Coloplast CFO: Kerecis Wound-Care Business to Recover Growth by 2027
Kerecis Wound-Care Business Faces Setbacks and Plans for Recovery
Aug 18 (Reuters) - Medical equipment maker Coloplast expects its Kerecis wound-care business to return to growth from January 2027 after changes to U.S. Medicare payments caused sales in outpatient settings to fall sharply, its finance chief told Reuters on Tuesday.
Impact of Medicare Payment Changes
The outpatient business, which accounts for around 20%-30% of Kerecis sales, has "basically collapsed" since the reimbursement changes took effect, CFO Anders Lonning-Skovgaard said. Coloplast bought the Icelandic fish-skin wound treatment maker for up to $1.3 billion in 2023 and has since written down 3 billion Danish crowns ($464.46 million) of goodwill linked to the deal.
Outpatient vs. Inpatient Business Segments
The setback has left Coloplast leaning on the much larger segment of Kerecis focused on patients receiving inpatient care to revive a business it bought as a new source of growth in the United States.
That inpatient business, which makes up around 70%-80% of Kerecis sales and was largely untouched by the Medicare changes, is still growing at double-digit rates, Lonning-Skovgaard said.
Strategic Shift Towards Inpatient Care
Coloplast is now redirecting its Kerecis sales organisation towards inpatient care, where the reimbursement changes have had little impact.
"I expect again negative growth in Q4," Lonning-Skovgaard said. "From January 1st, 2027, then you will start to look at positive growth again."
Financial Performance and Outlook
Sales in Coloplast's Biologics business, which includes Kerecis, fell 6% in the third quarter, and the business posted a negative 5% EBIT margin.
The reimbursement overhaul has sharply changed the outlook for Kerecis, which uses fish skin to treat chronic and surgical wounds.
Coloplast this year cut its growth assumptions for the business after the outpatient market deteriorated faster than expected.
Broader Strategic Review
Beyond Kerecis, Coloplast is also reviewing where it invests across the group as it seeks to channel more resources towards the United States.
"There are a few other areas that we are then evaluating because we are not seeing the same level of growth," Lonning-Skovgaard said.
Additional Information
($1 = 6.4599 Danish crowns)
(Reporting by Jesus Calero and Vera Dvorakova in Gdansk; editing by)
