startups

How Apple Is Helping This Small-Cap Med Supplier In Wearable Tech


Medical-technology player iRhythm Technologies (IRTC) popped Thursday as analysts suggested the new Apple (AAPL) Watch Series 4 could expand its market in wearable heart-monitoring tech.




X



“Who knew the first trillion-dollar company could do a favor for a small-cap med-tech company?” Canaccord Genuity analyst Jason Mills said in a note to clients. “We would be aggressive buyers of iRhythm on weakness (Wednesday) following the announcement of Apple’s next-gen watch.”

That’s exactly what investors did. On the stock market today, iRhythm stock popped 7.2%, to 96.02, erasing a 6.3% loss on Wednesday. Investors had worried the addition of electrocardiogram monitoring to the new Apple Watch would hurt iRhythm’s opportunity.

Wearable Heart-Monitoring Tech

IRhythm makes a continuously wearable heart monitor called Zio that attaches to a patient’s chest. Cardiologists will prescribe Zio to look for signs of heart disease. An electrocardiogram records the electrical activity of your heart to determine if there are irregularities.

On Wednesday, Apple said it was adding that capability to its newest watch. Mills notes this is the first consumer product to incorporate an electrocardiogram. But Apple’s device only scans for heart patterns within 30 seconds when the user places his or her finger on the digital crown.

“The next-gen watch will also be able to detect low heart rate, and can screen for heart rhythm, with the ability to suggest the presence of AF (atrial fibrillation),” he said. Atrial fibrillation is an irregular heartbeat that can lead to blood clots, stroke, heart failure or complications.

Apple Watch Vs. iRhythm Zio

Apple’s newest watch only provides a brief glimpse into a person’s heart rhythm, whereas Zio can provide 14-day continuous monitoring. This will likely ensure cardiologists prefer Zio over the Apple Watch Series 4, RBC Capital Markets analyst Glenn Novarro said in a note to clients.

“Apple has already admitted that the Apple Watch ‘won’t catch every instance of Afib (atrial fibrillation),’ which is a major disadvantage in the eyes of the cardiologist,” he said.

Further, the Apple Watch doesn’t get insurance reimbursement. But insurance companies covering 290 million patients do reimburse for iRhythm’s Zio, Novarro said.

It’s more likely the Apple Watch will alert patients they have an irregular heart rhythm. This will help lead them to the cardiologist, who may prescribe iRhythm’s Zio for diagnostic testing, he said.

“We believe this expands iRhythm’s market as it would address a group of patients that iRhythm may not have previously reached,” he said. “We continue to believe that iRhythm is one of the most innovative growth companies in medtech.”

Novarro reiterated his outperform rating on iRhythm stock. Canaccord’s Mills boosted his price target on iRhythm stock to 100 from 93, and kept his buy rating.

YOU MIGHT ALSO LIKE:

Chart-Reading Basics: How A Buy Point Marks A Time Of Real Opportunity

Should You Buy A Stock Ahead Of Its Earnings Report?

What Is Inflation, And Why Does It Matter To The Fed — And You?



READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.