Zoll Medical Corp.’s (NSDQ:ZOLL) LifeVest, the only wearable cardiac defibrillator on the market in the U.S., won a favorable policy decision from North Carolina’s Medicaid office.
The decision makes LifeVest reimbursable by North Carolina Medicaid for ischemic and non-ischemic patients who are at risk of sudden cardiac death and who aren’t good candidates for implanted devices.
The news sent ZOLL shares up 8 percent to $39.01 Friday, settling down to close at $36.65, a 5 percent increase from Thursday’s close at $34.77.
Shares held steady at $36.68 in mid-morning trading today.
The bump doesn’t do much to make up for the 27 percent slide in stock price when news broke in August that LiveVest might get reduced Medicare reimbursement.
Zoll’s shares dropped hard and fast to close at $44.46 on August 8, a 27 percent drop from its close at $60.93 the day before. The company had set its high-water mark just a week earlier, opening at $70.82 on August 1 with investors buoyed a strong third quarter earnings report.
Zoll CEO Richard Packer tried to put the issue in context by telling a group of analysts in September that a change in LifeVest reimbursement would only amount to an 8 percent change in Zoll’s revenues.
"There is an overhang to our story" Packer said. "The LifeVest represents 20 percent of Zoll and [the proposed change in] policy would effect 40 percent of LifeVest, or 8 percent of Zoll’s revenues." He warned that limiting physicians’ access to the LifeVest would eliminate "the only tool cardiologists have to maintain ICD implants within guidelines."
LifeVest raked in $30 million for the Chelmsford, Mass.-based company in its third quarter ended July 3, 2011. Fourth quarter earnings haven’t yet been released.
