REG - Convatec Group PLC - Convatec responds to LCDs in the United States

ConvaTecAnnouncement

14/11/2024 18:00

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RNS Number : 3349M  Convatec Group PLC  14 November 2024

14 November 2024

 

Convatec responds to Local Coverage Determinations (LCDs) on skin substitutes
in the United States

 

 

Convatec notes the Medicare Administrative Contractors (MACs) publication of
the LCDs for Skin Substitute Grafts/Cellular and Tissue-Based Products for the
Treatment of Diabetic Foot Ulcers (DFU) and Venous Leg Ulcers (VLU), with a
stated effective date of 12 February 2025.

 

InnovaMatrix(®) is not covered by Medicare for DFU/VLU treatments in the
LCDs, reducing patient and practitioner choice and availability of effective
solutions in the near-term. This is disappointing, but as expected.

 

InnovaMatrix(®) is an excellent product which is delivering strong real-world
results for patients and is trusted by clinicians. Convatec remains confident
of securing DFU/VLU coverage and as such, we expect any exclusion from the
LCDs to be temporary. We will continue to serve patients with other
indications, which comprise ~55%(1) of the US wound biologics segment and
c.25% of Convatec's InnovaMatrix(®) FY24 sales.

 

Convatec also welcomes the MACs' commentary regarding an efficient
reconsideration process for products to be covered by Medicare in the future.
Convatec remains confident of securing coverage. We continue to build our
clinical evidence portfolio in DFU/VLU including through real-world evidence
and have already initiated randomised controlled trials
(https://www.convatecgroup.com/media/press-releases/2024/Convatec_update_on_InnovaMatrix_AC_clinical_data_second_randomised_controlled_trial_authorised/)
which we expect to report in 2026.

 

The FY24 guidance and FY25 outlook issued in our 12 November 2024 trading
statement
(https://www.convatecgroup.com/siteassets/investors/convatec-trading-update-nov-2024-final.pdf?e=hxJRXt)
remain unchanged.

 

For FY24 we expect Group organic revenue growth in the range of 7.25-8.0%, and
operating margin of at least 21.5% in constant currency. We are on-track to
deliver double-digit growth in adjusted EPS and free cash flow to equity.

 

In FY25, we continue 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 5-7% organic growth in
non-InnovaMatrix(®) sales (96% of Group) based on our broadening product
portfolio and new product launches, and further progress in Group-wide
productivity initiatives and focused commercial execution.

 

 

Contacts

 Analysts                            David Phillips, VP, Investor Relations & Treasury      +44 (0) 7909 324994

& Investors

                                     Sheebani Chothani, Director, Investor Relations        +44 (0) 7805 011046

                                                                                            ir@convatec.com (mailto:ir@convatec.com)

 Media                               Buchanan: Charles Ryland / Chris Lane                  +44 (0)207 466 5000

                                                                                            mediarelations@convatec.com

 

 

About Convatec

Pioneering trusted medical solutions to improve the lives we touch: Convatec
is a global medical products and technologies company, focused on solutions
for the management of chronic conditions, with leading positions in advanced
wound care, ostomy care, continence care, and infusion care. With around
10,000 colleagues, we provide our products and services in almost 100
countries, united by a promise to be forever caring. Our solutions provide a
range of benefits, from infection prevention and protection of at-risk skin,
to improved patient outcomes and reduced care costs. Convatec revenues in 2023
were over $2 billion. The company is a constituent of the FTSE 100 Index
(LSE:CTEC).

To learn more about Convatec, please visit http://www.convatecgroup.com
(http://www.convatecgroup.com)

 

(1) SmartTRAK data and Convatec estimate

Forward Looking Statements

This document includes certain forward-looking statements with respect to the
operations, performance and financial condition of the Group.
Forward-looking statements are generally identified by the use of terms such
as "believes", "estimates", "aims", "anticipates", "expects", "intends",
"plans", "predicts", "may", "will", "could", "targets", continues", or their
negatives or other similar expressions. These forward-looking statements
include all matters that are not historical facts.

Forward-looking statements are necessarily based upon a number of estimates
and assumptions that, while considered reasonable by the Company, are
inherently subject to significant business, economic and competitive
uncertainties and contingencies that are difficult to predict and many of
which are outside the Group's control. As such, no assurance can be given that
such future results, including guidance provided by the Group, will be
achieved. Forward-looking statements are not guarantees of future performance
and such uncertainties and contingencies, including the factors set out in the
"Principal Risks" section of the Strategic Report in our Annual Report and
Accounts, could cause the actual results of operations, financial condition
and liquidity, and the development of the industry in which the Group
operates, to differ materially from the position expressed or implied in the
forward-looking statements set out in this document. Past performance of the
Group cannot be relied on as a guide to future performance.

Forward-looking statements are based only on knowledge and information
available to the Group at the date of preparation of this document and speak
only as at the date of this document. The Group and its directors, officers,
employees, agents, affiliates and advisers expressly disclaim any obligations
to update any forward-looking statements (except to the extent required by
applicable law or regulation).

 

LEI number - 213800LS272L4FIDOH92.

 

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