Avanos Medical Stock

Avanos Medical, Inc. operates as a medical technology company. The company is focused on delivering clinically superior medical device solutions that help patients get back to the things that matter.

The company develops, manufactures, and markets its recognized brands globally and hold leading market positions in multiple categories across the company’s portfolio.

The company conducts its business in one operating and reportable segment that provides the company’s medical device products to healthcare providers and patients. The company has manufacturing facilities in the United States and Mexico. Within the company’s single reportable segment, the company provides a portfolio of innovative product offerings focused on Digestive Health and Pain Management and Recovery to improve patient outcomes and reduce the cost of care.

Digestive Health is a portfolio of products that includes the company’s MIC-KEY enteral feeding tubes, Corpak patient feeding solutions and NeoMed neonatal and pediatric feeding solutions. In the year ended December 31, 2023, the company’s legacy enteral feeding tubes, which includes the company’s MIC-KEY enteral feeding tubes, the company’s Corpak feeding solutions and the company’s NeoMed neonatal and pediatric feeding solutions each accounted for more than 10% of the company’s consolidated net sales.

Pain Management and Recovery is a portfolio of non-opioid pain solutions, including:

Surgical pain and recovery products, such as ON-Q and ambIT surgical pain pumps and Game Ready cold and compression therapy systems. In the year ended December 31, 2023, the company’s ON-Q surgical pain pump individually accounted for more than 10% of the company’s consolidated net sales.

Interventional pain solutions, which provide minimally invasive pain relieving therapies, such as the company’s COOLIEF pain therapy, OrthogenRx’s knee osteoarthritis hyaluronic acid (‘HA’) pain relief injection products and Trident radiofrequency ablation (‘RFA’) products used to treat chronic pain conditions. In the year ended December 31, 2023, products associated with the company’s COOLIEF pain therapy accounted for more than 10% of the company’s consolidated net sales.

Acquisitions

On July 24, 2023, the company closed the acquisition of Diros Technology Inc. (‘Diros’), a leading manufacturer of innovative radiofrequency (RF) products used to treat chronic pain conditions.

Divestitures

On October 2, 2023, the company closed the sale of the company’s Respiratory Health (‘RH’) business.

Sales and Marketing

The company directs its primary sales and marketing efforts toward hospitals, ambulatory care centers, and other sites of care. The company engages with physicians and other healthcare providers to highlight the unique benefits and competitive differentiation of the company’s branded products. The company works directly with physicians, nurses, professional societies, hospital administrators and healthcare group purchasing organizations (‘GPOs’) to collaborate and educate on emerging practices and clinical techniques. These marketing programs are delivered directly to healthcare providers. Additionally, the company provides marketing programs to its strategic distribution partners throughout the world.

Distribution

While the company’s products are generally marketed directly to hospitals and other healthcare providers, they are generally sold through third-party wholesale distributors, with some sales directly to healthcare facilities and other end-user customers. In 2023, approximately 43% of the company’s net sales in North America were made through distributors. In the year ended December 31, 2023, sales to Medline Industries, McKesson Corporation, and Owens & Minor, Inc. accounted for approximately 15%, 13%, and 6% of consolidated net sales, respectively.

Outside North America, sales are made either directly to end-user customers or through distributors, depending on the market served. In 2023, approximately 71% of the company’s net sales outside North America were made through wholesalers or distributors.

The company utilizes distribution centers in North America, Europe, Australia and Japan.

Group Purchasing Organizations

The company’s agreements with GPOs enables the company to sell its products to their members, whether sold directly by the company or through independent wholesale distributors. Approximately 28% of the company’s 2023 global net sales, including sales to wholesale distributors, were contracted through GPOs.

Research and Development

The company incurred research and development costs of $27.2 million in 2023.

Intellectual Property

The company holds numerous patents and has numerous patent applications pending in the United States and other countries that relate to the technology used in many of the company’s products. The company utilizes patents in its Pain Management and Recovery and Digestive Health products. These patents generally expire between 2024 and 2042.

Regulatory Matters

The company’s operations are affected by trade regulations in many countries that limit the import of raw materials and finished products and by laws and regulations that seek to prevent corruption and bribery in the marketplace (including the U.S. Foreign Corrupt Practices Act and the United Kingdom Bribery Act, which provide guidance on corporate interactions with government officials) and require safeguards for the protection of personal data. In addition, the company is subject to laws and regulations pertaining to healthcare fraud and abuse, including state and federal anti-kickback and false claims laws in the United States.

In the United States, before the company can market a new medical product, or market a new use for, claim for or significant modification to an existing product, the company generally must first receive clearance under Section 510(k) of the Food, Drug and Cosmetic Act (‘510(k) clearance’) from the United States Food and Drug Administration (‘FDA’).

History

The company was incorporated in 2014 in Delaware. It was formerly known as Halyard Health, Inc. and changed its name to Avanos Medical, Inc. in 2018.