Convatec slides as CMS proposes to cut 'spending waste' on skin-substitute products

(Sharecast News) - Convatec shares fell sharply on Tuesday after the Centers for Medicare & Medicaid Services in the US suggested in a draft payment proposal to cut "spending waste" on skin-substitute products, citing "abusive pricing practices". Convatec said in a statement that it supports the CMS in seeking to remove excess cost and promote responsible market practices.

However, it also said the proposed reimbursement rate risks limiting patient choice, product quality and availability in the segment.

The company said it will "engage fully" in the public comment process, which closes on 12 September 2025. It does not expect any changes before 2026 at the earliest.

The company said that InnovaMatrix, its porcine placental-derived extra-cellular matrix for treatment of chronic, surgical and trauma wounds, represented around 3% of group revenue in the four months to April 2025. Its guidance is for revenue of at least $75m in FY25.

"While the outcome of this process remains uncertain, if the proposal is implemented in its current form the potential year-on-year headwind to FY26 revenue could be approximately 1-2% of group revenue," it said.

At 1050 BST, the shares were down 4.9% at 246.20p.