iRhythm Technologies, Inc. operates as a digital healthcare company that creates solutions to detect, predict, and prevent disease.
The principal business of the company is the design, development, and commercialization of device-based technology to provide ambulatory cardiac monitoring services. Since first receiving clearance from the U.S. Food and Drug Administration (‘FDA’) for its technology in 2009, the company has supported physician and patient use of its technology and provided ambulat...
iRhythm Technologies, Inc. operates as a digital healthcare company that creates solutions to detect, predict, and prevent disease.
The principal business of the company is the design, development, and commercialization of device-based technology to provide ambulatory cardiac monitoring services. Since first receiving clearance from the U.S. Food and Drug Administration (‘FDA’) for its technology in 2009, the company has supported physician and patient use of its technology and provided ambulatory cardiac monitoring services from its Medicare-enrolled independent diagnostic testing facilities (‘IDTFs’) and with qualified technicians. The company has provided its Zio ambulatory cardiac monitoring services, including long-term continuous monitoring, short-term continuous monitoring, and mobile cardiac telemetry (‘MCT’) monitoring services (collectively, the ‘Zio Services’), using its Zio Systems.
Each Zio System combines an FDA-cleared and CE-marked, wire-free, patch-based, 14-day wearable biosensor that continuously records electrocardiogram (‘ECG’) data with a proprietary, FDA-cleared, CE-marked cloud-based data analytic software to help physicians monitor patients and diagnose arrhythmias. Since receiving FDA clearance, the company has provided the Zio Services to over eight million patients and has collected over 2 billion hours of curated heartbeat data.
Products and Services
Zio Systems and Zio Services
The Zio Systems and Zio Services deliver a patient-friendly design that enables between 98%-99% patient compliance with minimal ECG data noise or artifact, thereby potentially delivering superior clinical accuracy to physicians diagnosing arrhythmias and reducing the cost of care for healthcare systems by avoiding costly downstream adverse events. The company has developed a proprietary system that combines an FDA-cleared and CE-marked wire-free, patch-based, 14-day wearable biosensor that continuously records ECG data, with a proprietary FDA-cleared and CE-marked cloud-based data analytic platform to help physicians monitor patients and diagnose arrhythmias (collectively, the ‘Zio System’). The company currently offers three Zio System options — the Zio Monitor System, the Zio XT System, and the Zio AT System.
The Zio Service Monitoring Solutions
The Zio Monitor System is a prescription-only, remote ECG monitoring system that consists of a patch ECG monitor (the ‘Zio Monitor patch’) that records the electric signal from the heart continuously for up to 14 days and the Zio ECG Utilization Software (‘ZEUS’) System, which supports the capture and analysis of ECG data recorded by the Zio Monitor patch at the end of the wear period, including specific arrhythmia events detected by the ZEUS System. The Zio XT System is the previous generation of the Zio Monitor System and is a prescription-only, remote ECG monitoring system that consists of a patch ECG monitor (the ‘Zio XT patch’) that records the electric signal from the heart continuously for up to 14 days and the ZEUS System, which supports the capture and analysis of ECG data recorded by the Zio XT patch at the end of the wear period, including specific arrhythmia events detected by the ZEUS System.
The Zio Monitor patch is 72% smaller, 62% lighter, and 23% thinner than the Zio XT patch, attributes which have contributed to a positive impact on patient experience, including improved patient satisfaction, and associated improvement in device wear times. Furthermore, the Zio Monitor patch incorporates a breathable adhesive construct, which enhances the patient experience by removing moisture otherwise captured next to the patient’s skin, as well as Bluetooth communication capabilities and improved processing efficiency.
The Zio AT System is a prescription-only, remote ECG monitoring system that similarly consists of a patch ECG monitor (the ‘Zio AT patch’) that records the electric signal from the heart continuously for up to 14 days and the ZEUS System, but which also incorporates the Zio AT wireless gateway that provides connectivity between the Zio AT patch and the ZEUS System during the patient wear period. The wireless gateway, slightly larger than a smartphone, is provided to the patient at the time of Zio AT patch application and collects and transmits data from the Zio AT patch to the cloud via a long-term evolution (‘LTE’) cellular protocol.
The company supports physician and patient use of its Zio Systems through its Medicare-enrolled IDTF and qualified technicians, who perform the technical monitoring services associated with a physician’s order for long-term continuous monitoring or MCT monitoring services. Long-term continuous monitoring services (the ‘Zio LTCM Service’) and MCT services (the ‘Zio MCT Service’) are diagnostic medical procedures typically ordered by physicians for patients not suspected of having life-threatening arrhythmias, but who are suspected of having infrequent, difficult-to-detect, or asymptomatic arrhythmias. When physicians order long-term continuous monitoring services with the Zio System, the company’s biosensor technology collects an uninterrupted, long-term continuous recording of ECG data for up to 14 days and delivers a comprehensive end-of-wear report, which includes specific arrhythmia events detected by the ZEUS algorithm upon return of the Zio Monitor patch or Zio XT patch (and with the Zio AT patch, each, a ‘Zio patch’) and analysis of the stored data by qualified technicians. A Zio patch typically collects approximately 1.5 million heartbeats of data for each patient during a single wear period of up to 14 consecutive days.
After the company receives the Zio patch at its IDTF, the ECG data is uploaded to its secure cloud and preliminary findings are generated by its proprietary FDA-cleared deep learning algorithms. Each report is then validated by qualified technicians and sent to the patient’s prescribing physician. The company’s technicians also notify physicians of potential urgent arrhythmias according to the ordering physician’s specified notification criteria.
For the Zio MCT Services, the Zio AT patch and wireless gateway also offer the additional capability of providing actionable transmissions during the wear period to assist physicians in diagnosing and treating patients in situations where their physician has determined that there is a medical need to receive more timely, clinically actionable information.
While wearing a Zio patch, patients able to mark when symptoms occur by pressing a trigger button on the device and separately recording contextual data like activities and circumstances in a written symptom diary or digitally via the myZio application. This allows physicians to match symptoms and activity with ECG-based findings. The Zio patches are not available for sale outside of use with the company’s Zio Services. The Zio patches include the following features: patented clear, flexible, lightweight, wire-free design; unobtrusive and inconspicuous profile; proprietary adhesive backing designed to keep the Zio patch securely in place for the duration of the prescribed wear period; water-resistant functionality, allowing patients to shower, sleep, and perform normal daily activities, including moderate exercise; hydrogel electrodes and a compliant mechanical design to deliver a clear ECG with minimal artifact from movement; symptom button, or patient trigger, that is easy to find and press; indicated single application wear period of up to 14 days; and sufficient battery power for the entire wear period, without the need to recharge or replace batteries.
The Zio Platform for Clinical-grade Wearables
The company partnered with Verily Life Sciences LLC, an Alphabet Company (‘VLS’) and Verity Ireland Limited (‘VIL,’ and together with VLS, ‘Verily’) to develop their Verily Study Watch wearable device into a clinical platform. The company developed the Zio Watch (Study Watch with Irregular Pulse Monitor) with its clinically integrated ZEUS System, a solution that is intended to be integrated into clinical care delivery and to assist healthcare providers in identifying and monitoring Afib.
The company received FDA clearance on the clinically integrated ZEUS System, the AI algorithm and solution component of the Zio Watch. The Zio Watch has not been commercially launched. The company is evaluating potential opportunities to leverage its PPG algorithms and ZEUS System with other PPG-based wearables, and it intends to further pursue development opportunities on a wearable platform in the future.
Strategy
The key elements of the company’s strategy include further penetrating and expanding the U.S. ambulatory cardiac monitoring market; pursuing international expansion opportunities; exploring adjacent market opportunities; and advancing its system portfolio and core technology offering.
Sales and Marketing
The company directly markets its Zio Services in the United States to healthcare professionals through its internal organization, which includes sales representatives, field billing specialists, and customer experience representatives. The company’s sales team focuses on the initial introduction of the Zio Services to those participants that are instrumental to the decision-making process for ambulatory cardiac monitoring, which includes physician practices and healthcare systems. The company also focuses on continuing efforts to ensure healthcare professionals are knowledgeable about the clinical benefits and economic value of the Zio Services. The company continues to invest in its sales force and focuses on ensuring it optimizes the structure of its U.S. sales organization to expand the current customer account base and support adoption of the Zio Services.
The company markets its Zio Services to a variety of physician specialties, including general cardiologists, electrophysiologists, primary care physicians, neurologists, and other physician specialists who diagnose and manage care for patients with arrhythmias. The company has found success focusing on integrated delivery networks (‘IDNs’), in which networks of facilities and providers work together to offer a continuum of care to a specific geographic area or market, as well as with risk-bearing entities, as its Zio Systems become a key tool in population health management. Focusing on sales to these customer programs gives the company the opportunity to conduct a holistic sale for health systems interested in making value-based purchasing decisions.
The company has a small direct sales and clinical infrastructure in Bagshot, Surrey in England to service the UK market. The company has focused efforts on the introduction of the Zio Services using the Zio XT System into new accounts and market access efforts, in particular through orders made by NHS Trusts and Hospitals. Additionally, the company has built a small sales force covering Switzerland, Austria, and the Netherlands. In Japan and Spain, the company intends to utilize distributor services.
Competition
In providing the company’s Zio Services, the company competes with BioTelemetry, Inc. (acquired by Royal Philips), Preventice Solutions, Inc. (acquired by Boston Scientific, Inc.), and Bardy Diagnostics, Inc. (acquired by Baxter International, Inc.) to offer remote cardiac monitoring technology and also function as diagnostic service providers. The company also competes with companies that sell traditional, 24-to-48-hour Holter monitors, including GE Healthcare, Philips Healthcare, and Spacelabs Healthcare Inc., as well as Mortara Instrument, Inc. and Welch Allyn Holdings, Inc. (both acquired by Hill-Rom Holdings, Inc. now part of Baxter International, Inc.).
Third-Party Reimbursement
The company receives revenue for the Zio Services primarily from third-party payors, which include commercial payors and government agencies, such as the Centers for Medicare & Medicaid Services (‘CMS’). Third-party payors require the company to identify the service for which it is seeking reimbursement by using a Current Procedural Terminology (‘CPT’) code set maintained by the American Medical Association (‘AMA’). These CPT codes are subject to periodic change and update.
The company’s clinical centers are enrolled in the Medicare program as IDTFs, which allows it to bill CMS directly for its Zio Services. To maintain enrollment, the company must meet the CMS IDTF supplier standards, including having an independent medical director for oversight and qualified technicians who support the analysis of ECG data captured by the Zio patches as part of its Zio Services.
Research and Development
The company’s research and development expenses increased by $11.2 million, or 19%, to $71.5 million during the year ended December 31, 2024.
Technology License Agreement with BioIntelliSense, Inc.
On August 30, 2024, the company entered into a Technology License Agreement (the ‘License Agreement’) with BioIntelliSense, Inc. (‘BioIS’).
Intellectual Property
As of December 31, 2024, the company owned, or retained an exclusive license to, 46 issued patents from the U.S. Patent Office (‘USPTO’), 13 issued patents from the Japanese Patent Office, 4 issued patents from the Australian Patent Office, 5 issued patents from the Canadian Patent Office, 7 issued patents from the European Patent Offices, 6 issued patents from the Korean Patent Office, two issued patents from the Chinese Patent Office, and 1 issued patent from the Indian Patent Office. The company’s U.S. issued patents as of December 31, 2024, are set to expire over a range of years, from November 2028 to August 2041, subject to any extensions. As of December 31, 2024, the company had 50 pending patent applications globally, including 14 non-provisional applications and 2 design applications in the United States, 7 in the European Patent Office, 8 in Japan, 1 Patent Cooperation Treaty (‘PCT’) international application, 5 in Korea, 4 each in Australia and China, 3 in India, and 2 in Canada.
As of December 31, 2024, the company’s trademark portfolio contained the U.S. trademark registrations for the marks MyZIO, ZIO, ZIO SUITE, ZIO AT, and IRHYTHM and pending U.S. trademark applications for the marks KNOW YOUR RHYTHM BY ZIO, KNOW YOUR RHYTHM, and ZIO MCT. It also contained registered trademarks for the mark IRHYTHM in Australia, the EU, Austria, Canada, China, Denmark, Finland, France, Germany, Japan, Italy, Norway, Sweden, Switzerland, and the UK. It further contained trademark registrations for the mark ZIO in Australia, Canada, China, the EU, Japan, Norway, Switzerland, and the UK. It also contained trademark registrations for the mark MYZIO in Canada, the UK, and the EU, trademark registrations for the mark ZIO MCT in the UK and the EU, and trademark registrations for the mark ZIOSUITE in the UK and the EU.
Regulation
The company’s facilities in Illinois, California, and Texas are enrolled in the Medicare program as IDTFs, defined by CMS as entities independent of a hospital or physician’s office in which diagnostic tests are performed by licensed or certified non-physician personnel under appropriate physician supervision.
The company’s business is subject to compliance with these laws. The most significant of these laws for the company’s business include the federal Anti-Kickback Statute (the ‘AKS’) and the federal False Claims Act (the ‘FCA’).
Changes in healthcare policy could increase the company’s costs and subject it to additional regulatory requirements. The Affordable Care Act (‘ACA’) substantially changed the way healthcare is financed by both governmental and private insurers, and significantly impacts the company’s industry.
Because the company develops and manufactures the medical device technology used in the Zio Services (the hardware and software elements that the FDA regulates as ‘devices’), it is subject to extensive and ongoing regulation by the FDA under the Federal Food, Drug, and Cosmetic Act (‘FD&C Act’) and its implementing regulations, as well as other federal and state regulatory bodies in the United States.
The company has registered appropriate facilities with the FDA as a medical device specification developer, manufacturer, or designated complaint handling unit. The company has also obtained a manufacturing license from the California Department of Public Health (‘CDPH’). The FDA and the CDPH have broad post-market and regulatory enforcement powers. The company is subject to unannounced inspections by the FDA and the Food and Drug Branch of the CDPH to determine its compliance with the QSR and other regulations, and these inspections may include the manufacturing facilities of its suppliers.
The company’s business is subject to foreign, federal, and state privacy and security laws concerning the collection, use, analysis, retention, storage, protection, transfer, disclosure, and/or disposal of individually identifiable information, including, without limitation, the General Data Protection Regulation (‘GDPR’), the Health Insurance Portability and Accountability Act of 1996, as amended by the final regulations promulgated pursuant to the Health Information Technology for Economic and Clinical Health Act (‘HITECH’), found in the American Recovery and Reinvestment Act of 2009 (collectively, ‘HIPAA’), the Telephone Consumer Protection Act, the CAN-SPAM Act, and state privacy, consumer protection, and breach notification laws.
The company’s manufacturing operations are subject to regulatory requirements of the FDA’s Quality System Regulation (‘QSR’), the Medical Devices Regulation 2017/745 of the European Parliament and of the Council (‘EU MDR’), the UK Medical Device Regulations 2002 (‘UK MDR’), and the Japanese medical device Quality Management System (‘QMS’). The company is also subject to applicable requirements relating to the environment, waste management, and health and safety matters, including measures relating to the release, use, storage, treatment, transportation, discharge, disposal, sale, labeling, collection, recycling, treatment, and remediation of hazardous substances.
The company’s manufacturing facilities are also ISO certified (EN ISO 13485:2016). The company has registered its device establishments with the FDA and with the UK’s Medicines & Healthcare products Regulatory Agency (‘MHRA’). Additional EU registrations may be sought in 2025 in EU member states by the company’s EU authorized representative as appropriate.
The UK Conformity Assessed (‘UKCA’) requirement became effective on January 1, 2021, and the company has obtained a UKCA mark with the BSI, which also serves as the company’s UK Approved Body, for the Zio XT System and the Zeus System. The company is also registered with the UK’s Care Quality Commission to carry out diagnostic and screening procedures.
Additionally, the EU Notified Body and the UK Approved Body regularly audit the company’s manufacturing, design, and operational facilities to ensure ongoing ISO 13485 and the EU MDR compliance, and periodically audit technical design files in accordance with the EU MDR in order to maintain its CE mark or issue a CE mark or UKCA mark for new or updated devices.
History
iRhythm Technologies, Inc. was founded in 2006. The company was incorporated in the state of Delaware in 2006.
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