Limb amputation from diabetic foot ulcers combined with their management accounts for around $80 billion of America’s annual healthcare spending. And, this is in this market that London-listed Aoti is quietly making headway.
The med-tech company, which listed in London last year, is based in California and has operations in Ireland.
Shares have had a rocky year, largely due to political uncertainty in the US around healthcare administration programmes such as Medicaid and Medicare, and order processing delays within the Veterans Affairs system.
Reduced headcount at the VA and broader uncertainty over healthcare reforms were cited as reasons for a softer-than-expected performance. While frustrating, chief executive Dr Mike Griffiths calls these ‘temporary headwinds’.
He believes they will shift in the company’s favour as TWO2, Aoti’s at-home topical wound oxygen therapy, continues to deliver both clinical and financial benefits.
‘Even this year, with these unprecedented headwinds in the US, we still grew over 20 per cent in the first half,’ he said. ‘By keeping patients out of hospital and reducing amputations and resource utilisation, we have a strong value story that matches our unprecedented long term clinical outcomes.’
TWO2 creates a sealed chamber around the limb and cycles pressurised oxygen with gentle, non-contact compression and humidity
What TWO2 is and why it matters
Chronic wounds, notably diabetic foot ulcers, often stall when oxygen levels in tissue drop, weakening the immune response and halting healing.
TWO2 creates a sealed chamber around the limb and cycles pressurised oxygen with gentle, non-contact compression and humidity. This helps oxygen diffuse into the wound, reduces swelling and supports a moist healing environment.
Patients self-treat at home for 90 minutes a day, five days a week, over their existing dressings. This boosts adherence and reduces clinic workload.
‘We deliver oxygen topically with a chamber… it diffuses into the tissue, so it gets it exactly where it needs to go,’ Griffiths explained.
Aoti says the benefit is not just faster closure but better-quality healing. Across randomised trials and real-world use studies, Griffiths points to higher healing rates than standard care, improved collagen and vascularity, a six-fold reduction in ulcer recurrence and significantly fewer hospitalisations and amputations over 12 months.
‘We’ve shown in state-of-the-art randomised controlled trials to be six times more effective… delivering significant reductions in hospitalisations and amputations,’ he said.
TWO2 has been included in a Nice emergency guideline update for diabetic foot ulcers and has received fast-track approval from Germany’s Federal Joint Committee (G-BA).
Commercial model and scale to date
Unlike many device companies that simply sell items, Aoti acts as the home care provider of record in the US.
So, when a clinician prescribes therapy, Aoti delivers the device to the patient’s home, provides training and remote monitoring using apps and AI, and handles billing, helping ensure real-world outcomes match those seen in clinical trials.
‘We take it to the patient’s homes, we train them… so we control the whole value chain,’ Griffiths said.
The TWO2 devices are built in Galway, Ireland, and deployed as a rental fleet over an average three to four months to heal each wound. The main consumable, a disposable treatment chamber, is produced by a US manufacturer in Mexico.
Evidence of scale is emerging. ‘We’ve treated about 40,000 patients… with probably close to four million home treatments having been applied by patients at home,’ Griffiths said.
The simplicity of the regimen supports high adherence, which matters to payers, as repeat wounds and hospitalisations drive most of the cost.
Where the growth is coming from
Aoti built its early US business in the Veterans Affairs system and in selected Medicaid states, such as New York, while working towards national Medicare coverage.
‘We grew at 30 per cent+ for multiple years by focusing on the VA and certain Medicaid states, all prior to us receiving traditional Medicare coverage,’ Griffiths said.
A Medicare (CMS) coverage determination, which would open the over-65 market, accelerate progress in expansion Medicaid states and influence other insurers, is in process and flagged as the key near-term value driver.
‘It not only opens up the most lucrative sector… but makes everything we’re doing easier and faster,’ he said.
International expansion is underway in the UK, Germany and the Gulf region, underpinned by a growing clinical evidence base. That global relevance reflects two enduring health trends: ageing populations and obesity-driven chronic disease.
‘In the US, 90 per cent of the $4.5 trillion spent on healthcare goes to chronic disease,’ Griffiths said. ‘The burden isn’t going anywhere, and systems are trying to do more at home with less.’
TWO2’s home-based model, recurring-revenue profile and cost-saving outcomes position it well to address these priorities.
Headwinds, and why management expects them to ease
The US operating environment has been noisy. Staffing changes at the VA caused processing delays, and the political cycle has added uncertainty to Medicaid budgets.
‘There was some disruption that’s beginning to settle down now… it definitely created problems in the first half,’ Griffiths said.
He attributes the Medicaid delays to shifts in federal-state funding rather than falling demand. The upshot has been slower decision-making among some insurers, not a lack of clinical interest.
Griffiths argues that Aoti offers exactly the kind of solution policymakers want, therapies delivered at home that reduce overall use.
‘All the things people are talking about, rooting out fraud and abuse, getting treatments at home, keeping patients at home, we should resonate with,’ he said. ‘We call them headwinds today, but I do believe they will become tailwinds because we are part of the solution.’
The investment case from here
The financial picture remains that of a growth company with a catalyst on the horizon.
The business model, a rental device, a pull through disposable chamber and a home-service layer, is built for operating leverage as coverage widens.
Despite the US disruption, growth has remained strong. The company posted 33 per cent growth last year and 21 per cent in the first half of this year.
Griffiths said the stock’s small free float has amplified downside volatility, but believes that also means gains shuld accelerate with continued positive news.
‘With the right news and momentum, it should drive it the other direction equally,’ he said.
Three things to watch: first, the CMS coverage decision, which could come outside regular trading updates; second, further large-scale real-world validatory datasets, involving a study on over 5,000 patients, expected to be published in leading journals; and third, the pace of international expansion, where guideline inclusion could speed up adoption.
‘That’s what makes everything we’re doing easier and faster,’ Griffiths said of CMS coverage policy, adding it will also unlock pull-through across other US payer segments.
For now, TWO2 is already treating thousands at home with a routine most patients can manage (90 minutes a day, five days a week) in a model designed to align with provider and payer interests.
‘It’s not trying to train clinicians to do something new,’ Griffiths said. ‘They do their standard care and you just add this on top.’
If the policy fog clears and CMS approval follows its typical ripple effect, Aoti’s combination of outcomes and cost savings should turn today’s turbulence into tomorrow’s leverage.
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