LivaNova Calls Sleep Apnea Market Slowdown 'Temporary' As It Plans A Limited 2027 Launch
LivaNova's CFO blames coding and reimbursement confusion for slower growth in nerve-stimulation sleep apnea therapy, and raised 2026 guidance to 9% to 10%.
LivaNova's chief financial officer, Alex Shvartsburg, said on the company's third-quarter earnings call Wednesday that the slowdown in sleep apnea nerve-stimulation market growth is "a temporary phenomenon driven largely by the confusion around coding and reimbursement." The medical-device maker also raised its 2026 revenue growth guidance to 9% to 10% from 8% to 9%.
A slowdown the CFO expects to pass
Shvartsburg told analysts the issue "will work itself out by the time we're out in the marketplace." He added that the market has historically grown at a double-digit rate.
CEO Vladimir Makatsaria acknowledged "challenges and reimbursement uncertainty in the HGNS market" in the near term. HGNS is hypoglossal nerve stimulation. He pointed to new category one codes from the American Medical Association, expected to take effect January 1, 2028 subject to finalization, as positive news. LivaNova's Osprey randomized trial supplied the level one evidence behind the application.
Makatsaria said up to 1 million patients stop CPAP therapy each year, and that HGNS penetration within that group stays below 5%.
Limited launch first, spending later
Chief Innovation Officer Ahmet Tezel said the real increase in commercial investment starts in 2028, while the company still plans a limited launch in 2027. LivaNova is confident in its timeline for submitting a premarket approval supplement for its next-generation device and will update investors once it files, Tezel said. CFO Shvartsburg said the company has adequate capacity for the launch and to scale the business.
The company says it has no contraindication for patients with complete concentric collapse, which Makatsaria said enlarges the addressable market. Tezel put that group at about 25% of patients and cited a cumulative 85% responder rate with the company's Polysync algorithm, up from 65%.
The core business behind the bet
LivaNova makes heart-lung machines and oxygenators for heart surgery, and the VNS Therapy implant for drug-resistant epilepsy. Third-quarter revenue was $393 million, up 10%. Adjusted earnings per share were $1.23, against $1.11 a year earlier.
Cardiopulmonary revenue rose 11% to $225 million, and epilepsy revenue rose 11%. Full-year adjusted earnings per share guidance now stands at $4.40 to $4.50, up 10 cents at the midpoint. Adjusted free cash flow guidance is unchanged at $140 million to $160 million.
Cash was $563 million at September 30, and total debt was $299 million after an early $98 million repayment of term facilities.
Management put adjusted operating margin for 2026 at 20% to 21% and said it is not ready to guide on 2027.
Sources
- LivaNova Shares Rise After Growth Projections Lift — MarketWatch
- LivaNova (LIVN) Surpasses Q3 Earnings and Revenue Estimates — Yahoo Finance
- LivaNova: Q3 Earnings Snapshot – WTOP News — wtop.com
- LivaNova Reports Third-Quarter 2026 Results; Raises Full-Year 2026 Revenue and Adjusted Diluted EPS Guidance – Company Announcement - FT.com — Financial Times
- LivaNova: Q3 Earnings Snapshot | kare11.com — Associated Press
