LivaNova PLC (NASDAQ:LIVN), a medical device company, today announced 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 level payment in 2025. Despite the company’s hopes for a higher reimbursement level, LivaNova expressed in a recent SEC filing that it does not expect a negative impact on its business from 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. CMS’ decision means that VNS™ Therapy will remain in Level 5 of the Outpatient Payment Classification (APC) for Neurostimulation and Related Procedures under the Medicare Outpatient Hospital Prospective Payment System for another year.
The company, headquartered in London and principally listed on 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 said it will continue to explore other reimbursement opportunities for its VNS™ Therapy for DRE.
The SEC filing did not include financial projections or statements from company executives regarding the CMS decision. However, the company’s commitment to pursuing additional reimbursement opportunities indicates a proactive approach to maintaining the commercial viability of its VNS™ Therapy.
Investors and interested parties were made aware of these developments through the company’s recent 8-K filing with the US Securities and Exchange Commission. The document also included routine administrative details and exhibited as an interactive data file.
LivaNova, previously 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 ends December 31.
In other recent news, LivaNova PLC reported 11% revenue growth in its third quarter, marking the seventh consecutive quarter of double-digit growth. The company raised its 2024 revenue forecast to 8.5%-9.5% and expects adjusted diluted earnings per share between €3.30 and €3.40. Chief Executive Officer Vladimir Makatsaria attributes market share gains in the cardiopulmonary and epilepsy segments, effective pricing strategies and the successful launch of the Essenz heart-lung machine as key growth drivers.
LivaNova’s US revenues increased 15%, with cardiopulmonary revenues up 15% to €172 million and epilepsy revenues up 9%. The company’s cash balance reached €346 million with total debt of €626 million as of September 30, 2024.
Despite an expected increase 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 in 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 seen alongside some interesting financial metrics from InvestingPro. The company’s revenue growth of 11.04% in the trailing twelve months and 11.18% in the most recent quarter suggests steady expansion of its business, which could help offset any challenges arising from unchanged reimbursement rates .
InvestingPro Tips indicate that LivaNova is expected to see net income growth this year, and analysts have raised their earnings forecasts for the coming period. This positive outlook aligns with the company’s statement that the CMS decision is not expected to have a negative impact on its business.
Additionally, LivaNova operates at a moderate level of debt and has liquid assets that exceed near-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 that it has room to maneuver in pricing strategies if needed.
For investors interested in a deeper analysis of LivaNova’s financial health and prospects, InvestingPro offers 10 additional tips that could provide valuable information for decision making in the medical device industry.
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