Bioventus Inc.

Current report

Unexpected increases in the volume of rebate claims we receive from payers we contract with due to the implementation of processing and billing system changes by the payers have in the past and may in the future negatively impact our business and financial results.

Current report

As previously disclosed, our revenues are recorded at the transaction price, which is determined by the contracted price net of estimates of variable consideration relating to various items, including rebates paid pursuant to contracts relating to the sale of our products. A large private insurance payer recently informed us that it has made changes to its claims data management and billing systems and that, as a result, we expect that we may experience significantly larger rebate volumes for our HA viscosupplement products for future periods than the Company previously estimated or has experienced in prior periods. We were also informed that the impact of these changes is not limited to our products and that other manufacturers under contract with this payer may experience similar increases. In addition, another payer that we contract with also recently notified us that they are implementing similar changes to their claims and billing systems. We are working with these payers to assess the impact that these changes may have on our business and believe, based on the information presently available, that our current reserve estimates are adequate to cover these additional rebate volumes and that the changes are not expected to have a material impact on the Company’s existing accruals for the quarter. We are dependent on the payers we contract with to provide timely and accurate claims data and invoices to establish our rebates estimates. If this information is not received in a timely manner or is inaccurate or unexpectedly increases, our estimates may prove to be inadequate to cover any additional rebate volumes we may receive from payers in the future. If our rebate volumes increase or our estimates prove to be inadequate, our business, results of operation and financial condition may be adversely affected and our revenue may be lower than we forecasted.

Current report

Various governmental reimbursement reform and other healthcare cost containment proposals may affect our ability to sell our products profitably and could adversely affect our business results and operations and financial conditions.

Current report

Certain proposed legislative or other regulatory reforms may be adopted in the future that could result in reductions in Medicare and other governmental healthcare funding, more rigorous coverage criteria, new payment methodologies or other downward pressure on the pricing or reimbursement we or our customers receive for our products. For example, the Medicare Physician Fee Schedule (“PFS”) Proposed Rule (CMS-1832-P) (“Proposed Rule”) for calendar year 2026, issued by the Centers for Medicare and Medicaid Services (“CMS”), to be effective January 1, 2026, could impact government price reporting requirements for Medicare Part B. Specifically, the Proposed Rule includes significant proposed changes to CMS’s definition of bona fide service fees (“BFSFs”) for purposes of average sales price (“ASP”) calculations, which is the metric used to determine reimbursement under Medicare Part B. Although primarily aimed at pharmaceuticals, the changes included in the Proposed Rule would impact all products reimbursed under Medicare Part B, including the Company’s HA viscosupplementation products.

Current report

The final rule was published by CMS on October 31, 2025 (“Final Rule”). Several of the proposed requirements related to BFSFs were either not adopted or were modified by CMS in the Final Rule. The Company is currently reviewing the Final Rule to determine the impact that these new requirements may have on our business. As initially proposed, the Proposed Rule would have significantly changed longstanding ASP calculation methodologies by, among other things, adding new requirements for supporting the fair market value of BFSFs and by requiring periodic recertifications of such fees by the Company as a condition of BFSF treatment. Long standing CMS regulations have permitted manufacturers to exclude BFSFs from ASP if the fee satisfied certain conditions. Compliance with these new requirements would mandate substantial updates to our existing government pricing compliance and reporting processes. Moreover, because many of our contracts with fees that may fall within the expanded definition of BFSFs proposed in the new rule are with customers, such as wholesalers and pharmacy benefit managers, which are significantly larger than we are, we may not be able to restructure our contracts to fit our service fee payments within the new standards. It is presently unclear the extent to which these requirements are included in the Final Rule and the impact that the new requirements, as adopted, may have on our business. If these and the other requirements of the Proposed Rule are implemented and we are not successful in our efforts to renegotiate the applicable contracts within the limited time frame mandated by the Proposed Rule or are otherwise required to include BFSF in our reported ASP for our HA products pursuant to the Proposed Rule, the ASP and CMS reimbursement for our HA products may be reduced, which may adversely affect our operating results and financial condition.

Current report

Similarly, reimbursement for our HA products may also be affected by executive orders issued by the administration relating to drug pricing, specifically “Delivering Most-Favored Nation Prescription Drug Pricing to American Patients” and “Lowering Drug Prices by Once Again Putting Americans First” (the “Executive Orders”) that set forth the administration’s policy goal of lowering pricing. Although the Executive Orders outline broad policy objectives and currently lack specific mandates, their apparent aim is to lower prices paid in the United States to more closely align with reimbursement levels provided by government-run health systems in other developed countries. To the extent the administration seeks to implement specific mandates or other cost control initiatives through action by the Department of Health and Human Services or other federal agencies, the reimbursement for our HA products may be negatively impacted. We cannot predict the extent to which this proposal, or similar reimbursement reform proposals or other healthcare cost containment measures that might be enacted in the future, may impact the demand or commercial success of our HA viscosupplements or any of our other products we currently sell or plan to commercialize.

Previous report

Our 2025 Credit Agreement contains financial and operating restrictions that could limit our access to credit. If we fail to comply with its financial or other covenants, we might be required to repay the indebtedness, which could harm our liquidity.

Previous report

We are subject to certain covenants under the 2025 Credit Agreement, including, but not limited to:

Previous report

•a minimum interest coverage ratio and a maximum consolidated total net leverage ratio requirement as defined in the 2025 Credit Agreement;

Previous report

•restrictions on the declaration or payment of certain distributions on or in respect to our equity interests;

Previous report

•restrictions on acquisitions, investments and certain other payments;

Previous report

•limitations on the incurrence of new indebtedness;

Previous report

•limitations on the incurrence of new liens on property or assets;

Previous report

•limitations on transfers, sales and other dispositions;

Previous report

•limitations on entering into transactions with affiliates; and

Previous report

•limitations on making any material change in any of our business objectives that could reasonably be expected to have a material adverse effect on our ability to repay amounts borrowed under the 2025 Term Loan or 2025 Revolver.

Previous report

In the absence of a waiver from our lenders, any failure by us to comply with these covenants might result in the declaration of an event of default, which could adversely affect our business, results of operations and financial position.

Previous report

In addition, our indebtedness could have significant consequences on our financial position, including:

Previous report

•requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of funding growth, working capital, capital expenditures, investments or other cash requirements;

Previous report

•reducing our flexibility to adjust to changing business conditions or obtain additional financing;

Previous report

•exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under our 2025 Term Loan, are at variable rates, making it more difficult for us to make payments on our indebtedness;

Previous report

•limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements or general corporate purposes.

Previous report

We might require additional capital to fund our financial and operating obligations and support business growth.

Previous report

If our expected cash from operations together with available borrowings under our 2025 Credit Agreement are sufficient to fund our current financial and operating obligations, we might require additional capital. In addition, we intend to continue to make investments to support our business growth and might require additional funds to respond to business challenges or opportunities, including the need to further develop our current products and any new products, enhance our operating infrastructure, and acquire complementary businesses. Accordingly, we might need to engage in equity or additional debt financings to secure additional funds. If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any additional debt financing secured by us could involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, which might make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. In addition, we might not be able to obtain additional financing on terms favorable to us, or at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when required, our ability to continue to support our business growth and to respond to business challenges could be significantly limited.

Previous report

International tariffs, including tariffs applied to goods traded between the United States and other countries, and restrictions on goods imported from certain such regions may adversely affect our business, results of operations and financial condition.

Previous report

Earlier this year the United States stated that it intends to impose tariffs in pursuing government policy and has already imposed, or announced, several new tariffs, including tariffs on goods and materials from various countries including member countries of the European Union, Switzerland, Canada, Mexico, Japan and China. When unilateral changes are made to United States import tariffs, other countries may reciprocate, and in many cases have reciprocated, with tariffs imposed or announced, against the United States. In some instances, the declaration of this new tariff policy has resulted in the United States entering into international trade negotiations with certain countries, some of which have resulted in the announcement of the international trade agreements with those countries. The impact of the newly announced trade agreements and whether and to what extent the newly imposed tariffs will remain in place or additional tariffs will be imposed remains uncertain. If tariffs are imposed or increased by either the United States or other countries, it may impact the cost of goods, the price of our products and demand for our products in countries impacted by such tariffs. For example, our Durolane and Gelsyn products are manufactured in Sweden and Switzerland, respectively. The enactment of, or increases in tariffs, or other such charges, may increase the cost of importing these products into the United States. This may have an adverse effect on our business or on our results of operations. The institution of trade tariffs globally also carries the risk of adversely affecting overall global economic conditions, which could have a negative impact on us.