iRhythm Prepares for IPO

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iRhthym Technologies has filed an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) for its initial public offering (IPO). The company intends to list its 5.35 million shares in the price range of $13 to $15, with an overallotment option for an additional 802,500 shares. At the maximum proposed price, the offering is valued up to $92.29 million. The company intends to list its shares on the Nasdaq under the symbol IRTC.

The underwriters for the offering are JPMorgan, Morgan Stanley, Canaccord Genuity and BTIG.

This commercial-stage digital health care company is redefining the way cardiac arrhythmias are clinically diagnosed by combining wearable biosensing technology with cloud-based data analytics and machine-learning capabilities.

In the filing, iRhythm described its goal as follows:

Our goal is to be the leading provider of first-line ambulatory electrocardiogram, or ECG, monitoring for patients at risk for arrhythmias. We have created a unique platform, called the ZIO Service, which combines an easy-to-wear and unobtrusive biosensor that can be worn for up to 14 days, called the ZIO Patch, with powerful proprietary algorithms that distill data from millions of heartbeats into clinically actionable information. We believe that the ZIO Service allows physicians to diagnose many arrhythmias more quickly and efficiently than traditional technologies and avoid multiple indeterminate tests. Early detection of heart rhythm disorders such as atrial fibrillation, or AF, and other clinically relevant arrhythmias, allows for appropriate medical intervention and helps avoid more serious downstream medical events, including stroke.

Since receiving U.S. Food and Drug Administration (FDA) clearance in 2009, the company has provided the ZIO Service to over 500,000 patients and collected over 125 million hours of curated heartbeat data, creating what it believes to be the world’s largest repository of ambulatory ECG patient data. This data provides iRhythm with a competitive advantage by informing its proprietary machine-learned algorithms, which may enable operating efficiencies, gross margin improvement and business scalability.

In terms of the finances, revenue was $21.7 million and $36.1 million for 2014 and 2015, respectively, and $15.9 million and $28.6 million for the six months ended June 30, 2015 and 2016, respectively. The company incurred a net loss of $15.8 million, $22.8 million, $9.4 million and $10.6 million for those same periods.

iRhythm intends to use the net proceeds from the offering to expand its sales force and operations, increase research and development activities, conduct or sponsor clinical studies and trials, promote international expansion, and provide for working capital and other general corporate purposes.