Below The Knee | Market Signal

OPENING SHOT

Payment Policy, Congressional Pushback, and the Access Crisis in Plain Sight.

This week the CAMPs reimbursement story has continued to consume much of the conversation. The Wound and Hyperbaric Association published peer-reviewed survey data in the Journal of Wound Care — 130 respondents across 36 states, representing roughly 12,000 wound patients per week — documenting authorization delays, treatment denials, practice closures, and patient outcomes including sepsis, amputation, and death. Sanuwave (NASDAQ: SNWV) issued a guidance cut the same week, directly attributing Ultramist capital equipment market disruption to wound care practices going out of business from CMS clawbacks. That is two independent data points — a clinician survey and a public company earnings warning — landing in the same news cycle. The policy consequences are no longer speculative.

Meanwhile Washington sent mixed signals on AI in healthcare. The House Appropriations Committee voted unanimously to block funding for CMS's WISeR AI prior authorization pilot in Medicare — bipartisan, a rare thing — while CMS simultaneously stood up a new Office of Health Technology and Products to centralize its AI and interoperability strategy. The FDA wound care device proposed rule from November 2023, which was supposed to be finalized in May 2026 and wasn't, is now the subject of organized stakeholder pressure for withdrawal — 95% of the 76 public comments opposed it.

On the capital side, Fesarius Therapeutics closed a $20M Series A for its DermiSphere hydrogel dermal regeneration template, with J&J Innovation – JJDC as a co-investor. IHLD MedTech raised $3M from UltraGreen.ai for AI wound care expansion. Applied Biologics released clinical trial data on XWRAP for diabetic foot ulcers. Conexeu Sciences confirmed a Q1 2027 510(k) target for its thermosensitive ECM platform.

The broader MedTech M&A environment provided context: PwC reports medtech deal value reached $36.5 billion in H1 2026, following a decade-high year in 2025.

Here's the week.

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WOUND CARE

Policy | CMS CAMPs Payment Change Driving Clinics to Close, Survey Finds

A national clinician and practice survey conducted by the Wound and Hyperbaric Association (WHA), published in the Journal of Wound Care on June 16, documents widespread disruption across wound care delivery following the January 2026 CMS Physician Fee Schedule change establishing a fixed reimbursement rate of approximately $127.14 per cm² for cellular, acellular, and matrix-like products (CAMPs), regardless of product type or regulatory classification. The study, sponsored by Tiger BioSciences, collected 130 responses from clinicians and practices across 36 states, representing a comparative pool of 4,551 NPIs that applied CAMPs in Medicare claims during 2024 — collectively caring for approximately 12,000 wound patients per week. Among key findings: 61% cited authorization delays for clinically eligible patients; 58% reported reduced ability to deliver timely advanced wound care; 45.4% reported reduced access due to closures or planned closures of wound care practices; and 85.4% cited personal narratives describing real-world negative effects including infection, sepsis, limb loss, amputation, and death. The survey analysis noted the rule places greater financial pressure on independent, mobile, home-based, and non-facility wound care providers than on hospital outpatient departments, which receive a separate facility payment of approximately $746.61 for CAMP application — creating what the authors describe as a site-of-care equity concern. The Wound and Hyperbaric Association is calling for CMS to reevaluate the current reimbursement framework.

The BTK read: This is the most important wound care policy story of 2026, and it's now peer-reviewed. The WHA survey is carefully constructed — real NPIs, real patients per week, a 10-week data collection window — not a vendor-sponsored advocacy document. The finding that 45.4% of respondents reported closures or planned closures of wound care practices is a structural market signal, not just an access concern. The Sanuwave guidance cut this week, directly attributing Ultramist capital equipment market disruption to wound care practices closing from CMS clawbacks, provides independent corroboration from a public company's earnings disclosure. The combined effect is what should concern anyone with commercial exposure in community-based wound care. The site-of-care equity argument — hospital outpatient departments receiving ~$746 in facility payments that mobile and home-based providers don't — is both the strongest policy argument for reform and a significant commercial headwind for non-facility operators. Watch for CMS response and any Congressional action on the 2027 Physician Fee Schedule as the next milestones.

Finance | Sanuwave Cuts Q2 Guidance, Cites Wound Care Practice Closures from CMS Clawbacks

Sanuwave Health (NASDAQ: SNWV) on June 16 updated its second quarter 2026 revenue guidance to $8.5–$9.5 million, below guidance provided on the Q1 earnings call. CEO Morgan Frank cited "widespread clawbacks of CMS reimbursement for skin substitutes and allograft usage" as materially worse than expected, driving wound care practices out of business. Frank noted that clinic closures and liquidations appear to be flooding the secondary market with used Ultramist systems, cannibalizing new capital equipment sales. On a positive note, the company reported applicator consumable volumes remain robust and on pace for a record quarterly unit volume in Q2.

The BTK read: The Sanuwave guidance cut is a useful market data point independent of CMS policy debates — this is a public company disclosing in an SEC-filed communication that its capital equipment business is being directly impacted by wound care clinic closures attributable to CMS reimbursement changes. The secondary market dynamics are worth watching: used Ultramist systems from liquidating practices suppress new system demand while potentially seeding new user placements that eventually generate recurring consumable revenue. Frank's framing — "we're in the applicator business" — is the right long-term view, but the near-term capital equipment revenue disruption is real and now quantifiable. For investors tracking wound care commercial-stage companies, this is an earnings risk disclosure that affects the entire sector's capital equipment outlook, not just Sanuwave.

Capital | Fesarius Therapeutics Closes $20M Series A for DermiSphere Hydrogel Dermal Regeneration Template

Fesarius Therapeutics (New York, NY) closed an oversubscribed $20 million Series A on June 10, anchored by Jefferson Life Sciences and joined by Johnson & Johnson Innovation – JJDC, Empire State Development's NY Ventures, and ASPS Ventures — the inaugural institutional investment arm of the American Society of Plastic Surgeons. DermiSphere is a hydrogel Dermal Regeneration Template with FDA clearance, designed to drive cellular infiltration and vascularization. The company plans to use the capital to expand its direct sales force, pursue Breakthrough Device Designation, and advance a pivotal clinical trial for its OneStep procedure — simultaneous placement of DermiSphere and a skin graft that would eliminate the second surgery required under current standard of care. Fesarius cited a $1.6 billion US dermal regeneration market with minimal product innovation over the past three decades.

The BTK read: J&J Innovation doesn't write Series A checks into commercial-stage medtech companies as a passive financial exercise. The dermal regeneration category has been dominated by Integra LifeSciences' acellular matrices for years — this is a structural bet on a new mechanism class. The OneStep procedure thesis is commercially intelligent: eliminating a second surgery changes both the hospital economics and the surgeon conversation simultaneously. The Breakthrough Device Designation pursuit is the regulatory priority to watch. If granted, it accelerates both the pivotal trial timeline and CMS coverage dialogue. Note that this story is landing in the same week the CAMPs survey documents access disruption at the community wound care level — the innovation story and the access story are happening simultaneously at different points in the market.

Capital | IHLD MedTech Raises $3M from UltraGreen.ai for AI Wound Care Expansion

IHLD MedTech announced a $3 million strategic investment from UltraGreen.ai to advance its AI-powered wound care platform. The company focuses on AI-assisted wound assessment and management tools. Financial terms beyond the headline amount were not disclosed.

The BTK read: The $3M from an AI investor into a wound care AI platform is a small-check signal worth noting primarily for the investor profile — UltraGreen.ai is an AI-focused fund rather than a dedicated MedTech investor. AI wound care has attracted consistent small-ticket capital over the past 18 months, ranging from image analysis platforms to clinical decision support tools. The category is real; the commercial challenge remains reimbursement and workflow integration. Without knowing more about IHLD's specific clinical evidence base, regulatory pathway, or existing commercial traction, this is a watch item, not a conviction call.

Regulatory | FDA Wound Care Device Proposed Rule: Stakeholders Push for Withdrawal

An Epstein Becker & Green analysis published June 12 in the National Law Review provides an assessment of public comments submitted to FDA's November 2023 proposed rule to classify antimicrobial wound dressings and washes. The final rule was scheduled for publication in May 2026 and has not appeared. Of 76 unique comments analyzed, 76.3% were strongly opposed (advocating withdrawal), 18.4% were opposed in part, and 2.6% were supportive. The 95% of commenters with negative sentiment included physicians, researchers, medical societies, and large and small medical device companies. The Alliance for Wound Care Stakeholders submitted a formal request for withdrawal in response to OMB/HHS deregulatory action inquiries. The proposed rule targets currently marketed antimicrobial wound dressings — primarily those incorporating hypochlorous acid or silver — by proposing new device classifications. Critics argue finalization would disrupt a stable regulatory regime and paradoxically accelerate antibiotic resistance rather than prevent it.

The BTK read: The rule's May 2026 finalization target came and went without action, and no withdrawal notice has been issued. That is the current state of play. For companies with products in the antimicrobial wound dressing category — hypochlorous acid, silver-containing dressings, wound washes — this remains an open regulatory risk that is neither resolved nor formally abandoned. The 95% opposition rate across the full stakeholder spectrum (clinicians, manufacturers, societies) is unusually unified, and the deregulatory environment under the current administration is favorable to withdrawal. But "favorable conditions" and "formal action" are different things. This one stays on the watch list until there is an official disposition.

Clinical | Applied Biologics Reports XWRAP Clinical Trial Data for Diabetic Foot Ulcers

Applied Biologics reported significant clinical trial results for its XWRAP® product in diabetic foot ulcer treatment. The data was characterized as signaling a resilient shift in wound care approach. Specific trial endpoints and comparator details were not fully disclosed in available materials.

The BTK read: Clinical data releases without peer-reviewed publication details require caution in interpretation. XWRAP is an amniotic membrane product — a CAMPs category product — competing in a category that is currently under significant reimbursement pressure from the 2026 CMS PFS change documented above. Clinical efficacy data matters, but commercial viability for a CAMP product in the current reimbursement environment is the primary question. Watch for peer-reviewed publication and any CMS coverage determination activity as the signals that would change the commercial assessment.

Product Development | Conexeu Sciences Advances Thermosensitive ECM Platform Toward Q1 2027 FDA Submission

Conexeu Sciences confirmed it has completed manufacturing scale-up and formulation method transfer to a CDMO in preparation for a 510(k) premarket notification submission planned for Q1 2027. The CXU platform is a thermosensitive extracellular matrix that remains flowable during application, then transitions to a gel scaffold at body temperature. The company received FDA pre-submission feedback through the Q-Submission process. Conexeu currently trades at a $385 million market cap on a pre-revenue basis, with a current ratio of 8.51 and no debt.

The BTK read: The manufacturing transfer milestone is real progress, but it's a process step, not a clinical readout. The pre-sub FDA feedback is meaningful — it confirms regulatory engagement. The $385M market cap on a pre-revenue company with a Q1 2027 510(k) target requires the thermosensitive ECM mechanism to demonstrate clinical performance that justifies that valuation at clearance, not just at submission. Flowable application converting to a gel scaffold is a genuinely useful clinical handling property. Whether it translates to superior healing outcomes versus existing ECM products is the question that 510(k) clearance alone won't answer — that requires the post-market clinical data. Watch the submission date and any accompanying clinical evidence.

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LIMB SALVAGE

Clinical | SVS Study: Full Adherence to Guideline-Directed Care in PAD Reduces 2-Year Limb Events

New data presented at VAM26, the Society for Vascular Surgery Vascular Annual Meeting, show that PAD patients with claudication who fully adhered to preoperative guideline-directed care (GDC) achieved an 87.9% MALE-free survival rate at 2 years, compared to 76.7% for partially adherent patients and 66.6% for non-adherent patients (P < .01). GDC includes documentation of severe lifestyle limitation, exercise therapy, optimal medical therapy (single antiplatelet, lipid-lowering, smoking cessation), and adherence to all three components. The study enrolled 258 patients; 12.8% were fully adherent, 73.3% partially adherent (OMT only), and 12.8% non-adherent. MALE occurred in 23.3% of the total population, driven primarily by reinterventions. The MUSC research team is now running a prospective EHR-based clinical pathway study with over 100 patients enrolled to combat non-adherence before surgery.

The BTK read: This data quantifies what the vascular surgery community has long believed but struggled to operationalize: full adherence to the complete GDC bundle — not just medications — significantly improves limb outcomes. The 21-percentage-point gap in MALE-free survival between complete and non-adherent patients at 2 years is a meaningful clinical effect, and the reintervention-driven MALE finding matters for commercial planning: if more reinterventions can be avoided through better preoperative GDC adherence, that shifts the clinical and economic model for limb salvage programs. The EHR-integrated clinical pathway being developed at MUSC is the infrastructure piece that could make guideline adherence scalable beyond academic medical centers. Watch for the prospective study readout.

POLICY & REGULATORY

Regulatory | House Committee Votes to Block CMS AI Prior Authorization Pilot in Medicare

The House Appropriations Committee voted unanimously on June 10 to add an amendment to the HHS 2027 spending bill that would block funding for the WISeR (Wasteful and Inappropriate Service Reduction) model — the CMS pilot that adds AI-backed prior authorization for certain Medicare services, including skin and tissue substitutes. The amendment was described as bipartisan. WISeR launched in six states in January 2026 and has faced sustained criticism from patient advocates, physicians, and now members of Congress on both sides of the aisle for delaying care to seniors. The measure must still pass the full House and Senate before taking effect.

The BTK read: Bipartisan opposition to AI-driven prior authorization in traditional Medicare is a significant political signal for the sector. WISeR specifically applies to skin and tissue substitutes — directly relevant to wound care — making this a direct threat to one of the reimbursement pathways that advanced wound care products depend on. The unanimous committee vote doesn't kill WISeR, but it substantially raises the political cost of defending it. The broader dynamic here is a government simultaneously restricting clinical AI (WISeR vote) and expanding its AI infrastructure (new CMS Health Technology office) in the same week. These are not contradictory — one is procedural gatekeeping, one is organizational capability building — but the speed at which policy can move in either direction is the takeaway.

Infrastructure | CMS Creates New Office of Health Technology and Products for AI and Interoperability

CMS formally established the Office of Health Technology and Products on June 10, consolidating the agency's AI implementation, digital health tools, and healthcare data exchange functions under a single office. The office will be led by Amy Gleason as deputy administrator and chief product officer. It includes eight subgroups covering open source, standards and interoperability, product development, and the agency's Digital Service. The organizational changes take effect at the end of June.

The BTK read: This is a structural move, not a policy one. CMS is centralizing technology authority — which previously was dispersed across multiple offices — under a single organizational home. That has implications for the speed and coherence of future digital health coverage and payment decisions. For companies developing AI-integrated wound assessment, care pathway, or documentation tools: the interoperability and data exchange groups within this new office are the relevant counterparts for future dialogue. The Health Tech Ecosystem initiative, which this office also houses, has been active in recruiting technology partners — it's worth tracking what wound care-specific tools emerge from that pipeline.

FINANCE | CAPITAL ACTIVITY

SECTOR CONTEXT | Healthcare M&A Mid-Year Pulse

PwC released its H1 2026 M&A outlook this week, reporting medtech deal value at $36.5 billion in the first half of the year — extending a period of unusually strong activity following a decade-high 2025. Buyers are targeting cardiovascular technologies, neurostimulation, connected devices, and workflow technologies. AI has shifted from an experimental capability to a core diligence requirement. Biopharma led all sectors with deal value exceeding $65 billion in Q1 alone, driven by loss-of-exclusivity pipeline replenishment. Portfolio reshaping, carve-outs, and take-privates remained significant activity drivers across the medtech segment.

The BTK read: The M&A environment for MedTech remains structurally active, and the specific categories PwC flags — cardiovascular, connected devices, workflow tech — map directly to the vascular intervention and care pathway tools within BTK's coverage universe. The "AI as diligence requirement" framing is important: companies that cannot demonstrate AI integration strategy (not just AI claims) are increasingly disadvantaged in strategic conversations. Revenue multiples, not EPS, remain the primary valuation metric for wound care and limb salvage acquirees in this environment.

📅 UPCOMING EVENTS

June 25–28 | Anaheim, CA — The Western Foot & Ankle Conference 2026 – Disneyland Hotel & Convention Center

August 6–9 | Nashville, TN - APMA Annual Scientific Meeting (The National) — Gaylord Opryland

September 10–11 | New Orleans, LA - IPAWS & Tissue Repair Summit (Kernexus) — The Ritz-Carlton

September 14–16 | Louisville, KY - NAWCO HEAL Conference 2026

September 23–27 | Kuala Lumpur, Malaysia - WUWHS 2026

October 15–18 | Las Vegas, NV - SAWC Fall 2026 — Caesars Palace

October 22–24 | Anaheim, CA - DFCon 2026 — JW Marriott

November 6 | Virtual — WoundCon Fall 2026

December 9–12 | Phoenix, AZ — Desert Foot Multi-Disciplinary Limb Salvage & Wound Care Conference

Below The Knee | belowtheknee.co Independent market intelligence for wound care, limb salvage, vascular intervention, and foot & ankle.

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- Scott