LivaNova risk/reward favorable into final Medicare decision, says Piper Jaffray

Piper Jaffray analyst Matt O’Brien is previewing LivaNova’s Medicare final decision on the coverage of Vagus Nerve Stimulation for treatment-resistant depression expected by end of next week. The key swing factor will be the response versus remission endpoint, O’Brien tells investors in a research note. The analyst believes that with little in shares for depression, if Centers for Medicare and Medicaid Services agrees to a response endpoint, shares of LivaNova “will lift significantly, as previous data has shown VNS delivers this result quickly.” If the final decision includes a remission endpoint, O’Brien anticipates disappointment and “potentially another modest move lower for shares.” However, in order to demonstrate statistical significance, the size of the trial will need to be quite large and could provide significant, high-margin revenue for LivaNova, he adds. For holders of the stock, he believes the risk/reward is favorable. For investors looking at the name, the analyst reiterates an Overweight rating on LivaNova “either way after the final decision is released.”

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