Summary: Vivos Therapeutics, which markets oral appliances for OSA, has expanded its strategic alliance with Rebis Health after early success with a revenue-sharing model that integrates Vivos-trained dental providers into Rebis sleep centers; with plans to scale nationwide, Vivos aims to improve profitability, expand acquisitions, and position its CARE treatment as a viable CPAP alternative.
Key Takeaways:
- In June 2024, Vivos partnered with Rebis Health in a revenue-sharing model where Vivos-trained dental providers offer services at Rebis sleep centers. This alliance is expanding to two new locations in Denver, with plans for further growth.
- Vivos is exploring partnerships or acquisitions among 2,500+ accredited sleep medicine centers in major U.S. cities.
- CEO Kirk Huntsman calls this a “critical inflection point” for both Vivos and OSA treatment overall.
Vivos Therapeutics Inc, marketer of the US Food and Drug Administration (FDA)-cleared Vivos CARE treatment for obstructive sleep apnea (OSA), is emboldened by early success with one sleep center partnership and shares its big ambitions to reach as many OSA patients as possible. Vivos is known for having the first oral appliance FDA cleared for severe OSA, as well as for having oral appliances FDA cleared for children as young as 6-years-old.
In June 2024, Vivos and sleep center operator Rebis Health Holdings launched a revenue-sharing model. Vivos provides Rebis Health access to licensed dental professionals trained in providing certain dental services to provide these services in designated practice locations, and Rebis gets a percentage of patient payments collected by the Vivos’ dental providers (minus fees).
That strategic marketing and distribution alliance is now expanding with the addition of two more Rebis Health facilities in the greater Denver market.
Early Success of Vivos-Rebis Health Alliance
Data gathered by Vivos and Rebis Health over the initial months of their strategic alliance shows an overall Vivos treatment case acceptance rate of 64%.
During the initial months of the alliance, existing Rebis Health OSA patients, some of whom had previously tried CPAP and indicated they were either dissatisfied or had ceased CPAP use, and other newly diagnosed OSA patients, were approached and educated about their OSA treatment options, including Vivos CARE.
Rebis Health has over 90,000 legacy OSA patients and currently sees approximately 1,200 people with suspected OSA each month. After months of preparation and training during the second half of 2024, and with less than 400 patient interactions, Rebis Health medical providers are now educating substantially all their OSA patients on Vivos treatment as an alternative to CPAP.
According to Vivos, Vivos CARE treatment offers several key advantages over CPAP. Studies have shown that Vivos CARE devices have the ability to rehabilitate and enhance airway functionality, with initial therapeutic benefits often achieved relatively quickly (in days or weeks) and final clinical results typically achieved in as little as 12 months. Vivos CARE treatment has been shown to reduce or even eliminate OSA symptoms as measured by the apnea-hypopnea Index (AHI), targeting and correcting the structural issues behind the OSA.
After completing their Vivos CARE treatment, many patients may not require further intervention, though individual experiences can vary, and long-term results may differ. Of the nearly 60,000 patients treated since 2010, fewer than approximately 0.1% have required retreatment, according to Vivos.
Average per case revenue is over $4,700. While results are still early and overall revenue growth is expected to ramp over time starting in 2025, Vivos gross margins per patient prior to a profit split with Rebis are in the 70% range, with overall profit potential to Vivos per case of up to four times greater than what Vivos experienced in its prior distribution model.
Vivos believes it can further improve net profitability per case significantly in this new model going forward as it creates additional affiliations and pursues acquisition opportunities across the country with better economics.
“We’ve worked diligently over the first months of our alliance with Rebis Health to refine and optimize it as well as gain further validation of the exciting potential for Vivos as we roll out this new model on a national scale,” says Kirk Huntsman, chairman and CEO of Vivos, in a release. “The realization of these initial two key milestones regarding patient preferences and improved economics for Vivos is validating of our efforts to date and made our decision to expand from our initial location with Rebis into two additional locations in the greater Denver area a no-brainer. Our achievements with Rebis have been in line with our expectations, and we see a lot of room for further improvement in terms of revenue growth and margin expansion as patients continue to accept Vivos treatment options.”
The new Colorado locations for the strategic alliance are located in Highlands Ranch and Westminster, both suburbs of Denver. Both locations are expected to be fully staffed and operational by April. Eventually, Vivos and Rebis Health aim to have locations and providers serving all of Colorado.
Sleep Center Alliances/Acquisition Exploration
Vivos is also currently exploring alliances or acquisitions of some of the more than 2,500 accredited sleep medicine and testing groups in major United States cities. If these materialize, they are expected to accelerate and enhance Vivos’ top-line revenue growth while significantly lowering or ending Vivos’ current cash burn and generating cash flow-positive operations in the future.
The company is going to “accelerate our exploration of additional strategic alliances or outright acquisitions of sleep centers through which we can market our products and services,” Huntsman says. “We view this new business model as a critical inflection point in the history of Vivos and for OSA treatment overall. No longer will patients just blindly accept CPAP as their life sentence for being diagnosed with OSA. Patients now know they have real choices and very good alternatives.”
