MINNEAPOLIS - CVRx, Inc. (NASDAQ: CVRX), a medical device company, announced a significant change in reimbursement for its Barostim implant procedure.
The Centers for Medicare and Medicaid Services (CMS) has updated the procedure's classification for inpatient settings in the Medicare Hospital Inpatient Prospective Payment System (IPPS) for Fiscal Year 2025.
The Barostim implant, previously associated with payments ranging from $17,000 to $23,000, will now be reassigned to MS-DRG 276, which has a national average payment of approximately $43,000. This new payment rate will become effective on October 1, 2024.
Kevin Hykes, President and CEO of CVRx, expressed approval of the CMS's decision, highlighting that the reassignment acknowledges the resources required for the Barostim implant procedure and is anticipated to improve patient access by ensuring adequate reimbursement in inpatient settings.
The Barostim System, developed by CVRx, is the first FDA-approved medical technology that uses neuromodulation to alleviate heart failure symptoms.
It operates by delivering electrical pulses to baroreceptors in the carotid artery, engaging the body's baroreflex to prompt a response that can restore balance to the autonomic nervous system and reduce heart failure symptoms.
The device not only holds the FDA's Breakthrough Device designation but is also approved for heart failure treatment in the U.S. and has received the CE Mark for heart failure and resistant hypertension in the European Economic Area.
The reclassification by CMS is expected to enhance the availability of the Barostim therapy for heart failure patients, potentially impacting the treatment landscape. This announcement is based on a press release statement from CVRx, Inc.
In other recent news, CVRx, a medical device company, demonstrated a notable 24% increase in total revenue for the second quarter, reaching $11.8 million. Despite a net loss of $14 million in the same period, the company forecasts total revenue between $50 million and $53 million for the full year of 2024.
Piper Sandler and Canaccord Genuity, two analyst firms, adjusted their price targets for CVRx, with Piper Sandler lowering it to $13 and Canaccord Genuity raising it to $15, both maintaining their previous ratings.
In addition to its financial performance, CVRx announced key executive appointments, including a new Chief Revenue Officer and Chief Medical Officer, aimed at strengthening market development and overcoming adoption barriers for its Barostim therapy.
The company is also facing potential challenges with reimbursement rates for Barostim, its lead product, due to proposed changes to the Outpatient Prospective Payment System.
Despite these challenges, CVRx remains optimistic and is working with CMS and hospital stakeholders to negotiate fair reimbursement for Barostim therapy.
The company also plans to enhance education, awareness, and clinical evidence for the therapy. These are among the recent developments for CVRx, as the company continues to focus on its growth strategy and market development efforts.
InvestingPro Insights
As CVRx, Inc. (NASDAQ: CVRX) anticipates a boost in patient access to its Barostim implant following the CMS reimbursement reclassification, the company's financial health and market performance offer additional context for investors. With a market capitalization of $180.21 million, CVRx presents a unique profile in the medical device sector. Despite a challenging period reflected by a 1-week price total return of -13.63% and a 1-month price total return of -29.54%, the company holds more cash than debt on its balance sheet, which is a positive sign of financial stability, according to one of the InvestingPro Tips.
Moreover, CVRx's gross profit margin stands impressively at 84.4% for the last twelve months as of Q2 2024, underscoring the company's ability to maintain a high level of profitability on its products. However, it's important to note that analysts do not anticipate the company will be profitable this year, and the stock has experienced significant volatility, with a 6-month price total return of -66.01%. The InvestingPro Tips also reveal that three analysts have revised their earnings upwards for the upcoming period, suggesting that there may be optimism about the company's future performance despite recent setbacks.
For investors seeking a comprehensive analysis, there are additional InvestingPro Tips available, providing deeper insights into CVRx's financials and market expectations. To explore these further, interested parties can visit InvestingPro CVRx page for a total of 11 tips that could help inform investment decisions.
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