LivaNova (LIVN) Goldman Sachs 45th Annual Global Healthcare Conference summary

Strategic framework and clinical trial updates

• Strategy centers on maximizing core businesses (cardiopulmonary and epilepsy), advancing two key innovations (DTD and OSA), and exploring future growth areas with high unmet clinical need and market potential.

• RECOVER trial for DTD did not meet its primary endpoint, though the treatment group performed as expected; control group outperformed forecasts, narrowing statistical significance.

• Some secondary endpoints in RECOVER showed clinically meaningful benefits; internal and external analyses are ongoing, with a program update expected at the Q2 earnings call in July.

• OSPREY trial for OSA was stopped early due to high probability of meeting its primary endpoint; primary data expected by year-end, with FDA submission and potential approval in 2025.

• OSA trial uniquely includes patients with complete concentric collapse, representing about 25% of OSA patients, offering a differentiated commercial opportunity.

Core business performance and growth drivers

• Epilepsy and cardiopulmonary businesses have sustained double-digit growth, driven by market penetration, pricing, replacements, and new patient implants.

• Epilepsy market remains underpenetrated (<5%), with growth supported by increased procedure adoption and innovation in connectivity and software.

• Cardiopulmonary growth is fueled by upgrades to the Essenz heart-lung machine, service excellence, and market share gains in disposables.

• Manufacturing and supply chain improvements are increasing oxygenator capacity by over 10% this year, with further network changes planned for scalability.

• Near-term growth is supported by industry supply disruptions, enabling share gains, though a slowdown is expected in Q4 due to Essenz launch phasing.

Financial outlook, investment strategy, and innovation

• Guidance anticipates a slowdown in growth rate later in the year, partly due to tough comps and Essenz launch timing, but core business momentum remains strong.

• Margin expansion of 300 basis points is targeted, driven by top-line growth, SG&A and R&D leverage, and gross margin improvements from pricing.

• Investment strategy is shifting from "moonshot" clinical trials toward reinforcing core business sustainability and targeted innovation.

• New Chief Innovation Officer and additional hires are expected to enhance innovation capabilities and drive long-term success.

• The combination of core businesses provides scale and commercial leverage, especially internationally, with future integration opportunities dependent on R&D synergies.