PolyNovo shares surged nearly 20 per cent after the company announced it is well-positioned to capitalise on proposed changes to US Medicare reimbursement policies for outpatient wound care. The ASX-listed company exited a trading halt to share the news with investors, triggering a strong market response.
Currently, physicians are reimbursed a percentage of the cost of skin substitutes, which favours more expensive products. The Centres for Medicare & Medicaid Services (CMS) is proposing a flat reimbursement rate of $US806 per square inch. This shift is projected to slash spending on these products by approximately 90 per cent.
PolyNovo, acting through chief executive Dr Robyn Elliott, stated that outpatient product application represents a significant potential growth area for the company’s products, especially with the CMS changes. PolyNovo is currently assessing the optimal commercial model for accessing this market opportunity. PolyNovo is a medical device company that develops, manufactures, and sells dermal regeneration solutions using its patented NovoSorb biodegradable polymer technology. Its products are used in a range of surgical applications, including burns, reconstructive surgery, and hernia repair.
The company aims to leverage its technology to assist American servicemen and women, veterans, and individuals suffering from chronic wounds, often complicated by diabetes. The CMS proposal is currently under consultation, with a final decision expected in November and a planned implementation date of January 1, 2026. Shares in PolyNovo rallied 18.6 per cent in the initial minutes of trading following the announcement.
