Zoll Medical’s (NSDQ:ZOLL) LifeVest, the only wearable cardiac defibrillator on the market in the U.S., landed a vital win from the Centers for Medicare & Medicaid Services today, shooting the company’s stock up more than 30% on Wall Street.
Share prices regained the value lost in August, when CMS announced that it was considering limiting reimbursement for Zoll’s LifeVest wearable defibrillator, Zoll’s first reimbursed product.
Shares hit $61 in mid-morning trading today, a 30 percent spike from yesterday’s $46.83 close. Shares were trading at $60.93 before LifeVest’s reimbursement came under question.
"After their thorough review of all available research and literature, the medical directors’ decision reaffirms the wisdom of the current, original Medicare policy initiated in 2005 that wearable defibrillators are medically necessary to protect patients at risk of sudden cardiac death during ICD waiting periods," CEO Richard Packer said in prepared remarks.
The company noted that CMS’ Durable Medical Equipment Medical Administrative Contractors received letters from the Heart Rhythm Society, American College of Cardiology, American Heart Assn., American Assn. of Heart Failure Nurses, Sudden Cardiac Arrest Assn., Sudden Cardiac Arrest Foundation and over 50 physicians in support of maintaining reimbursement levels for LifeVest.
Zoll pulled in some $111 million in 2011 in rental revenues from the LifeVest in 2011, a 57 percent jump compared to $70.7 million for 2010. The device is prescribed by doctors for patients who lease the product, typically for between two to three months, according to regulatory filings. The patients are generally covered by health care plans.
The Chelmsford, Mass.-based resuscitation devices maker logged record earnings of $31.3 million in its fourth-quarter earnings, 65 percent over 2010 profits of $19 million. Earnings per share jumped 60 percent from last year’s 87 cents to $1.39 for 2011.