Vivos Therapeutics (VVOS): A Strategic Pivot to Sleep Apnea Dominance

Vivos Therapeutics (NASDAQ: VVOS) has embarked on a transformative journey in 2025, redefining its business model to capitalize on the vast and underserved obstructive sleep apnea (OSA) market. By shifting from a traditional dental industry distribution model to a direct affiliation and acquisition strategy for medical sleep practices, the company has unlocked new revenue streams and positioned itself as a first-mover in non-invasive OSA treatment. This strategic pivot, coupled with regulatory validation and institutional interest, underscores Vivos' potential to dominate a $1 billion global market.

A High-Margin, Patient-Direct Model

Vivos' transformation began with the June 2025 acquisition of The Sleep Center of Nevada (SCN), the largest operator of medical sleep centers in the state. This move marked a departure from its prior reliance on dental professionals to distribute its oral appliances. Instead, Vivos now generates revenue directly from diagnostic testing and treatment services. In Q3 2025, SCN contributed $2.2 million in diagnostic sleep testing revenue and $1.3 million in treatment center revenue, driving a 76% year-over-year and 78% sequential revenue growth for the quarter. The acquisition demonstrated the scalability of Vivos' new model, which combines product sales with high-margin service revenue from sleep centers.

The company further expanded its reach through a management agreement with MISleep Solutions LLC in Auburn Hills, Michigan, under its updated affiliation model. This approach allows Vivos to partner with sleep center owners who prefer not to be fully acquired, enabling the company to scale without overextending capital. As Kirk Huntsman, Vivos' CEO, noted during the Q3 earnings call, this hybrid strategy "creates a flywheel effect, where increased patient access drives demand for our proprietary treatments".

Regulatory Validation and Market Credibility

Vivos' competitive edge is bolstered by its regulatory achievements. The company's Complete Airway Repositioning and Expansion (CARE) devices are the only FDA 510(k)-cleared technology for treating severe OSA in adults and moderate-to-severe OSA in children aged 6–17. This distinction positions Vivos to capture a critical segment of the market, particularly as traditional CPAP therapy faces patient adherence challenges.

In 2025, Vivos secured Centers for Medicare & Medicaid Services (CMS) approval for its VidaSleep™ oral appliance, expanding coverage for mild-to-moderate OSA and snoring in adults. This approval is expected to incentivize private insurers to follow suit, broadening access to Vivos' treatments and accelerating adoption. As stated by a report from ResearchAndMarkets.com, the global OSA devices market is projected to grow significantly, with non-invasive alternatives like Vivos' CARE devices leading the charge.

Institutional Interest and Financial Realities

Despite mixed institutional investment trends, Vivos has attracted notable inflows in Q3 2025. Connective Capital Management, LLC and Strategic Wealth Investment Group, LLC added 200,000 and 100,000 shares, respectively, while Vanguard Group Inc. increased its stake by 114.5%. These moves reflect optimism about the company's strategic pivot, even as some investors, like UBS Group AG, reduced holdings.

Financially, Vivos faces challenges. Gross margin declined to 58% in Q3 2025 from 60% in 2024, attributed to pricing discounts and operational costs tied to integrating SCN. The company also reported a net loss of $5.4 million for the quarter. However, management emphasized that these expenses are investments in long-term growth, with Huntsman stating, "We are optimizing operations and expect to achieve cash flow breakeven in the near future".

The $1 Billion OSA Market Opportunity

The global OSA market is vast, with over 1 billion people affected worldwide-90% of whom remain undiagnosed. Vivos' non-invasive, root-cause-focused approach differentiates it from competitors. Its CARE devices address anatomical issues underlying OSA, offering a durable alternative to CPAP. As the company expands its clinic network and affiliation model, it is well-positioned to capture a significant share of this market.

Conclusion: A Strategic Bet on Sleep Apnea Innovation

Vivos Therapeutics' strategic pivot to a patient-direct model, supported by regulatory validation and institutional interest, positions it as a compelling long-term investment. While near-term financial metrics remain challenging, the company's execution in Q3 2025-driven by SCN's performance and the scalability of its affiliation model-demonstrates the potential for high-margin growth. With the OSA market expanding and Vivos' first-mover advantage in non-invasive treatments, the company is poised to redefine sleep apnea care and deliver value to stakeholders.