AOTI shares soared on Friday after announcing what it calls a transformational milestone for its diabetic ulcer topical oxygen therapy.
The US Centers for Medicare & Medicaid Services issued a proposed coverage determination affirming that topical oxygen therapy is reasonable and necessary for treating diabetic foot ulcers that have failed to heal after four weeks of optimised care.
This opens up the massive US market, and shares reacted accordingly with a 30% increase on Friday.
The proposed Local Coverage Determination, applicable across the whole of the US, will be finalised within a year following a 45-day public comment period.
Once final, it will mandate Medicare coverage and reimbursement for the group’s Topical Wound Oxygen (TWO2) therapy, opening access to around 69 million Medicare enrollees.
AOTI is already the clear leader in topical oxygen with a 75% market share, and its TWO2 system is the only intermittent topical oxygen wound therapy on the market, backed by peer-reviewed studies showing superior durable healing outcomes versus continuous therapy and other advanced wound care treatments.
The AIM-listed group said the determination will also accelerate broader coverage across Medicaid and commercial market segments. Its existing infrastructure spans 26 states covering around 86% of the US population, allowing it to capitalise immediately without significant ramp-up of sales operations.
Dr. Mike Griffiths, Chief Executive Officer & President of AOTI, said: “This positive CMS decision is a significant milestone in our market access and growth strategy, reflecting CMS’s recognition of the role of topical oxygen therapy in effectively treating diabetic foot ulcers. AOTI’s standalone intermittent topical oxygen therapy, TWO2®, is differentiated by the most compelling RCT, real-world evidence and a value proposition that uniquely demonstrates improved long-term outcomes and resultant cost savings.”