Below the Knee – July 2025 Edition

🚀 Market Movers – July Highlights

It was a volatile month. Reimbursement fears sent shockwaves, but momentum came roaring back in the final stretch. Here's the breakdown:

📉 Early July:

• CMS’s proposed 2026 rule knocked the wind out of the sector.

• Skin substitute stocks cratered as site-of-service and ASP-based reimbursement took a direct hit.

• WoundCareFund closed mid-month down -3.7%, while the Nasdaq and S&P held positive.

📈 Late July:

• The sector rebounded strongly. WoundCareFund closed the month up +1.61%, aided by renewed speculation and a few big winners:

  • Celularity Inc. +43.6%

  • Axogen +13.6%

  • PolyNovo +13.2%

📊 Select Earnings Highlights:

• MiMedx: Record EBITDA ($24M), raised FY guidance

• Convatec: H1 up 6%, EPS ahead of expectations

• Integra: Flat top-line but strong Tissue Technologies traction

• CONMED: Q2 +3.1%, strong surgical and wound platform growth

💡 Innovation Signals – What’s Emerging

📉 Skin Sub Crackdown. CMS proposed bundling skin subs under one flat rate by 2026 — signaling the death knell for ASP-based margins in the office setting.

🧠 WISeR is here. CMS dropped its new pilot to cut “low-value care” using AI + clinical review. Skin substitutes are explicitly targeted. This could rewire reimbursement behavior over the next 6 years.

🧊 Cold plasma heats up. Venture Medical’s €6M bet on Plasmacure brings PLASOMA into the U.S. cold plasma wound care race.

🖨️ 3D printed fat grafts? UToledo Health goes futuristic with patient-derived constructs via Tides Medical.

💊 Sanara MedTech launched a VBC wound pilot spanning 6 states using its CoPilot platform. Think in-home, evidence-driven care aimed squarely at payers.

🦶 Arthrex moves quietly. The stealth acquisition of Vomaris brings Procellera bioelectric dressings into the surgical and ortho channel.

🔬 AI + ML in wound healing. New data in Cureus shows machine learning models outperform traditional risk scores in predicting wound healing and limb salvage after revascularization.

🧪 Diagnostics capital stack grows. MolecuLight raised $27.5M. Expect thermal + bacterial + AI triad next - but it might NOT come from Moleculight…

👀 Wound Care Watchdogs – Regulation, Hype, and M&A

⚖️ 2026 Fee Schedule Shake-Up:
CMS proposes phasing out separate reimbursement for skin subs and shifting to an “incident-to” bundled model. The office setting takes the biggest hit. Expect ripple effects in GTM strategies, product choice, and valuation models.

🏛️ CMS 2026 Physician Fee Schedule – Skin Substitute Shakeup

CMS has proposed major reimbursement changes for skin substitutes in its 2026 Physician Fee Schedule draft:

What’s changing:

• End of ASP-based reimbursement: Skin substitutes will no longer be paid separately.

• Bundled payment model: Reimbursement will shift to a flat-rate “incident-to” supply bundled with the procedure.

• Applies in both HOPD and physician office settings.

• Segmentation by regulatory path (e.g., 510(k) vs. HCT/P) may drive tiered pricing or eligibility.

Why now?

• Medicare Part B spend on skin subs ballooned from $252M in 2019 to $10B+ in 2024 — driven largely by pricing, not volume.

• CMS sees this as unsustainable and vulnerable to fraud and abuse.

Potential impact:

• Margin compression: Especially for premium-priced amniotics and newer biologics.

• Site-of-service shift: Hospital-based providers may gain an edge vs. office settings.

• Strategic reset: Companies reliant on ASP pricing must rethink GTM, pricing, and clinical support models.

• Market consolidation: Low-evidence or poorly differentiated products could be pushed out.

📉 Bottom line: This is the most disruptive policy change in years for the skin sub segment — and the countdown to 2026 has already started.

📊 Poll Watch: What’s Overhyped in Wound Care?

In July, we ran a LinkedIn poll asking a simple question:
Which wound care segment is getting way too much attention for what it actually delivers?

Nearly 3,000 of you weighed in. The results? Brutal — and revealing.

🥇 “Biologic Everything” dominated with 49% of the vote.
Clinicians and execs alike are signaling fatigue with overpromised, under-evidenced biologics — especially in the context of CMS’s reimbursement crackdown. Flashy collagen doesn’t cut it anymore.

📱 AI-Powered Apps took 20%, as users questioned whether most platforms are solving real clinical problems or just building dashboards for dashboards' sake.

🩹 Smart Dressings grabbed 21%, showing skepticism around sensor-laden bandages still searching for a scalable use case.

💨 Single-use NPWT was the least overhyped at 10%, possibly benefiting from clearer value props and steady procedural volume.

Takeaway: The market is calling BS where it sees it. In a tightening reimbursement and capital environment, evidence > excitement. The innovation bar is rising.

💰 M&A Watch: The Engine Is Running Hot

After a few quiet quarters, M&A in wound care and limb salvage is officially back — and H1 2025 delivered a clear message: capital is in motion, and strategic buyers are circling.

🔎 Notable H1 Activity:

• Arthrex quietly acquired Vomaris Innovations, planting a flag in bioelectric dressings and signaling expansion into surgical, trauma, and foot & ankle care.

• Venture Medical snapped up ProgenaCare’s keratin-based wound care assets.

• Tiger Wound Care acquired NOVO Health’s HealPACK surgical wound platform.

• Mölnlycke Health Care made aggressive moves:

  • €115M investment in U.S. dressing manufacturing

  • €400M in new financing

  • Strategic stake in Siren, maker of diabetic sensor socks

🔥 Diagnostics are heating up:

• MolecuLight raised $27.5M to scale its real-time imaging platform, add thermal capability, and push global growth — acquisition bait?

🦶 In Foot & Ankle:

• Zimmer Biomet acquired Paragon 28 for ~$1.2B, expanding its surgical portfolio with total ankle, forefoot, and flatfoot solutions.

📦 Broader Medtech Signals:

• Stryker bought Inari Medical (~$4.9B) for CLI and venous disease

• Boston Scientific picked up Bolt and SoniVie for a combined $1B+

• Beta Bionics and Caris Life Sciences IPO’d, spotlighting momentum in diabetes tech and AI diagnostics

🧠 What’s Next for H2 2025?

• Mölnlycke is cashed up and on the hunt

• MolecuLight could be next to go

• Arthrex’s stealth move may ignite new demand for sensor-based platforms

• And diagnostic + digital convergence? No longer a buzzword — it’s happening

📈 July Fund Performance – WoundCareFund Pulse

The WoundCareFund closed out July at $430.42/share, up +1.4% from June’s $424.46. While broader markets wrestled with mixed earnings and macro headwinds, the fund posted a modest but meaningful gain, driven by strength in select diagnostics, biologics, and surgical platforms. Volatility remained high, but sector-specific momentum is building. Let’s break it down, week by week 👇

🗓️ Key Earnings in August:

• 8/5: Smith+Nephew

• 8/7: AVITA, Organogenesis, Treace

• 8/8: SANUWAVE

• 8/13: MediWound

• 9/16: Advanced Medical Solutions

🔦Innovation Index Spotlight - MiMedx🔦

MiMedx took the spotlight in July with a double-punch of strategic expansion and financial strength, positioning itself as more than a regenerative graft company. With its newly announced partnership and investment in Vaporox—a reimbursed, FDA-cleared adjunct therapy device—MiMedx is moving aggressively to pair biologics with advanced wound healing technologies. Add in record Q2 revenue, an EPS beat, and raised full-year guidance, and it’s clear: MiMedx isn’t just riding the recovery wave—they’re reshaping the category.

Why MiMedx owns the July spotlight:

1. Strategic Expansion into Adjunct Therapies

   • Announced exclusive collaboration with Vaporox (July 16), acquiring rights to a reimbursed, FDA-cleared device (Vaporous Hyperoxia Therapy).

   • This is a bold signal of category expansion - they are no longer just a placental graft player; they’re now bundling biologics with device-based adjuncts.

2. Record-Breaking Q2 Results

   • $98.6M in quarterly revenue (+13% YoY), highest ever.

   • Strong EBITDA performance and a surprise EPS beat ($0.10 vs. $0.05).

   • Management raised full-year guidance - a confident signal to investors and partners.

3. Momentum Across Franchise

   • Commercial traction in both wound and surgical segments.

   • Clear integration strategy: combining product + platform for better outcomes and reimbursement positioning.

   • Positioned for synergy with VHT as CMS reimbursement tightening looms on the skin-sub front.

📬 Closing Thoughts

🎇 We kicked off the month with a call for real independence — the kind that saves limbs, not just fireworks. - see it here

As CMS tightens the screws and innovation heats up, Below the Knee continues to track what matters: capital, capability, and care convergence.

If you're building in this space — or investing in it — now's the time to stay close to the signals.

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Thanks for reading — and for advancing wound care below the knee and beyond.

👋 Got news? New launch, trial, or market play? DM me or hit reply—we spotlight rising players every month.

— Scott
Publisher, Below the Knee
LinkedIn | WoundCareFund.com