iRhythm Raises 2022 Revenue Guidance After Record Second Quarter Enrollments – MedTech Dive | Hot Mobile Press

Based on the numbers

Revenue Q2: $102.1M

25.6% more than in the previous year

Gross margin: 68.8%

Up 0.8 percentage points year-on-year

Revenue guidance for 2022: $415 million to $420 million

From a range of $410 million to $420 million

iRhythm Technologies grew second-quarter revenue nearly 26% year over year, driven by rising user registrations, prompting the company to raise its full-year revenue guidance.

CEO Quentin Blackford said in an after-market earnings call on Thursday that the company had a record number of registrations last quarter despite a “challenging market environment.” New account openings are up 22% compared to the first quarter of 2022, he said.

Expanding to new prescribing sites, such as general practitioner offices, helped boost the number of devices sold in the quarter, Blackford said, a strategy the company plans to expand.

Primary care physicians are showing more interest in using iRhythm’s heart monitors in their offices, and insurers have told the company they see this trend growing, he added.

“We have a strong belief that the primary care space is opening up and we are seeing that confirmed with our new account openings where there is an increasing mix coming from this primary care channel,” Blackford said. “It validates our belief, our thesis, that this will be a significant space for us in the future.”

While individual GP practices have fewer cardiac patients than cardiology practices, there are more GP practices.

Analysts at William Blair estimated in a July note that up to 12 million patients a year in primary care could be eligible for cardiac monitoring.

“This is greater than iRhythm’s estimate of more than 8 million patients and more than double the current market of 5.6 million annual tests, indicating a significant long-term market for cardiac monitoring, although admittedly iRhythm needs to drive market development to to unlock its full potential,” the analysts wrote.

The heart monitor maker grew 25.6% year over year to $102.1 million last quarter. Still, iRhythm reported a net loss of $23.9 million, compared to $17.4 million in the same quarter last year.

iRhythm raised the low end of its 2022 revenue guidance by $5 million, raising it to a range of $415 million to $420 million, compared to a previous range of $410 million to $420 million. The new guidance reflects annual growth of 29% to 30%.

The stock price rose 3.5% to nearly $159 as of Friday morning.

Douglas Devine, iRhythm’s CFO and chief operating officer, told investors that despite the increase in revenue guidance due to healthcare staffing shortages, third-quarter volume is expected to be flat compared to the second quarter. High levels of patient and provider furloughing, meanwhile, could also slow prescriptions and new accounts, he added.

Blackford also said the company is already seeing the typical slowdown in the summer months.

As iRhythm continues to transition claims processing through National Government Services (NGS), a regional Medicare rate setter, the company expects a $7 million revenue benefit from the move in the second half of the year, which is roughly evenly distributed in the third and fourth quarter is distributed. to Devine.

NGS, a Medicare Administrative Contractor (MAC) serving the Chicago suburb, updated its rates in May to about $100 more than Novitas Solutions, iRhythm’s primary MAC. iRhythm said at an earnings call in May that it will begin transferring Medicare claims to be processed through NGS to take advantage of the higher rates, a move after a pricing saga that plagued the company throughout 2021 Has.

iRhythm is also awaiting a final fee schedule for Centers for Medicare and Medicaid Services physicians, which will be available in late 2022. CMS proposed national tariffs for cardiac monitoring services, potentially ending years of effort for iRhythm.

Blackford said the agency’s pricing data implies payment rates between $207 and $295 in the regions where iRhythm files Medicare claims. The CEO added that there will be “insignificant impact” on the company’s total average selling price in 2023 compared to 2022.

The company also announced that it will hold an Investor Day event on September 21.

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