14th Nov 2024 20:01
(Alliance News) - Convatec Group PLC on Thursday said it remained hopeful a decision to exclude InnovaMatrix from a Medicare list of approved treatments would eventually be reversed.
The London-based medical products and technologies company noted the Medicare Administrative Contractors publication of the Local Coverage Determination for skin substitute grafts/cellular and tissue-based products for the treatment of diabetic foot ulcers and venous leg ulcers, with a stated effective date of February 12, 2025.
The firm said its wound dressing treatment, InnovaMatrix is not covered by Medicare for DFU/VLU treatments in the LCDs. It said this would reduce patient and practitioner choice and the availability of effective solutions in the near-term.
"This is disappointing, but as expected," the company stated.
ConvaTec maintained InnovaMatrix is an excellent product delivering strong results for patients and is trusted by clinicians.
The firm remains confident of securing DFU/VLU coverage and as such, expects any exclusion from the LCDs to be temporary.
ConvaTec said it will continue to serve patients with other indications, which comprise around 55% of the US wound biologics segment and around 25% of Convatec's InnovaMatrix financial 2024 sales.
Convatec also welcomed the MACs' commentary regarding an efficient reconsideration process for products to be covered by Medicare in the future. Convatec remains confident of securing coverage.
The firm said financial 2024 guidance and the financial 2025 outlook issued on Tuesday remains unchanged.
For financial 2024, the firm expects group organic revenue growth in the range of 7.25 to 8.0%, and operating margin of at least 21.5% in constant currency. It said it is on-track to deliver double-digit growth in adjusted earnings per share and free cash flow to equity.
In financial 2025, the company continues to expect further group operating margin expansion and to deliver double-digit growth in adjusted EPS and free cash flow to equity, despite the LCDs outcome.
This will be driven by 5% to 7% organic growth in non-InnovaMatrix sales based on broadening product portfolio and new product launches, and further progress in group-wide productivity initiatives and focused commercial execution.
Shares in ConvaTec closed 3.5% lower at 247.40 pence in London on Thursday.
By Jeremy Cutler, Alliance News reporter
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