@mushroompanda @edgescape you are right to place the opportunity for Symphony in the wider context of the dramatic changes that surfaced last year in dermal repair in the US.
So, this is worth expanding on.
The US “dermal repair” issue is really a Medicare skin-substitute / chronic wound-care reimbursement reset. The old system allowed many skin substitutes to be reimbursed on product-specific economics, which encouraged very high pricing and aggressive usage. CMS says Medicare spending on skin substitutes rose from US$256m in 2019 to over US$10bn in 2024, with some products priced above US$2,000/cm², and attributed much of the growth to abusive pricing and products with limited clinical evidence.
(As an aside, the new 2026 CMS outpatient skin-substitute reimbursement rate is US$127/cm2, and that compares with the public benchmark price for $PNV"s BTM of $8.50/cm2 and US$31.50/cm2 for Integra. This explains why former $PNV Chair David Williams was so enthusiastic about the Medicare changes! An important point to emphasise, is that the "wound-care reimbursement reset" was focused on the outpatient care setting, whereas, products like BTM, Integra's offering, and $ARX's Myriad are predominantly sold today in the inpatient setting, which is covered under different codes and controls.)
For $ARX’s Symphony, FDA 510(k) clearance was granted in July 2020, but FDA clearance only allowed the product to be sold; it did not solve US reimbursement, coding, coverage, physician adoption, or provider economics. $ARX later said Symphony required a unique reimbursement code, and in FY22 it commenced only a limited US commercial launch focused on VA hospitals and clinics while it worked to secure coding, coverage and payment for a full US launch.
That delay now looks more understandable in hindsight. $ARX formally tried to progress Symphony, but the reimbursement environment became unstable. By FY25, the company said it had paused the Symphony launch because fluctuating reimbursement proposals had created uncertainty for providers, who were reluctant to change usage patterns. It also said RCT data was likely to become important from CY2026 for reimbursement in certain wound types, which explains why the diabetic foot ulcer RCT became strategically central rather than merely supportive clinical evidence.
The 2026 CMS change is therefore potentially important for ARX because it resets the market structure Symphony was trying to enter. CMS is moving skin substitutes under the Physician Fee Schedule as "incident-to" supplies, with the stated aim of reducing spending by nearly 90% and incentivising products with stronger evidence. This removes much of the old reimbursement arbitrage that favoured very expensive products and should make the market more rational, more evidence-led, and more sensitive to product cost.
For $ARX, the implication is that Symphony may have gone from being a stalled product in a distorted market to a more credible growth option in a reset market. The upside is that the main external barrier, reimbursement uncertainty, may now be less severe, with high-priced competitors disadvantaged. (Products like Symphony, $PNV's BTM/MTX, and $AVH products are much lower cost/ lower price products than many that were the subject of the system being "rorted".)
If $ARX can pair the new reimbursement environment with the emerging RCT evidence, hospital outpatient access, provider confidence and repeat usage, Symphony could become a meaningful FY27–FY29 growth leg rather than a dormant asset.
The main risk is execution. A lower, flatter reimbursement rate helps remove abusive pricing, but it also forces all products to justify themselves economically. Symphony still needs clinical evidence, coverage confidence, sales execution and adoption by wound-care providers. So the change is only potentially positive for $ARX.
All of this is a very long-winded way of saying, that I agree with @mushroompanda - I view the Symphony opportunity as a potential upside. (And I did not make this clear in my earlier post.) That's why, I really want to understand how compelling the clinical evidence is. While "endpoints" might have been met, is this a "me too" product competing in what is still a reasonably well-served market, or are there real points of clinical differentiation?
At the current SP, I think Myriad momentum is enough to drive short-to-medium term share price progression (a high-growth Myriad rising above a sluggish OviTech/Tela Bio base), particulary now that $ARX is cash generative. But if Symphony can be unleashed in addition, then that could be a gamechanger.
In the short term, the reimbursement changes have certaintly changed the outpatient market dynamics. Distributors now no longer have the incentive to push extremely high-cost products and potentially wasteful practices. Reimbrusement on a square-centimetres-applied-to-the-patient basis, will reduce some of the wastage under the previous regime. But more than an inventory wash-out problem, the issue is that both payers and users are likely to be more cautiouse, and conceivably that could create an execution barrier for Symphony getting adopted.
I think this plays back into my hope that there will some compelling clinical data to help cut through the noise. In any event, Symphony is definitely not a FY26 story, but a possibility to extend momentum from FY27 and beyond. Again, it really helps that $ARX has built a meaningful, direct US salesforce, and I think we will see some of the free cash generate into building this further. A field force of 50-60 really doesn't give a strong direct market presence. For that, they need to build towards something more like 100+, but over time, particularly if the field force will be covering both inpatient and outpatient settings in a given area.
Management at $ARX now have some real options for how they allocate resources into the US market. To date, they have been pretty understated and cautious, and I think that will continue to serve them well. $ARX seems to have a crack at profitable growth - something hard to achieve in the ASX-listed medical devices small-cap space!
As a footnote as I write about this, I am also mindful of the problem that $AVH experienced with the CMS-coding debacle last year, where MACs hadn't priced new CPT codes for ReCell. Of course, that situation was completely different to what I've written about above with the "outpatient reimbursement reset", but it serves to remind us just how important all the steps after FDA approval are for medical devices in the US, including getting the right clinical and economic evidence package, getting remibursement approval (codes) and having these deployed, and then getting local customer adoption via VACs. These are some of the things that entail "execution risk"!
Disc: Held
