones. These potential milestone payments may be made, at the Company’s option, by a
combination of cash or Abiomed common stock. As of March 31, 2017, the Company used a combination of an income approach,
based on various revenue and cost assumptions and applying a probability to each outcome and a Monte-Carlo valuation model. For
the clinical and regulatory milestone, probabilities were applied to each potential scenario and the resulting values were discounted
using a rate that considers weighted average cost of capital as well as a specific risk premium associated with the riskiness of the earn
out itself, the related projections, and the overall business. The revenue-based milestone is valued using a Monte-Carlo valuation
model, which simulates estimated future revenues during the earn out-period using management's best estimates. Projected revenues
are based on our most recent internal operational budgets and long-range strategic plans.

This liability is reported as Level 3 as the estimated fair value of the contingent consideration related to the acquisition of the

ECP requires significant management judgment or estimation and is calculated using the following valuation methods:

Clinical and regulatory
milestone

Fair Value at
March 31, 2017
(in $000's)

5,395

Valuation Methodology
Probability
weighted income
approach

Revenue-based milestone

3,758 Monte Carlo simulation

model

Weighted Average
(range, if
applicable)
2019 to 2022

2.6% to 3.3%
Probability adjusted level of 40% for
the base case scenario and 5% to
20% for various upside and downside
scenarios
2023 to 2035

18%
50%

Significant
Unobservable Input
Projected fiscal year
of milestone
payments
Discount rate
Probability of
occurrence

Projected fiscal year
of milestone
payments
Discount rate
Expected volatility
for forecasted
revenues

9,153

The following table summarizes the change in fair value, as determined by Level 3 inputs, of the contingent consideration for

the fiscal years ended March 31, 2017, 2016 and 2015:

Level 3 liabilities, beginning balance
Additions
Payments
Change in fair value
Level 3 liabilities, ending balance

Fiscal Years Ended March 31,

2017

2016

2015

(in $000's)

7,563
—
—
1,590
9,153

6,510
—
—
1,053
7,563

—
6,000
—
510
6,510

The changes in fair value of the contingent consideration were primarily due to the passage of time on the fair value

measurement of milestones related to the ECP acquisition. Adjustments associated with the change in fair value of contingent
consideration are included in research and development expenses in the Company’s condensed consolidated statements of operations.
Significant increases or decreases in any of the probabilities of success or changes in expected timelines for achievement of any of
these milestones could result in a significantly higher or lower fair value of the liability. The fair value of the contingent consideration

F-16

at each reporting date is updated by reflecting the changes in fair value reflected in the Company’s statement of operations. There is
no assurance that any of the conditions for the milestone payments will be met.

Other Investments

The Company periodically makes investments in private medical device companies that focus on heart failure and heart pump
technologies. The aggregate carrying amount of the Company’s portfolio of other investments was $7.2 million and $4.4 million at
March 31, 2017 and 2016, respectively, and is classified within other assets in the consolidated balance sheets. Each of these
individual investments are accounted for using the cost method and are measured at fair value only if there are identified events or
changes in circumstances that may have a significant adverse effect on the fair value of these investments.

Note 4. Accounts Receivable

The components of accounts receivable are as follows:

Trade receivables
Allowance for doubtful accounts

March 31, 2017

March 31, 2016

(in $000's)

54,337
(282)
54,055

42,945
(124)
42,821

The following table summarizes activity in the Company's allowance for doubtful accounts:

Balance at beginning of year
Additions
Write-offs
Balance at end of year

Note 5. Inventories

The components of inventories are as follows:

Raw materials and supplies
Work-in-progress
Finished goods

Fiscal Years Ended March 31,

2017

2016

(in $000's)

2015

124
159
(1)
282

177
42
(95)
124

185
115
(123)
177

March 31, 2017 March 31, 2016
(in $000's)

9,784 $
16,504
8,643
34,931 $

7,993
13,147
5,600
26,740

The Company’s inventories relate to its circulatory care product lines, primarily the Impella® product platform. Finished goods

and work-in-process inventories consist of direct material, labor and overhead.

F-17

Note 6. Property and Equipment

The components of property and equipment are as follows:

Land
Building and building improvements
Capital lease asset
Leasehold improvements
Machinery and equipment
Furniture and fixtures
Construction in progress
Total cost
Less accumulated depreciation

March 31, 2017

March 31, 2016

(in $000's)

4,046
10,900
16,784
34,854
27,989
3,899
9,257
107,729
(19,952)
87,777

-
-
-
11,833
25,211
1,510
3,712
42,266
(19,082)
23,184

In August 2016, the Company entered into an amended lease agreement for its existing corporate headquarters in Danvers,

Massachusetts (see Note 11). The Company recorded $16.8 million for this lease as a capital lease asset with depreciation expense
being recorded on a straight line basis over 15 years.

In December 2016, the Company entered into a purchase and sale agreement to acquire its existing European headquarters in

Aachen, Germany, consisting of 33,000 square feet of space. Pursuant to the purchase and sale agreement, the Company acquired the
property in February 2017. The acquisition cost for the land and building was approximately $12.6 million, with $4.0 million being
recorded to land and $8.6 million being recorded to the building and building improvements.

Depreciation expense related to property and equipment was $6.2 million, $3.3 million, and $2.7 million for the fiscal years

ending March 31, 2017, 2016 and 2015, respectively.

Note 7. Goodwill and In-Process Research and Development

The carrying amount of goodwill at March 31, 2017 and 2016 was $31.0 million and $33.0 million, respectively, and has been
recorded in connection with the Company’s acquisition of Impella Cardiosystems AG, or Impella, in May 2005 and ECP and AIS in
July 2014. The goodwill activity is as follows:

Balance at March 31, 2015
Foreign currency translation impact
Balance at March 31, 2016
Foreign currency translation impact
Balance at March 31, 2017

(in $000's)

31,534
1,469
33,003
(1,958)
31,045

The Company has no accumulated impairment losses on goodwill. The Company performed a qualitative assessment during the
annual impairment review for fiscal 2017 as of October 31, 2016 and concluded that it is not more likely than not that the fair value of
the Company’s single reporting unit is less than its carrying amount. Therefore, the two-step goodwill impairment test for the
reporting unit was not necessary in fiscal 2017.

In July 2014, the Company acquired ECP and AIS and recorded $18.5 million of IPR&D assets. The estimated fair value of the
IPR&D assets was determined using a probability-weighted income approach, which discounts expected future cash flows to present
value. The projected cash flows from the expandable catheter pump technology were based on certain key assumptions, including
estimates of future revenue and expenses, taking into account the stage of development of the technology at the acquisition date and
the time and resources needed to complete development. The Company used a discount rate of 21.5% and cash flows that have been
probability adjusted to reflect the risks of product commercialization, which the Company believes are appropriate and representative
of market participant assumptions.

F-18

The carrying value of the Company’s IPR&D assets and the change in the balance for the fiscal years ended March 31, 2017 and

2016 is as follows:

Balance at March 31, 2015
Foreign currency translation impact
Balance at March 31, 2016
Foreign currency translation impact
Balance at March 31, 2017

(in $000's)

14,711
685
15,396
(914)
14,482

The Company tests IPR&D assets for impairment at least annually, or more frequently if impairment indicators exist, by first

assessing qualitative factors to determine whether it is more likely than not that the fair value of the IPR&D assets is less than its
carrying amount. The Company performed its annual impairment review for fiscal 2017 as of October 31, 2016 and concluded that it
is not more likely than not that the fair value of the IPR&D assets is less than its carrying amount.

Note 8. Stockholders’ Equity

Class B Preferred Stock

The Company has authorized 1,000,000 shares of Class B Preferred Stock, $.01 par value, of which the Board of Directors can

set the designation, rights and privileges. No shares of Class B Preferred Stock have been issued or are outstanding.

Note 9. Stock Award Plans and Stock-Based Compensation

Stock Award Plans

The Company grants stock options and restricted stock awards to employees and others. All outstanding stock options of the
Company as of March 31, 2017 were granted with an exercise price equal to the fair market value on the date of grant. Outstanding
stock options, if not exercised, expire 10 years from the date of grant.

2015 Stock Incentive Plan

The Company’s 2015 Stock Incentive Plan (the “2015 Plan”) authorizes the grant of a variety of equity awards to the
Company’s officers, directors, employees, consultants and advisers, including awards of unrestricted and restricted stock, restricted
stock units, incentive and nonqualified stock options to purchase shares of common stock, performance share awards and stock
appreciation rights. The 2015 Plan provides that options may only be granted at the current market value on the date of grant. Each
share of stock issued pursuant to a stock option or stock appreciation right counts as one share against the maximum number of shares
issuable under the 2015 Plan, while each share of stock issued pursuant to any other type of award counts as 1.8 shares against the
maximum number of shares issuable under the 2015 Plan. The Company’s policy for issuing shares upon exercise of stock options or
the vesting of its restricted stock awards and restricted stock units is to issue shares of common stock at the time of exercise or
conversion. At March 31, 2017, a total of approximately 3,118,000 shares were available for future issuance under the 2015 Plan.

2008 Stock Incentive Plan

The Company’s 2008 Stock Incentive Plan (the “2008 Plan”) authorizes the grant of a variety of equity awards to the
Company’s officers, directors, employees, consultants and advisers, including awards of unrestricted and restricted stock, restricted
stock units, incentive and nonqualified stock options to purchase shares of common stock, performance share awards and stock
appreciation rights. The 2008 Plan provides that options may only be granted at the current market value on the date of grant. Each
share of stock issued pursuant to a stock option or stock appreciation right counts as one share against the maximum number of shares
issuable under the 2008 Plan, while each share of stock currently issued pursuant to any other type of award counts as 1.58 shares
against the maximum number of shares issuable under the 2008 Plan. The Company’s policy for issuing shares upon exercise of stock
options or the vesting of its restricted stock awards and restricted stock units is to issue shares of common stock at the time of exercise
or conversion. At March 31, 2017, a total of approximately 159,000 shares were available for future issuance under the 2008 Plan.

F-19

Stock-Based Compensation

The following table summarizes stock-based compensation expense by financial statement line item in the Company’s

consolidated statements of operations for the fiscal years ended March 31, 2017, 2016 and 2015:

Cost of product revenue
Research and development
Selling, general and administrative

2017

Fiscal Years Ended March 31,
2016
(in $000's)

2015

1,061
6,050
25,755
32,866

895
3,950
24,208
29,053

665
3,205
12,650
16,520

The components of stock-based compensation for the fiscal years ended March 31, 2017, 2016 and 2015 were as follows:

Restricted stock units
Stock options
Employee stock purchase plan

2017

Fiscal Years Ended March 31,
2016
(in $000's)

2015

26,570
5,829
467
32,866

23,708
4,866
479
29,053

13,539
2,708
273
16,520

Stock Options

The following table summarized stock option activity for the year ended March 31, 2017:

Outstanding at beginning of period
Granted
Exercised
Cancelled and expired
Outstanding at end of period
Exercisable at end of period
Options vested and expected to vest at end of period

Weighted
Average
Exercise

Price

20.55
106.10
14.12
73.50
32.09
18.26
31.06

Options
(in
thousands)
2,244
180
(755)
(23)
1,646
1,156
1,594

$
$
$

Weighted
Average
Remaining
Contractual
Term
(years)

5.19

Aggregate
Intrinsic
Value
(in
thousands)

5.46
4.36
5.37

$ 153,254
$ 123,592
$ 150,056

The remaining unrecognized stock-based compensation expense for unvested stock option awards at March 31, 2017 was
approximately $7.7 million, net of forfeitures, and the weighted-average period over which this cost will be recognized is 2.5 years.

The aggregate intrinsic value of options exercised for fiscal years 2017, 2016 and 2015 was $74.8 million, $58.6 million and

$20.0 million, respectively. The total cash received as a result of employee stock option exercises during the fiscal years ended
March 31, 2017, 2016 and 2015 was approximately $10.7 million, $9.8 million and $10.9 million, respectively. The total fair value of
options vested in fiscal years 2017, 2016 and 2015 was $4.0 million, $2.6 million and $2.6 million, respectively.

F-20

The Company estimates the fair value of each stock option granted at the grant date using the Black-Scholes option valuation

model. The weighted average grant-date fair values and weighted average assumptions used in the calculation of fair value of options
granted during the fiscal years ended March 31, 2017, 2016 and 2015 was as follows:

Valuation assumptions:
Weighted average grant-date fair value
Risk-free interest rate
Expected option life (years)
Expected volatility

Fiscal Years Ended March 31,
2016

2017

2015

42.40
1.41%
4.14
48.9%

29.57
1.55%
4.15
49.7%

9.29
1.60%
4.19
49.3%

The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for a term consistent with the

expected life of the stock options. Volatility assumptions are calculated based on the historical volatility of the Company’s stock. The
Company estimates the expected term of options based on historical exercise experience and estimates of future exercises of
unexercised options. An expected dividend yield of zero is used in the option valuation model because the Company does not pay cash
dividends and does not expect to pay any cash dividends in the foreseeable future. The Company estimates forfeitures based on an
analysis of actual historical forfeitures, adjusted to the extent historic forfeitures may not be indicative of expected forfeitures in the
future.

Restricted Stock Units

The following table summarizes restricted stock unit activity for the fiscal year ended March 31, 2017:

Restricted stock units at beginning of period
Granted
Vested
Forfeited
Restricted stock units at end of period

Number of
Shares
(in thousands)

Weighted
Average
Grant Date
Fair Value
(per share)

$
1,263
366
$
(502) $
(71) $
$

1,056

57.95
97.43
35.05
91.39
80.50

The remaining unrecognized compensation expense for outstanding restricted stock units, including performance-based awards,

as of March 31, 2017 was $27.4 million and the weighted-average period over which this cost will be recognized is 2.0 years.

The weighted average grant-date fair value for restricted stock units granted during the fiscal years ended March 31, 2017, 2016

and 2015 was $97.43, $87.45 and $22.07 per share, respectively. The total fair value of restricted stock units vested in fiscal years
2017, 2016 and 2015 was $51.3 million, $39.6 million and $11.2 million, respectively.

Performance and Market-Based Awards

Restricted stock units include certain awards that vest subject to certain performance and market-based criteria. The remaining
unrecognized compensation expense for outstanding performance and market-based restricted stock units as of March 31, 2017 was
$15.5 million and the weighted-average period over which this cost will be recognized is 2.1 years.

Performance-Based Awards

In May 2016, performance-based awards of restricted stock units for the potential issuance of up to 190,890 shares of common

stock were issued to certain executive officers and employees, all of which vest upon achievement of prescribed service milestones by
the award recipients and performance milestones by the Company. The Company met a portion of the prescribed performance
milestones in fiscal 2017 such that the remaining outstanding 132,000 shares of common stock as of March 31, 2017 will vest subject
to service requirements for vesting for these employees and stock-based compensation expense is being recognized accordingly over

F-21

the employee’s service term. As of March 31, 2017, the Company is recognizing compensation expense based on the probable
outcome related to the prescribed performance targets on the outstanding awards.

In May 2015, performance-based awards of restricted stock units for the potential issuance of 183,940 shares of common stock
were issued to certain executive officers and employees, all of which vest upon achievement of prescribed service milestones by the
award recipients and performance milestones by the Company. The Company met the prescribed performance milestones in fiscal
2016 such that the remaining outstanding 120,000 shares of common stock as of March 31, 2017 will vest subject to service
requirements for vesting for these employees and stock-based compensation expense is being recognized accordingly over the
employee’s service term.

In May 2014, performance-based awards of restricted stock units for the potential issuance of 379,752 shares of common stock
were issued to certain executive officers and employees, all of which vest upon achievement of prescribed service milestones by the
award recipients and performance milestones by the Company. The Company met the prescribed performance milestones in fiscal
2015. As of March 31, 2017, approximately 74,000 shares of common stock underlying restricted stock units remain unvested and
such restricted stock units will vest subject to service requirements for vesting for these employees.

In June 2011, performance-based awards of restricted stock units for the potential issuance of 100,000 shares of common stock
was issued to a certain senior executive officer of the Company that would vest upon achievement of prescribed service milestones by
the award recipient and performance milestones by the Company. As of March 31, 2017, the Company has met the prescribed
milestones for all 100,000 shares of this award and stock-based compensation expense has been fully recognized.

Market-Based Awards

In June 2015, the Company awarded certain executive officers a total of up to 322,980 market-based restricted share units, of
which 281,530 units remain outstanding. These restricted stock units will vest and result in the issuance of common stock based on
continuing employment and the relative ranking of the total shareholder return (“TSR”) of the Company’s common stock in relation to
the TSR of the component companies in the S&P Health Care Equipment Select Industry Index over a three-year performance period
based on a comparison of average closing stock prices between June 2015 and June 2018. The actual number of market-based
restricted stock units that may be earned can range from 0% to 300% of the target number of shares. One-half of the market-based
restricted stock units earned will vest in June 2018 and the remaining restricted stock units will vest one year thereafter provided the
executive officers are still employed with the Company.

In November 2016, the Company awarded an executive officer a total of up to 41,526 restricted stock units. The restricted
stock units are subject to both performance-and time-based vesting. These restricted stock units will vest and result in the issuance of
common stock based on continuing employment, the Company achieving positive net profits measured in the aggregate over the first
four full fiscal quarters following the grant date and the relative ranking of the TSR of the Company’s common stock in relation to the
TSR of the component companies in the S&P Health Care Equipment Select Industry Index over a three-year performance period
based on a comparison of average closing stock prices in June 2015 and June 2018. The actual number of restricted stock units that
may be earned ranges from 0% to 100% of the target number of shares. One-half of the restricted stock units will potentially vest in
June 2018 based on performance criteria described above and the remaining half of the restricted stock units will vest one year
thereafter.

The Company used a Monte Carlo simulation model to estimate the grant-date fair value of the restricted stock units granted in

June 2015 and November 2016. The fair value related to the restricted stock units is being recorded as stock compensation expense
over the period from date of grant to June 2019 regardless of the actual TSR outcome achieved.

The table below sets forth the assumptions used to value the market-based awards and the estimated grant-date fair value:

Risk-free interest rate
Dividend yield
Remaining performance period (years)
Expected volatility
Estimated grant date fair value (per share)
Target performance (number of shares)

June 2015
Awards

November 2016
Awards

1.10%
0%

1.21
47.2%

107.10
107,660

0.90%
0%

1.21
50.6%
62.55
41,526

F-22

Employee Stock Purchase Plan

The Company has an employee stock purchase plan, or ESPP. Under the ESPP, eligible employees, including officers and

directors, who have completed at least three months of employment with the Company or its subsidiaries who elect to participate in
the purchase plan instruct the Company to withhold a specified amount of the employee’s income each payroll period during a six-
month payment period (the periods April 1—September 30 and October 1—March 31). On the last business day of each six-month
payment period, the amount withheld is used to purchase shares of the Company’s common stock at an exercise price equal to 85% of
the lower of its market price on the first business day or the last business day of the payment period. The Company recognized
compensation expense of $0.5 million, $0.5 million and $0.3 million for the fiscal years ended March 31, 2017, 2016 and 2015,
respectively, related to the ESPP.

Note 10. Income Taxes

The components of the Company’s income tax provision (benefit) for the fiscal years ended March 31, 2017, 2016 and 2015 are

as follows:

Income before provision for income taxes:

United States
Foreign
Income before income taxes

Current tax expense:

Federal
State
Foreign

Deferred tax expense (benefit):

Federal
State
Foreign

Total income tax provision (benefit)

2017

2016

(in $000's)

2015

78,172
13,170
91,342

7,313
5,045
1,066
13,424

23,008
(349)
3,144
25,803
39,227

54,406
11,432
65,838

1,690
2,113
1,592
5,395

18,769
1,284
2,243
22,296
27,691

22,243
6,522
28,765

464
424
1,283
2,171

(66,140)
(13,430)
(7,524)
(87,094)
(84,923)

F-23

The components of the Company’s net deferred taxes were as follows:

Deferred tax assets

NOL carryforwards and tax credit carryforwards
Stock-based compensation
Nondeductible reserves and accruals
Amortizable intangibles other than goodwill
Capitalized research and development
Foreign NOL carryforwards
Deferred revenue
Depreciation
Other, net

Deferred tax liabilities

Indefinite lived intangibles
In-process research and development
Domestic deferred tax liability on foreign NOL
carryforwards

Net deferred tax assets
Valuation allowance
Net deferred tax assets

Reported as:

Long-term deferred tax assets, net
Long-term deferred tax liabilities

Net deferred tax assets

2017

March 31,

(in $000's)

2016

8,814
16,560
10,303
1,846
—
13,634
4,308
289
1,308
57,062

(9,444)
(4,374)

(6,836)
(20,654)

36,408
(2,468)
33,940

34,723
(783)
33,940

34,305
14,879
8,550
2,420
442
17,635
3,351
353
1,802
83,737

(8,480)
(4,649)

(10,488)
(23,617)

60,120
(2,418)
57,702

58,534
(832)
57,702

A reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate is as follows for the fiscal

years ended March 31, 2017, 2016, and 2015:

Statutory income tax rate

Increase (decrease) resulting from:
Change in valuation allowance
Credits
Foreign taxes
State taxes, net
Permanent differences
Stock based compensation
Rate differential on foreign operations
Other

Effective tax rate

2017

2016

2015

35.0 %

0.2
(3.3)
2.0
3.8
3.3
0.2
0.1
1.7
43.0 %

0.7
(4.1)
2.5
3.7
3.0
0.3
-
1.0
42.1 %

(342.8)
(1.9)
4.5
4.0
3.9
0.3
0.2
1.6
(295.2) %

The Company regularly assesses its ability to realize its deferred tax assets. Assessing the realization of deferred tax assets
requires significant management judgment. In determining whether its deferred tax assets are more likely than not realizable, the
Company evaluates all available positive and negative evidence, and weights the evidence based on its objectivity.

During the fiscal year ended March 31, 2015, the Company determined based on its consideration of the weight of positive and
negative evidence that there was sufficient positive evidence that most of its federal, state and certain foreign deferred tax assets were

F-24

more likely than not recoverable as of March 31, 2015. Accordingly, the Company recorded a $101.5 million reversal of the valuation
allowance in the year ended March 31, 2015.

As of March 31, 2017 and 2016, respectively, the Company maintained a valuation allowance of $2.5 million and $2.4 million

for deferred tax assets related to NOL carryforwards in certain foreign jurisdictions in which the Company has had limited or no
history of profitability. Based on the review of all available evidence, the Company recorded a valuation allowance to reduce these
deferred tax assets to the amount that is more likely than not to be realizable as of March 31, 2017 and 2016.

Changes in the valuation allowance for deferred tax assets during the fiscal years ended March 31, 2017, 2016 and 2015 were as

follows:

Valuation allowance as of beginning of year
Decreases recorded as benefit to income tax
provision
Increases due to foreign net operating loss in
certain foreign jurisdictions
Valuation allowance as of end of year

2017

2016

(in $000's)

2015

2,418 $

2,912 $

102,093

(1,171)

(101,468)

50
2,468 $

677
2,418 $

2,287
2,912

At March 31, 2017, the Company had federal net operating loss carryforwards, or NOLs, of approximately $167.3 million

which expire in varying years from fiscal 2019 through fiscal 2035. At March 31, 2017, the Company had foreign NOLs of
approximately $46.9 million, primarily in Germany, U.K., and France, which do not expire. In addition, at March 31, 2017, the
Company had federal and state research and development credit carryforwards of approximately $13.7 million and $7.8 million,
respectively, which expire in varying years from fiscal 2017 through fiscal 2036.

The entire amount of federal NOL of $167.3 million relates to stock-based compensation tax deductions in excess of stock-

based compensation expense for financial reporting purposes (“excess tax benefits”). Excess tax benefits are realized when they
reduce income taxes payable, as determined using a “with and without” method, and are currently credited to additional paid-in capital
rather than as a reduction of the income tax provision. During the year ended March 31, 2017, the Company realized excess tax
benefits from federal and state tax deductions of $12.0 million which were credited to additional paid-in capital.

As described in Note 2 above, the Company will adopt ASU 2016-09 during the first quarter of fiscal 2018. The Company

believes that the adoption of ASU 2016-09 will have a significant impact on the Company’s consolidated financial statements, most
notably, the requirement to recognize certain tax benefits or shortfalls upon a restricted stock unit vesting or stock option exercises in
the income tax provision in the consolidated statement of operations. Upon adoption in the first quarter of fiscal 2018, the Company
expects to record a cumulative-effect adjustment, on a modified-retrospective basis, within retained earnings for excess tax benefits
not previously recognized as net deferred tax assets. The Company also anticipates that ASU 2016-09 will introduce more volatility to
its effective income tax rate, net income and earnings per share due to the effect of tax benefits or shortfalls related to restricted stock
unit vestings or stock option exercises.

When applicable, the Company accrues for the effects of uncertain tax positions and the related potential penalties and interest

through income tax expense. As of March 31, 2017 and 2016, the Company has no material uncertain tax positions and no interest and
penalties were recognized during the years ended March 31, 2017, 2016 and 2015, respectively.

The Company and its subsidiaries are subject to U.S. federal income tax, as well as income tax of multiple state and foreign

jurisdictions. Fiscal years 2012 through 2016 remain open to examination in Germany and Abiomed Europe GmbH, the Company’s
main operating subsidiary in Germany is currently being audited for those years. All tax years remain subject to examination by the
Internal Revenue Service and state tax authorities, because the Company has net operating loss and tax credit carryforwards which
may be utilized in future years to offset taxable income, those years may also be subject to review by relevant taxing authorities if the
carryforwards are utilized.

F-25

Note 11. Commitments and Contingencies

Commitments

Leases

The Company’s corporate headquarters is located in Danvers, Massachusetts. This facility encompasses most of the Company’s
U.S. operations, including research and development, manufacturing, sales and marketing and general and administrative departments.
On August 12, 2016, the Company entered into a new lease agreement to expand its existing corporate headquarters which includes
163,560 square feet of space. The initial term of the lease agreement commenced on August 12, 2016 and terminates on August 31,
2026. The Company has options to extend the initial term for three separate periods of five years each. In connection with the entry
into this new lease agreement, the Company terminated the previously existing lease for the facility dated February 24, 2014, as
amended by the First Amendment to Lease dated April 30, 2015 and the Second Amendment to Lease effective January 1, 2016. The
Company also terminated the purchase and sale agreement it had entered into to acquire the facility for $16.5 million in December
2015 when it entered into this new lease agreement in August 2016.

The lease agreement provides the Company with an exclusive option to purchase the building on or before August 31, 2022,
subject to certain conditions set forth therein. In addition, the lease agreement grants the Company a one-time right of first offer to
purchase the building from September 1, 2022 until August 31, 2026, if the lessor decides to sell the building or receives an offer to
purchase the building from a third-party buyer. The Danvers, Massachusetts building lease is being recorded as a capital lease. The
payments under the lease are accounted for as interest and principal payments over 15 years.

Future minimum lease payments under non-cancelable leases as of March 31, 2017 are approximately as follows:

Fiscal Years Ending March 31,

Capital
Lease

Operating
Leases

2018
2019
2020
2021
2022
Thereafter

Total minimum lease payments
Less amounts representing interest
Total capital lease obligation
Less current capital lease obligation
Capital lease obligation, net of
current portion

1,670
1,593
1,532
1,542
1,084
752
8,173

(in $000s)
$

1,311
1,349
1,349
1,373
1,390
13,746
20,518
(4,180)
16,338
(799)

15,539

In February 2017, the Company entered into a lease agreement for an additional office space in Danvers, Massachusetts which

expires in July 2022. The annual rent expense for this lease agreement is estimated to be $0.2 million.

In September 2016, the Company entered into a lease agreement in Berlin, Germany which commences in May 2017 and

expires in May 2024. The annual rent expense for this lease agreement is estimated to be $0.3 million.

The Company also entered into a lease agreement in October 2016 through September 2021 for an office in Tokyo, Japan

which houses regulatory and training personnel as we prepare for commercial launch in Japan. The annual rent expense for this lease
agreement is estimated to be $0.9 million.

In December 2016, the Company entered into a purchase and sale agreement to acquire its existing European headquarters in

Aachen, Germany, consisting of 33,000 square feet of space. Pursuant to the purchase and sale agreement, the Company acquired the
property for approximately $12.6 million in February 2017.

License Agreements

In April 2014, the Company entered into an exclusive license agreement for the rights to certain optical sensor technologies in

the field of cardio-circulatory assist devices. The Company made a $1.5 million upfront payment upon execution of the agreement and

F-26

could make additional payments of up to $4.5 million upon the achievement of certain development milestones. The Company paid
approximately $0.8 million in development milestones which are included with research and development expenses for the fiscal year
ended March 31, 2017.

Contingencies

From time to time, the Company is involved in legal and administrative proceedings and claims of various types. In some
actions, the claimants seek damages, as well as other relief, which, if granted, would require significant expenditures. The Company
records a liability in its consolidated financial statements for these matters when a loss is known or considered probable and the
amount can be reasonably estimated. The Company reviews these estimates each accounting period as additional information is
known and adjusts the loss provision when appropriate. If a matter is both probable to result in liability and the amounts of loss can be
reasonably estimated, the Company estimates and discloses the possible loss or range of loss. If the loss is not probable or cannot be
reasonably estimated, a liability is not recorded in its consolidated financial statements.

On April 25, 2014, the Company received an administrative subpoena from the Boston regional office of the United States
Department of Health and Human Services, or HHS, Office of Inspector General requesting materials relating to the Company’s
reimbursement of employee expenses and remuneration to healthcare providers from July 2012 through December 2012, in
connection with a civil investigation under the False Claims Act (the “FCA Investigation”). Subsequently, the Company received
Civil Investigative Demands from the U.S. Attorney’s Office for the District of Massachusetts that collectively sought additional
information relating to this matter for the time period of January 1, 2011 through September 14, 2016. The Company continues to
cooperate fully with the government in this investigation and is exploring various ways to resolve this matter with the government.
The Company is not able to predict what action, if any, might be taken in the future as a result of the investigation, or the potential
impact on its financial position.

Thoratec Corporation, or Thoratec, has challenged a number of Company owned patents in Europe in connection with the

launch of their HeartMate PHP medical device, or PHP, in Europe. These actions all relate to Thoratec’s ability to manufacture and
sell their PHP product in Europe. These actions do not cover the Company’s ability to manufacture or sell its Impella line of devices.
Thoratec is currently a subsidiary of Abbott Laboratories since January 2017.

In October 2012, Thoratec filed a notice of opposition in the European Patent Office, or EPO, to a Company owned European

patent covering a ‘pigtail’ feature on a blood pump. In October 2014, the EPO dismissed Thoratec’s opposition, and in December
2014, Thoratec filed a notice of appeal. The appeal was heard on January 20, 2017 by the EPO Board of Appeals. The Company
prevailed at the EPO Board of Appeals and succeeded in upholding the patent in an amended form. The approved amended claim
covers the combination of a blood pump with a pigtail and an expanding suction basket and funnel feature. The Board of Appeals is
the highest level at the EPO so there are no further challenges to this patent possible at the EPO by Thoratec.

In December 2014, Thoratec filed a nullity suit in German’s Patent Federal Court against a German “pigtail” patent owned by

the Company with a flexible extension feature, and auxiliary pigtail, basket and funnel features. The validity hearing was held in
November 2016 and the Patent Federal Court found the patent invalid. The Company is appealing this decision.

In August 2015, Thoratec filed a nullity action in German Patent Federal Court against two Company owned patents covering a

“magnetic clutch” feature. These magnetic clutch patents were acquired by the Company in July 2014, in connection with its
acquisition of ECP and AIS. The validity hearing for the magnetic clutch patents is scheduled for June 2017; the Court’s preliminary
opinion is that the magnetic clutch claims are invalid.

In September 2015, the Company filed counterclaims in the magnetic clutch action in Germany asserting that the PHP product
infringes the two magnetic clutch patents and the two pigtail patents. The infringement trial has been stayed, pending resolution of the
German and EPO nullity actions.

In December 2015, the Company received a letter from Maquet Cardiovascular LLC, or Maquet, a subsidiary of the Getinge

Group, and maker of the intra-aortic balloon pump, asserting that the Company’s Impella devices infringe certain claims having
guidewire, lumen and sensor features which were in two Maquet patents and one pending patent application in the U.S. and elsewhere,
and attached a draft litigation complaint and encouraged the Company to take a license from Maquet. In January 2016, the Company
responded to Maquet stating that it believed that the cited claims were invalid and that its Impella devices did not infringe the cited
patents. In May 2016, Maquet sent an additional letter notifying the Company that the pending U.S. patent application had been
issued as a U.S. patent and repeated their earlier assertion and encouraged the Company to discuss taking a license from Maquet. The
three patents expire September 2020, December 2020 and October 2021. On May 19, 2016, the Company filed suit in U.S. District
Court for the District of Massachusetts, or D. Mass., against Maquet seeking a declaratory judgment that the Company’s Impella
devices do not infringe Maquet’s cited patent rights.

F-27

On August 24, 2016, Maquet sent another letter to the Company identifying four new U.S. continuation patent filings with
claims that Maquet alleges are infringed by the Company’s Impella devices. Of the four U.S. continuation applications, one issued as a
patent on January 17, 2017, one issued as a patent on February 7, 2017, one issued as a patent on March 21, 2017, and one has not
begun substantive prosecution. The three patent issued will expire in September 2020 and if the fourth continuation application issues
it will also expire in September 2020. On September 23, 2016, Maquet filed a response to the Company’s suit in D. Mass., including
various counterclaims alleging that the Company’s Impella 2.5, Impella CP, Impella 5.0, and Impella RP heart pumps infringe certain
claims of the three original issued U.S. patents. The case is in its early stages and the next hearing on this case is scheduled for
November 2017. With regard to the six Maquet patents, in March and April 2017 the Company filed requests for inter partes review,
or IPR, at the U.S. Patent & Trademark Office’s Patent Trial and Appeals Board, or PTAB, asserting that the claims are invalid in
view of prior art blood pump technology. The PTAB’s decisions on whether to institute the IPRs are expected beginning September
2017.

On February 9, 2017, Thoratec filed an opposition against a Company patent acquired from ECP and AIS relating to a housing

structure for an expandable pump. The deadline for the Company to respond to the opposition is in September 2017.

The Company is unable to estimate a potential liability with respect to the legal matters noted above. There are numerous
factors that make it difficult to meaningfully estimate possible loss or range of loss at this stage of the legal proceedings, including that
the FCA Investigation and patent disputes with Thoratec and Maquet remain either in relatively early stages, or there are significant
factual and legal issues to be resolved and information obtained or rulings made during any lawsuits or investigations that could affect
the methodology for calculation.

Note 12. Accrued Expenses

Accrued expenses consisted of the following:

Employee compensation
Sales and income taxes
Research and development
Accrued capital expenditures
Professional, legal and accounting fees
Marketing
Warranty
Other

March 31, 2017

March 31, 2016

(in $000's)

23,290
3,180
2,349
2,300
2,019
1,827
717
2,021
37,703

18,359
2,527
1,587
-
1,764
1,146
998
2,001
28,382

Accrued employee compensation consists primarily of accrued bonuses, accrued commissions and accrued employee benefits at

March 31, 2017 and 2016.

Note 13. Segment and Enterprise Wide Disclosures

The Company operates in one business segment—the research, development and sale of medical devices to assist or replace the
pumping function of the failing heart. The Company’s chief operating decision maker (determined to be the Chief Executive Officer)
does not manage any part of the Company separately, and the allocation of resources and assessment of performance are based on the
Company’s consolidated operating results. International sales (sales outside the U.S. and primarily in Europe) accounted for 9%, 8%
and 10% of total product revenue during the fiscal years ended March 31, 2017, 2016 and 2015, respectively. As of March 31, 2017
and 2016, most of the Company’s long-lived assets are located in the U.S. except for $23.2 million and $5.9 million at March 31, 2017
and 2016, respectively, which are located primarily in Germany. As described in Note 6 above, the Company acquired its European
headquarters in Aachen, Germany in February 2017 for $12.6 million.

F-28

Note 14. Quarterly Results of Operation (Unaudited)

The following is a summary of the Company’s unaudited quarterly results of operations for the fiscal years ending March 31,

2017 and 2016:

Total revenues
Cost of product revenue
Other operating expenses
Other income, net
Income before income taxes
Income tax provision
Net income
Basic net income per share
Diluted net income per share

Fiscal Year Ended March 31, 2017

1st Quarter

2nd Quarter

3rd Quarter

(in $000's)

4th Quarter

Total Year

$
$
$

102,995
15,070
66,692
192
21,425
8,515
12,910
0.30
0.29

$
$
$

102,955
17,309
71,138
228
14,736
5,861
8,875
0.21
0.20

$
$
$

114,674
18,987
70,284
423
25,826
10,394
15,432
0.36
0.34

$
$
$

124,680
19,261
76,425
362
29,356
14,457
14,899
0.34
0.33

$
$
$

445,304
70,627
284,539
1,205
91,343
39,227
52,116
1.21
1.17

Fiscal Year Ended March 31, 2016

1st Quarter

2nd Quarter

3rd Quarter

(in $000's)

4th Quarter

Total Year

$
$
$

73,432
10,868
47,533
116
15,147
6,288
8,859
0.21
0.20

$
$
$

76,359
12,144
51,398
149
12,966
5,231
7,735
0.18
0.17

$
$
$

85,795
12,744
55,608
55
17,498
6,943
10,555
0.25
0.23

$
$
$

93,957
14,663
59,481
414
20,227
9,229
10,998
0.26
0.24

$
$
$

329,543
50,419
214,020
734
65,838
27,691
38,147
0.90
0.85

F-29