LivaNova at Baird Global Healthcare Conference: Strategic Growth Insights

On Tuesday, 09 September 2025, LivaNova PLC (NASDAQ:LIVN) presented at the Baird Global Healthcare Conference 2025. The company outlined its robust growth trajectory and strategic plans for the future. LivaNova’s focus on core businesses and expansion into new markets was emphasized, alongside challenges such as the need for CMS reimbursement in emerging areas.

Key Takeaways

• LivaNova has seen double-digit growth in 9 out of the last 10 quarters.
• The cardiopulmonary business has gained significant market share, especially in oxygenators.
• Strategic expansion into obstructive sleep apnea (OSA) and difficult-to-treat depression (DTD) markets is contingent on CMS reimbursement.
• An Investor Day on November 12 will provide further details on long-range plans.

Financial Results

• Cardiopulmonary Business:

- Increased market share in oxygenators from 30% to 40% over recent years.

- Essence heart-lung machine upgrades are driving growth, with penetration expected to reach 100% by 2027.

- The price for the new generation heart-lung machine is double that of the old version.

• Epilepsy:

- U.S. market growth is mid-single digits, while international markets are seeing high-single to low-double-digit growth.

- CMS proposal could increase reimbursement for end-of-service implants by 48%.

Operational Updates

• Cardiopulmonary Business:

- LivaNova has 8,000 heart-lung machines globally, holding a 70% market share.

- The Essence upgrade cycle is projected to take eight years for full market penetration.

• Epilepsy:

- The CORE VNS study shows significant seizure reduction, enhancing market access.

• Difficult-to-Treat Depression (DTD):

- RECOVER evidence submitted to CMS, with a commercial team ready for potential approval.

• Obstructive Sleep Apnea (OSA):

- Data submission is forthcoming, with potential independent launch plans.

Future Outlook

• Strengthening core businesses in epilepsy and cardiopulmonary.
• Expanding into OSA and DTD markets, pending CMS approval.
• Upcoming Investor Day will outline vision, strategy, and financial expectations.

Q&A Highlights

• Cardiopulmonary: Competitors face supply issues, while the market grows faster than expected.
• Epilepsy: The CORE VNS study encourages earlier therapy use by physicians.

In conclusion, LivaNova is poised for continued growth with strategic initiatives in both existing and new markets. For a detailed account, refer to the full transcript below.

Full transcript - Baird Global Healthcare Conference 2025:

Dave Rescott, Senior Med Tech Analyst, Baird: Thanks everyone for joining us. My name is Dave Rescott, senior med tech analyst here at Baird. We are pleased to have the LivaNova team to join us for what I believe is at least my final session for today. So thanks for joining us all day. We’ve got CEO Vlad Makatzari with us, Alex Hartzberg, the CFO and then Brianna Gottlin, VP of Investor Relations.

So thanks for joining us. I wanted to start off maybe from a high level on some of the recent trends you’ve been seeing in the business. I think you’re maybe eight or nine quarters now into a double digit growth number. Last year at the Baird conference, I think you outlined what was a multiyear kind of growth goal, we’ll say, of high single digits. You’ve done better than that so far.

So can you help us think about maybe where we are today, where you were a year ago and where maybe you think this story is kind of going?

Vlad Makatzari, CEO, LivaNova: Yeah. Well, first of all, David, thank you for hosting us. And thank you everybody for your interest in LivaNova. And thank you for being here, especially given that it’s the last meeting of the day. So look, and maybe I’ll start with that.

A year ago, we were together and you asked me a question on expectations. And I think if I look back during this year, my top level summary is that my confidence in our ability to grow and sustain durable growth in our core business has increased. And if I looked at the last quarter, you’re right. It was nine out of 10 quarters of double digit growth. And it’s the growth is very well distributed across various growth drivers.

So one is, obviously, in the cardiopulmonary business, we continue to gain share in oxygenators. And over the last couple of years, we went from 30% to 40% share. Secondly, we are driving the team is driving upgrade from a old generation of heart lung machine to the new one called Essence. And that upgrade is going really well with a significant price premium that we are able to maintain. Number three is one of the LivaNova strength is ability to strategically address price and our ability to continuously improve our pricing has been another growth driver.

And then finally, the markets are healthy. Whether it’s growth of open heart surgical procedures or the growth of epilepsy market, the market have growth have been healthy. So altogether, that kind of ensured that our growth was consistently high. So that’s kind of looking back a little bit. Looking forward, we will have Investor Day on November 12, at which we will at that time, we will outline our vision and strategy moving forward, the portfolio that we expect to see in the future and our financial expectations, including capital allocation strategy.

But in a nutshell, it’s strengthened our core in epilepsy and cardiopulmonary business. And then it’s getting into the markets with significant unmet patient need, significant growth opportunity, and in the markets where we have the right to win. And the next opportunity for us is obstructive sleep apnea. And then beyond that, we have an option to get into difficult to treat depression if that category will be reimbursed by CMS. So that’s kind of where we were during last year and a little bit of a preview on where we’re going moving forward.

Dave Rescott, Senior Med Tech Analyst, Baird: Without getting too much into the specifics about what we’ll hear in November, do you have a sense as to if we’re going to be hearing about a three year LRP kind of definitive high single digit revenue, low double, whatever those metrics are, how should we think about what to expect at the Analyst Day?

Alex Hartzberg, CFO, LivaNova: Sure. I would encourage you to attend our our Investor Day. We’re going to refrain from sharing specifics, but as Vlad said, we’re going to talk about our strategy and vision. We will share an LRP, capital allocation strategy, and plans for OSA commercialization.

Dave Rescott, Senior Med Tech Analyst, Baird: Perfect. I wanted to start on cardiopalm. You know, one of the key pieces to the business, again, you’ve got Neuromod, you’ve got the Cardiopalm segment, these other options for longer term. And Essence has been a pretty big growth driver of that upgrade cycle or of growth in that segment. You’ve had a little bit of price in there.

You’ve had a little bit of a mix shift in that segment. Can you, I guess, level set us as to where we are in that upgrade cycle, how big that opportunity is, was? And I want to ask on China as well, but maybe we’ll start with that.

Vlad Makatzari, CEO, LivaNova: Yeah. So it’s a great question. So the hard lung machine market worldwide is relatively concentrated. So we have about 8,000 units placed around the world, and that represents about 70% market share in heart lung machines. In 2023, we launched a new generation of heart lung machine called Essence.

And from that point to upgrading full market of 8,000 units would take us, we estimate, approximately eight years. But from the growth story point of view, really the first few years are critical because when we launched in 2023, 20% of all units placed in that year were Essence. And the price difference between the old and the new generation is was about double. Last year, we went from 20% to 40% placement penetration. And this year, we will go to 60%.

Next year, we expect 80%. And then in 2027, we expect that all units placed in that year will be coming from Essence. So that kind of 20% increment of placement penetration plus the price premium that we have on the machine gives us an opportunity to deliver high single double digit growth. And then beyond that, we’re looking at developing that technology where we have recurring revenue increase from service, from software upgrades, so that ultimately that essence become not just a unit that follows directions of perfusionist, but also becomes smart technology that actually gives feedback and guides healthcare practitioners on how to operate it.

Dave Rescott, Senior Med Tech Analyst, Baird: I want to jump into that, but a few follow ups. So 2023, you started off with the launch. By 2027, you will have penetrated I think you said it’s eight years to fully get through it. So that gets you through 20, what, ’31 or so or 30 Once you get beyond that price mix segment in the ’27, ’28 timeframe, what does growth in HLM kind of look like beyond the high single, low double that you see at least through ’27?

Vlad Makatzari, CEO, LivaNova: So again, we will paint that picture. I think that would be important to look holistically at cardiopulmonary business. There will be other growth drivers at the time that will come into play, new equipment, new generation of oxygenator, and so forth. But within essence, the growth will come from software upgrades and from services. You know, we still have opportunities in both.

On softwares, we don’t monetize it today in the way we can.

Dave Rescott, Senior Med Tech Analyst, Baird: And on service, we are below benchmark. So we have some good opportunities to grow there. I think either last call or maybe the one before you started to put some more details around what this innovation looks like, not necessarily titration of perfusionist automation or managing these patients, but there is opportunities to generate these types of recurring revenue streams off of upgrading, as you mentioned. Can you, I guess, touch on what the perfusionist kind of opportunity is there? And maybe help us understand or think about what can come out beyond what this near term goal is, meaning that what can HLM systems actually do that you could automate based on some of the updates and technologies that we have?

Vlad Makatzari, CEO, LivaNova: Yeah, it’s a great question. So one of the within HLM, the focus of our innovation is software, is algorithms that will make machines smarter and ultimately will help perfusionists make better decisions. So today, about it as the let me give you an analogy. The first generation machine or the previous generation machine was like a car but without navigation. And so you would have a paper map kind of that you follow and make your turn decisions as a driver based on a kind of a paper map.

I mean, still remember those days. Today, the machine gives you the navigation map. Like it tells you where to go. It gives you different parameters. But the driving is still done by the perfusionists, some are better drivers than others.

And if you think about the future of self driving cars, that actually the perfusionist will be there for controls and improving what the machine does versus actually guiding the decisions, that shift is going to happen in the future. And what we need to do now is make sure that we have hardware capacity that has the capability to kind of build that future and that we have our own R and D team that is capable of delivering on that innovation. In the same way in which self driving cars are becoming something because of innovation that has happened on the chip side or whatever it is in the

Dave Rescott, Senior Med Tech Analyst, Baird: past couple of years, the reason why this has not been something yet has because or has been because of the fact that innovation in this segment has been limited until now. Absolutely. And in the way in which we keep thinking about this self driving example, if in theory you can help perfusionists make decisions at some point, can you go beyond that five years from then and have the HLM system itself automate or titrate?

Vlad Makatzari, CEO, LivaNova: Yeah. I mean, that is, I think that is kind of something that we will be working with the medical community with. It’s a broader question that just in HLM, think that’s the direction healthcare is going is much more automation. And ultimately, it’s going to do is going to improve clinical outcomes. It’s going to democratize medicine and kind of improve skills of physicians that are doing these procedures.

Oxygenators,

Dave Rescott, Senior Med Tech Analyst, Baird: right? A segment that you have been picking up a significant amount of share. And I think over the past two years, it picked up 10 points of cumulative share in that segment. The market, I believe, is maybe not necessarily a high growth market, but your growth has been double digits for a while now. It’s been or in part because of some competitive issues, some supply chain issues.

And that was something that popped up three to four years ago. Maybe we’re still at a pace where you’re growing double digits. What level of visibility do you have into that segment, into the supply chain constraints that other competitors are having that gives you visibility into expanding capacity, which has been something that you’ve been

Brianna Gottlin, VP of Investor Relations, LivaNova: doing as well? Let me start off, David, and I’ll and Vlad and Brianna can build on it. So what we believe is the market has actually grown faster than any of us had ever anticipated. Historically, the market open heart procedure market has grown 1% to two percent. We believe that over the last several years, it’s grown closer to four percent to five percent.

So, and the reason for that is there underdiagnosed patients during the COVID pandemic. That was one big reason. So now a lot of there’s been this pent up demand in the way. There’s also the population is getting older. And so from a demographic perspective, that’s also helping the market growth.

And also from a, call it, minimally invasive or TAVI procedures have sort of the growth of those procedures have come down. And now the patients, the older patients who received TAVIES in the past are now coming back for sort of the surgical valve replacement. So the market itself has grown faster and we’re benefiting from that. We’re also taking share, right? And that has come by way of our ability to supply the market.

In a supply constrained market, as you mentioned, some of our competitors have had some issues with quality issues or what have you, supply issues, and we’ve been able to fill that demand, that market share has become stickier than even we anticipated at that point in time. We had talked several years ago that there was this anticipation of competitors coming back. Well, we found that this growth has become much more durable than we actually expected it. So we’re picking up market share. And because of the supply constrained market, we’re strategically taking price, which has also been a significant growth driver for us over the last

Dave Rescott, Senior Med Tech Analyst, Baird: several years. Does it feel like the assumption for what will be laid out over the next couple of years is under the base case of this market growing 4% to 5%? Or do you think in a conservative view or the view that you perhaps may take is one in which it reverts back to where we were before today?

Vlad Makatzari, CEO, LivaNova: Yeah. So I think, though, going back to what we thought a year ago versus today, we have significantly more confidence in our ability to continue gain share. So whether the market is going to go 3% to 4% or 4% to 5%, we believe that what we have done on the manufacturing front, on the commercial execution front, and moving forward on the innovation front on oxygenators will provide continuous opportunities to gain share. But going back to your point on the market, some of the things like, so for example, I always talked about pent up demand, like patients during COVID didn’t get diagnosed well enough. So on the outset of the COVID, you know, they’re coming with more advanced cardiovascular disease and hence going to open surgery versus stents.

That will maybe kind of will try will go away. But the fact that we’re getting older and will require more surgeries, that will stay there. So I think that, unfortunately, from the societal point of from health care point of view, I kind of see that open heart surgery will continue to increase.

Dave Rescott, Senior Med Tech Analyst, Baird: I want to move on to epilepsy in the interest of time. You talked about this worldwide momentum last quarter. I know that there’s some different pieces to international, to U. S, there’s some price. How do we think about normalized trends in that kind of market over a multiyear view?

And the second piece to it is on this core VNS study that you called out recently. How are you thinking about being able to leverage what that data is to move the needle in VNS for epilepsy patients?

Alex Hartzberg, CFO, LivaNova: Sure. I’ll take that one. So just to start on market growth, we’ve said that The US market’s growing roughly mid single digits. Outside The US, it’s growing a little bit faster. It’s just less penetrated there.

So high single digits to low double digits is a reasonable assumption. Regarding the core data, CORE VNS is our largest global prospective study of VNS therapy to date. The impressive outcomes demonstrate early, durable, and meaningful seizure freedom and reduction in a range of seizure types and in children and adults. So it’s still early on, but the feedback has been really encouraging from KOLs. Some of them have said that they could use this data to potentially change where they utilize VNS therapy in their treatment algorithm so they could actually use it a little bit earlier.

Driving clinical evidence is one of our key strategies for driving growth for the epilepsy franchise and it’ll further strengthen it.

Vlad Makatzari, CEO, LivaNova: And

Dave Rescott, Senior Med Tech Analyst, Baird: market growth, mid single US, high single, low double OUS. Volumes, price, is that a mix of both or just volumes you’re referring to?

Alex Hartzberg, CFO, LivaNova: That’s referring to market growth.

Dave Rescott, Senior Med Tech Analyst, Baird: Okay. I think last quarter you talked about this potential reimbursement update. Can you level set us on or remind us at least maybe of what the potential outcomes or what the outcomes there are, what you can maybe do with that, and then how we should start to think about where growth in this segment could go should reimbursement go higher.

Alex Hartzberg, CFO, LivaNova: Great question. So we were really pleased with CMS’s proposal to move end of service or replacement implants from a level four, code to a level five. That is a 48% increase in reimbursement. As a reminder, seventy percent of end of implants in The US are end of service, and forty percent of DRE patients fall into a Medicare they’re Medicare patients, and thirty percent are Medicaid. We believe that this could, if finalized, would go into effect on 01/01/2026, but it could create a more sustainable or favorable financial profile for a physician to establish a long term VNS therapy practice.

Dave Rescott, Senior Med Tech Analyst, Baird: I remember last year there was a similar proposal for de novo implants, So the thirty percent of the market that is an initial implant and that didn’t go through but potentially it could get brought back up again. Know it was recommended to go through by the CMS panel. We hadn’t seen that play out in 2025. But now that you have momentum, maybe we could argue on the replacement side potentially Is there a potential longer term for VNS reimbursement as a whole to get better, I think, at the end of the day?

Or if you think about other therapies for these patients like DBS and RNS, some of the feedback from physicians is always that reimbursement had been a little bit of a gating factor. So do we think that you’re starting to now see momentum in this segment that could put VNS either at a higher level relative to other competitive therapies out there?

Alex Hartzberg, CFO, LivaNova: Yeah, great question. So we’ve certainly improved our capabilities in terms of market access and health economics by hiring key talent on this front, and we’re really pleased with the progress they’ve made. So one aspect of that is level five proposal from CMS, which was included in July. Also, we’re really encouraged because this is the second year in a row the HOPPS panel recommended unanimously to add the new patient implants to a level six or establish a level six reimbursement code. This is an independent panel and was not included in the initial July proposal, but given the momentum we are cautiously optimistic that they would consider it.

And we do believe that level six is the appropriate payment code for a new patient implant.

Dave Rescott, Senior Med Tech Analyst, Baird: I think last year the level six panel was at the August. I missed it if it already happened. Did it already happen and level six is now going to be decided on in in October? Or

Alex Hartzberg, CFO, LivaNova: So it was voted unanimously. It was a very similar process to what occurred last year, but it is an independent panel. The rate of the probability of success, I guess you could call it that, it’s not that high. So historically or based on precedent, you could say that if a panel were to vote unanimously, we’ve seen CMS accept that 35% of the time. But we’re really encouraged by CMS moving end of service to a level five code.

Dave Rescott, Senior Med Tech Analyst, Baird: Okay. So to not cross my wires here, this is for end of service, not for de novo implants?

Alex Hartzberg, CFO, LivaNova: Level five is for end of service specifically, which was included in the proposal. The hops panel was on new patient implants to get to that level six or to establish a level six code.

Vlad Makatzari, CEO, LivaNova: So you can think about it. There’s a very high probability that

Dave Rescott, Senior Med Tech Analyst, Baird: the replacement will go from level four to level five as of January 1. There’s a lower than fifty percent chance probability that de novo will go from level five to level six. Okay. That makes sense to me. Maybe move on to treatment resistant depression.

I think the last update we had on the call was that submissions were fully forthcoming or were forthcoming. Where do I guess we stand today on that front? Yes.

Brianna Gottlin, VP of Investor Relations, LivaNova: Go ahead. Yes. So we’ve obviously engaged with CMS in discussing the reimbursement situation. We’ve submitted our RECOVER evidence. And the totality of evidence suggests that this is a great opportunity for us and for DTD patients to get access to this important therapy.

So we’re in a constant communication with CMS. And we think that from a process perspective, we started the discussion. It’s about a twelve month sort of window of consideration once they sort of select the case for an assessment. And beyond that, we believe that there’s a great opportunity here. We retained a small organization just for in anticipation of a potential positive decision there, a small commercial organization that will allow us to quickly scale the sales in that category.

So we feel really good about where this could potentially go. And I just want to add a

Vlad Makatzari, CEO, LivaNova: couple of things on the clinical side outside of the CMS discussion. Again, this is the patient population that has no alternative. And what we saw in the twelve months data, it was 43 reduction in suicidality. That is very, very significant. The second thing is now we also have twenty four months data.

And the significance of that is what in those results is that we see a durability of impact. So eighty percent of patients that positively reacted after year one have positive reaction after twenty four months. And secondly, we see continuously growing improvement in MADRS score. I think it was year on year additional eight percent improvement. So the combination of our discussions with CMS and more importantly the new clinical evidence that we start seeing gives us more confidence in this opportunity.

Dave Rescott, Senior Med Tech Analyst, Baird: This used to be an opportunity that was within the company several years ago. Don’t want to be the one to say it was a $200,000,000 revenue line, but I think it was pretty sizable So can you help us think about under the scenarios in which you do receive this NCD? If you don’t, you obviously have high mark, which is maybe some momentum in the direction of expanding coverage there. But how should we think about what the size of this could be in under in both these scenarios maybe?

Brianna Gottlin, VP of Investor Relations, LivaNova: Yes. So significant market opportunity for us, obviously. And I think, as I said, we’ve retained a very small infrastructure, commercial infrastructure that will allow us to scale the business quickly. So the high mark sort of approving the reimbursement forward is a positive step forward. I think it’s kind of an indicator of where potentially CMS could go.

But we don’t want to get too overly confident about it. What we do know is that this category really requires CMS approval to be viable. And so that’s our focus at all times, I should say.

Dave Rescott, Senior Med Tech Analyst, Baird: Okay. You talked about this retaining the small group in depression. OSA is, of course, another market that you’ve had data on. Submitting, we’ll see that data, I think, later this year. And then submissions forthcoming.

How do we think about the relative level of thought process in the investment of a DTD small team, potentially a bigger team on the OSA side? How do we think about how you’re thinking about this when we think about OSA becoming a piece of the lead in Nova store over the next

Vlad Makatzari, CEO, LivaNova: two to three years? So OSA for us is a clear priority from if you think about our priorities within neuromodulation, number one is maintain leadership in epilepsy and long term. Number two is get into OSA. It gives us access to faster growth markets and where we have the right to win. And then we have optionality with GTD given the CMS approval.

During the Investor Day, we will frame the plan and how do we see the investment in this category. But I would say at this point that we see OSA as a significant opportunity for us. We are confident in our ability to launch it ourselves while we’re still evaluating potential partnerships. But again, this is significantly differentiated technology from clinical point of view and from engineering point of view. And in my mind, those two things, combination of those two things gives us the right to win in this marketplace.

Dave Rescott, Senior Med Tech Analyst, Baird: I know we’re almost out of time here. So I wanted to ask, looking into next year, the next twelve to twenty four months, and maybe more so in 2026, again, this historically, we’ve thought about as high single on the top line, maybe high single, low double on the EPS line. You’ve got SNIA, which is a moving piece. Tax has been an incremental headwind in the past couple of years. Anything in particular to call out on down the P and L as we think about whether or not 6% to 7% on the top line, nine to 10% EPS next year is the right way to think about this?

Brianna Gottlin, VP of Investor Relations, LivaNova: Nothing specific to call out from a P and L perspective. We’ll obviously address 2026 guidance. I knew you were going to go there, but I appreciate the try. We’ll talk about 2026 later on. Okay.

I think with that, we are out of time. So thanks

Dave Rescott, Senior Med Tech Analyst, Baird: so much for joining us. Thank you. Thank you. Thank you.

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