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Is LivaNova Back on Track After Heart Valve Divestiture?

Image courtesy of Kristoffer Tripplaar / Alamy Stock Photo IMG_2022-2-23-131937.jpg
The London-based company had significant growth in its neuromodulation and cardiopulmonary segments.

Headwinds caused by COVID-19 were no match for the strength of LivaNova’s Neuromodulation and Cardiopulmonary offerings. These segments helped propel the London-based company into beating Wall Street consensus in 4Q21.

LivaNova pulled out earnings per share of 57 cents compared to Wall Street’s expectation of 52 cents EPS on sales of $267.2 million.

The company reported Cardiopulmonary sales increased 12% vs. 4Q20 with growth across all regions. This growth was primarily driven by oxygenator sales due to an increase in procedure volumes.

Neuromodulation sales increased 11.9% vs. 4Q20. This increase was driven by replacement implants as well as improving market dynamics across all regions.

"Our execution during the fourth quarter delivered results that met or exceeded the high end of full-year guidance," said Damien McDonald, CEO of LivaNova. "Neuromodulation sales grew across all regions benefiting from replacement procedures, and Cardiopulmonary sales improved year over year, driven by oxygenator sales. We maintain our commitment to realize operational efficiencies and maximize cash flow generation as evidenced by exceeding the high end of guidance for adjusted free cash flow. While we enter 2022 with ongoing COVID-related market headwinds, we remain focused on delivering sales and earnings growth, achieving our pipeline milestones, and improving profitability and cash generation."

LivaNova made some huge gains in its neuromodulation segment in 2021. The company won an IDE for the aura6000 system treat obstructive sleep apnea.

For the 4Q21, worldwide sales from continuing operations were $270.1 million, an increase of 0.2% on a reported basis and 1.8% on a constant-currency basis, as compared to the same quarter of the previous year.

LivaNova is fresh off completing the divestiture of its heart valve business to Gyrus Capital for $73 million. The company announced the deal in late 2020 and completed divestiture last year.

The company began moving away from the heart valve business after it an October 2020 letter from active investor PrimeStone Capital. The letter urged LivaNova to refocus its capital on the neuromodulation business, divest its cardiopulmonary business, and either sell or close its heart valves business.

The divestiture made MD+DI’s list of 7 Moments in 2021 Destined to Change the Cardio-Device Industry Forever.




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