21st Jul 2025 14:20
(Alliance News) - AOTI Inc on Monday said it was impacted by a lower Veterans Administration headcount in the US, leading to lower than anticipated second quarter revenue.
The Oceanside, California-based wound healing-focused medical technology company expects disruption to extend into the second half of 2025, but highlighted it anticipates the impact to abate as the year progresses, as it has been reported that most initiatives have been implemented.
AOTI expects to report half-year revenue of at least USD31 million, up at least 18% from USD26.3 million in the first half of 2024.
Further, the company highlighted an impact from changes in Arizona's healthcare system, noting that: "Against a backdrop of major upheavals in the Arizona healthcare system, the company remains actively engaged with Medicaid insurers in the state and with the State Medicaid agency, and continues to make progress in resolving the previously flagged payment issues. Payment of legitimate claims, although making progress, have been taking significantly longer than previously experienced. The company is monitoring the situation closely."
Chief Executive Officer Mike Griffiths said: "Despite current headwinds caused by the ongoing transformation of the US healthcare landscape, which has been faster and more ambitious than previously anticipated, I am confident in our medium and longer-term outlook as we continue to establish a new market segment for topical wound oxygen."
He added: "We are also continuing to move into new and higher-value market channels to diversify our revenue streams. We remain fully committed to our strategy of expanding market access, building awareness and adoption of our innovative topical wound oxygen therapy, and driving market penetration to ensure sustainable, profitable growth."
AOTI plans to publish half year results in September.
Further, AOTI said it was successfully granted a new Provider ID in California, which will allow the firm to secure insurers and obtain coverage for its topical wound oxygen therapy. Further, it will help AOTI grow in the latter part of 2026, it added.
In late June, AOTI announced its topical wound oxygen therapy received a positive recommendation from the Federal Joint Committee of Gemeinsamer Bundesausschuss in Germany, which AOTI said is the largest potential national market for its therapy.
AOTI called the positive opinion "a major validating milestone".
CEO Mike Griffiths said at the time: "This is the first market to grant us full national coverage and the G-BA has a reputation of setting an extremely high bar for reimbursement. Therefore, we believe this positive recommendation is a key, and potentially transformative, decision with respect to our prospects for penetrating healthcare markets across Europe and beyond. Not only does it provide a strong reference point for other national reimbursement bodies, including the Centers for Medicare & Medicaid Services in the US, but also further validates our market access strategy and commercial model. We look forward to building a strong commercial presence in Germany, Europe's largest healthcare market."
AOTI shares fell 19% to 72.90 pence each on Monday afternoon in London.
By Tom Budszus, Alliance News slot editor
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