Progress in Breast Health Business and New Product Launches
Management highlighted sequential revenue growth and early signs of recovery in Breast Health, with a focus on interventional sales increasing 31.8%.
The upcoming launch of the Envision system in 2026 is expected to be a significant growth driver, with the current focus on replacing older gantries and expanding the interventional segment.
Revised Financial Outlook and Impact of Portfolio Actions
The company now expects a $6.5 billion increase in 2025 medical costs versus initial estimates, with specific impacts in Medicare ($3.6 billion), commercial ($2.3 billion), and Medicaid.
Approximately $1 billion of previously planned portfolio actions are no longer being pursued, affecting the outlook.
Recognition of $850 million in unfavorable prior period items and one-time settlements, indicating a more challenging financial environment than initially projected.
Recognition of Top-Ranked Rehabilitation Hospitals and Strategic Development Achievements
Eight hospitals recognized among the nation's best by U.S. News & World Report, with Kessler Institute for Rehabilitation ranked #4 for 33rd consecutive year.
Opened new facilities including a 12-bed hospital with UPMC in Pennsylvania, a neuro transitional care unit in Missouri, and expansions in Florida.
Plans to open multiple new hospitals in 2026 and 2027, including partnerships with Banner Health and Cox Health Systems, with a focus on high-demand markets.
XDEMVY's Rapid Market Penetration and Early DTC Impact
The launch remains predominantly an NRx (new prescription) business with minimal refills, yet growth is strong.
The company expects continued growth despite seasonal headwinds, with prescriptions projected to increase into Q3 and beyond.
The success of the DTC campaign is accelerating market penetration faster than typical launches, which usually take multiple quarters to show traction.
Impact of Proposed Medicare Reimbursement Reform on Market Dynamics
CMS announced the WISeR model leveraging AI and machine learning to curb fraud, targeting product categories including skin substitutes, effective January 1, 2026, through 2031.
Proposed 2026 physician fee schedule and OPPS will set a fixed payment of $125.38 per square centimeter for skin substitutes across all outpatient care settings.
Management views these reforms as long-overdue, expecting a more rational market environment that favors product efficacy over price competition.
Company plans to submit comments supporting the new reimbursement methodology and advocating for clarification and potential adjustments, emphasizing confidence in their evidence-backed products.
Dafinchi
