Advanced Medical Solutions Group has recently issued a warning regarding its financial performance for 2023. The company expects to be affected by the uncertainty surrounding its royalty stream and the higher destocking of its LiquiBand product in the U.S.
Revised Revenue Expectations
According to the U.K. surgical and wound-care specialist, it now anticipates revenue for the year to fall within the range of £124 million to £127 million ($156.1 million to $159.9 million). Furthermore, adjusted pretax profit is expected to be between £25 million and £27 million.
Impact of U.S. Reimbursement Changes
The company explained that Organogenesis, their partner in a patent-licensing agreement, recently announced changes to U.S. reimbursement coverage for the treatment of diabetic foot ulcers and venous leg ulcers. These changes have created uncertainty regarding the revenue outlook for several key products that utilize AMS patents.
Uncertainty and Lack of Control
Due to Organogenesis withdrawing their guidance and the lack of control or insight into their sales, Advanced Medical Solutions Group is unable to quantify the financial impact on AMS at this stage. As a precautionary measure, the company has decided to remove this royalty entirely from fourth quarter guidance onwards.
Confidence in Future Guidance
Despite this setback, the company expressed confidence in its future prospects. Apart from the adjustment to the Organogenesis royalty, their guidance for future years remains unchanged.
