LivaNova PLC (NASDAQ:LIVN), a medical device company, announced today that the U.S. Centers for Medicare and Medicaid Services (CMS) will continue to classify VNS Therapy™ for drug-resistant epilepsy (DRE) at the same payment level in 2025. Despite the company's hopes for a higher reimbursement tier, LivaNova expressed in a recent SEC filing that it does not foresee a negative impact on its business due to this decision.
VNS Therapy™, which stands for Vagus Nerve Stimulation Therapy, is a treatment designed for patients who have not found relief from drug therapies. The CMS decision means that VNS Therapy™ will remain in the Level 5 Neurostimulator and Related Procedures Ambulatory Payment Classification (APC) under the Medicare Hospital Outpatient Prospective Payment System for another year.
The company, headquartered in London with a primary listing on the NASDAQ, is known for its focus on the development and manufacturing of devices for the cardiovascular and neuromodulation markets, including the VNS Therapy™ system. LivaNova stated that it will continue to explore other reimbursement opportunities for its VNS Therapy™ for DRE.
The SEC filing did not include any financial projections or statements from company executives regarding the CMS decision. However, the company's commitment to pursuing further reimbursement opportunities indicates a proactive approach to maintaining the commercial viability of its VNS Therapy™.
Investors and stakeholders were informed of these developments through the company's recent 8-K filing with the U.S. Securities and Exchange Commission. The filing also included routine administrative details and exhibits such as an interactive data file.
LivaNova, formerly known as Sand Holdco Plc, has undergone previous name changes and continues to operate under the laws of England and Wales. The company's fiscal year-end is December 31.
In other recent news, LivaNova PLC has reported an 11% revenue growth in its third quarter, marking the seventh consecutive quarter of double-digit growth. The company has raised its revenue guidance for 2024 to 8.5%-9.5% and anticipates adjusted diluted earnings per share to be between $3.30 and $3.40. The CEO, Vladimir Makatsaria, credits market share gains in cardiopulmonary and epilepsy segments, effective pricing strategies, and the successful launch of the Essenz heart-lung machine as key growth drivers.
LivaNova's U.S. revenue increased by 15%, with cardiopulmonary revenue up 15% to $172 million and epilepsy revenue increasing by 9%. The company's cash balance reached $346 million with total debt at $626 million as of September 30, 2024.
Despite an anticipated step-up in R&D and SG&A expenses in Q4 2024 and an increase in the adjusted effective tax rate, LivaNova remains optimistic about maintaining momentum into 2025, focusing on operational performance, market share gains, and increased investment in innovation.
InvestingPro Insights
LivaNova's recent announcement regarding CMS reimbursement for its VNS Therapy™ can be viewed alongside some interesting financial metrics from InvestingPro. The company's revenue growth of 11.04% over the last twelve months and 11.18% in the most recent quarter suggests a steady expansion of its business, which could help offset any potential challenges from unchanged reimbursement rates.
InvestingPro Tips indicate that LivaNova is expected to see net income growth this year, and analysts have revised their earnings upwards for the upcoming period. This positive outlook aligns with the company's statement that the CMS decision is not expected to negatively impact its business.
Additionally, LivaNova operates with a moderate level of debt and has liquid assets exceeding short-term obligations, which could provide financial flexibility as it explores other reimbursement opportunities for VNS Therapy™. The company's strong gross profit margin of 68.03% also suggests it has room to maneuver in pricing strategies if needed.
For investors interested in a deeper dive into LivaNova's financial health and prospects, InvestingPro offers 10 additional tips that could provide valuable insights for decision-making in the medical device sector.
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