St. Jude Medical reinvests in iRhythm Technologies

St. Jude Medical’s partnership with a California-based arrhythmia-diagnostic company seems to be going well enough […]

St. Jude Medical’s partnership with a California-based arrhythmia-diagnostic company seems to be going well enough that it recently poured more money into that startup.

In May 2010, the Little Canada, Minnesota-based company signed a co-branding and co-marketing relationship with San Francisco-based iRhythm Technologies Inc. and was the lead investor in iRhythm’s $10 million equity round. Last week, iRhythm raised another $15 million with a new lead investor, New Leaf  Venture Partners, but existing investors, which includes St. Jude Medical, also participated.

IRhythm makes the Zio Patch, a single-use, water-resistant, continuous cardiac rhythm monitoring device that can be worn for up to 14 days. It is meant to be an early diagnostic tool for patients who do not have symptoms of cardiac arrhythmia, or suffer from transient symptoms such as palpitations, dizziness, light-headedness, among others.

A St. Jude Medical spokeswoman would not disclose how much St. Jude has invested, but did acknowledge that the year-long partnership ” so far it has been a positive relationship” for both companies.

“Over the last year, we have conducted a phased roll-out of the iRhythm technology and expect to continue making it available to more accounts in the coming months,” said Amy Jo Meyer, in an email.

In a phone interview, iRhythm President and CEO William Willis, said the Zio Patch removes all the encumbrances of a traditional cardiac monitoring device and is simple and easy to use by patients. The Zio Patch has two adhesive discs that surround the electrodes that receive and store the electric signals; those electrodes don’t need to be changed and there are no batteries to change either.

“There are no wires, which there are with all other products, and it’s in a water-proof casing,” Willis added. “With all other products, patients have to take them off when they bathe. They have to take all of the apparatus off and then have to reconnect them. Again, with our product, it doesn’t require that.”
Willis contends that because of this, patient compliance is high — near 100 percent — compared to competing devices in the marketplace that are at about 50 percent, he said.

What’s more, patients can benefit from knowing that they are the first and the last person to ever use the device. After the monitoring period is over and the product is sent back to the company for data processing, the Zio Patch is broken down and all its parts recycled.

In fact, its innovative design led the judges of the Medical Design Excellence Awards to award the Zio Patch a silver award last year. It was one of 39 products recognized in this global competition for design excellence. It weighs less than 2 ounces.

But the Zio Patch is not merely about wonderful design, ease of use and high-patient compliance, Willis said. The technology also demonstrates clinical efficacy.

“It has the capacity to store up to 14 days of ECG, measuring every heartbeat and storing every heartbeat, and it samples 200 times a second,” Willis explained. “So, in theory, in 14 days we store about 2 million heartbeats.”

Other devices in the market can continuously monitor for up to 30 days (and indeed Zio has another product called the Event Card, which does that), but they store the data only when the patient indicates he is experiencing symptoms of abnormal heart rhythm and has electrodes and wires. (Zio Event Card is also 100-percent recyclable like the Zio Patch, according to the company’s website.)

The ultimate goal is early detection of abnormal heart rhythm, Willis said. Currently, cardiologists and electrophysiologists diagnose such conditions, but Willis hopes that the Zio Patch can move the process upstream to the offices of a primary care physician or a family practitioner in the future.

For now, the partnership with St. Jude Medical has helped to open a door in the former category of EPs and cardiologists.

“Traditionally, much of the diagnosis has been done with electrophysiologists and cardiologists, and through the St. Jude partnership, we are able to deliver our product and service into their large and broad client base,” Willis said.

Willis declined to reveal the exact commercial terms of the agreement, but did acknowledge that it does not preclude iRhythm from seeking other distribution channels. He said that the real aggressive commercial launch of the Zio Patch products occurred in the last six months after a deliberate and slow start following U.S. Food and Drug Administration approval in May 2009. The company has grown “exponentially” and now has 120 employees.

Although he declined to talk about revenue or profitability, Willis said several medical technology companies have approached the company with the intent to buy it. But there are no plans, at least now, to sell.

“We have been approached by several entities and we continue to be approached, but we fundamentally feel that the company is young,” Willis declared. “We’ve just begun commercializing more vigorously really in the last six months and we believe the company has a number of different opportunities with further product development from our product platform Zio Patch.”

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