Summary: Vivos Therapeutics reported milestones in its second quarter, including securing Medicare reimbursement approval for its CARE oral appliances, launching a new marketing and distribution strategy, and closing a $7.5 million equity growth investment. Additionally, Vivos announced positive results from a multi-site marketing pilot and that over 45,000 patients have been treated with Vivos OSA appliances.
Key Takeaways:
- Medicare Reimbursement Approval: Vivos received regulatory approvals in April for Medicare reimbursement of its CARE oral devices.
- Strategic Marketing and Distribution Model: Vivos launched a new marketing and distribution strategy in June through a strategic alliance in Colorado, marking a shift in how the company plans to expand access to its OSA treatment solutions.
- Growth and Investment: Vivos secured a $7.5 million equity investment in June, bolstering its financial position to support new strategic alliances and reported treating over 45,000 patients by the end of Q2 2024.
Vivos Therapeutics Inc, a maker of oral appliances for obstructive sleep apnea (OSA), reported second-quarter financial results and operating highlights, which included Medicare reimbursement approval and a new marketing and distribution model for its OSA appliances.
Medicare Reimbursement Approval
In April, Vivos received all required regulatory approvals to enable Medicare reimbursement for its CARE oral devices. This allows Medicare beneficiaries coverage and reimbursement for allowable charges billable to Medicare.
The Vivos Method is estimated to be indicated and potentially effective (within the scope of the FDA-cleared uses) in approximately 80% of cases of OSA where patients are compliant with clinical treatments;
New Marketing and Distribution Model
In June, Vivos announced a strategic marketing and distribution alliance with an operator of multiple sleep testing and treatment centers in Colorado. Vivos began to see patients from this operator in late July, and the fourth quarter will be the first full quarter of operations from this new relationship.
This alliance, which Vivos hopes will be the first of a series of similar alliances across the country, marks a pivot in Vivos’ marketing and distribution model for its OSA appliances.
“This model is designed to better align our interests with referring medical professionals, dentists, and sleep treatment providers. We expect this model will substantially expand the number of OSA patients who have access to our full scope of evidence-based products and methods, make our revenue less reliant on VIP enrollments, and build on the other revenue initiatives we’ve been implementing over the past several quarters,” says Kirk Huntsman, Vivos’ chairman and CEO, in a release.
Equity Growth Investment
Also in June, Vivos announced the related closing of a $7.5 million equity growth investment from an affiliate of New Seneca Partners Inc, a North American private equity sponsor based in Southfield, Mich.
This investment materially bolsters Vivos’ cash on hand and stockholders’ equity and will facilitate the launch of the new strategic alliance and potentially other similar alliances, which, according to the company, is expected to positively impact Vivos’ revenue growth.
“As we continue to move more directly and vertically into affiliations and collaborations with medical specialists, functional medicine doctors, and other sleep-related healthcare practitioners, we expect this to positively impact our new case starts, revenue growth, and gross profit, while reducing our customer acquisition and related overhead costs,” says Huntsman in a release.
Marketing Pilot Yields Positive Results
Later in June, Vivos announced positive results from a seven-month, multi-site marketing pilot testing the core assumptions behind Vivos’ new affiliation and medical sleep specialist marketing and distribution model.
The results revealed that 79% (60 out of 76) newly diagnosed adult OSA patients chose Vivos’ oral appliance therapy over either continuous positive airway pressure (CPAP) machines or choosing to do nothing, while 5% (4 out of 76) of patients declined all treatment options, and 16% (12 out of 76) patients chose to investigate CPAP as an option before making a final decision. No patients in the pilot program opted for surgical or neurostimulation implant options.
Growth in Patient Treatment and Revenue
As of June 30, patients treated with Vivos’ oral appliances totaled over 45,000 worldwide, compared to approximately 40,000 as of the second quarter of 2023. Vivos has now trained more than 2,000 dentists in the use of The Vivos Method and Vivos’ related value-added services, compared to over 1,800 as of the second quarter 2023.
Revenue was $4.1 million for the second quarter of 2024 and $7.5 million for the six months ended June 30, 2024, compared to $3.4 million and $7.3 million for the three and six months ended June 30, 2023, respectively.
Vivos says this was mainly due to increased product revenue from higher sales and lower discounts of Vivos appliances, coupled with higher service revenue, reflecting an increase in Vivos Integrated Provider (VIP) enrollment revenue, partially offset by lower Myofunctional therapy revenues.
Photo caption: Vivos mrna oral appliance
File photo
