Laguna Hills-based Applied Cardiac Systems Inc. aims to streamline how irregular heartbeats are treated through a new device that’s the size of an iPhone, costs $2,000 and links diagnostic data to medical personnel in real time.
Applied makes a number of devices to treat atrial fibrillation, which is the most common form of irregular heartbeat. It also licenses software for detection of irregular heartbeats to hospitals and medical groups.
Its products include the Holter monitor, which monitors electrical activity in the heart.
Applied now has sales of about $14 million annually. It’s pinning hopes for significant growth on its new product, called Core.
Core is an example of a recently established field called telemedicine, which involves transferring medical information via interactive audiovisual media for remote examinations and diagnoses.
Core is awaiting a final regulatory decision from the Food and Drug Administration and could be introduced in May.
It’s “the bridge from the now to the tomorrow,” said Loren Manera, Applied’s chief executive and major shareholder.
A Core device is worn on the hip and can be used for three different types of patient monitoring: immediate EKGs, mid-range Holter monitoring and a longer-term monitor that works up to 30 days and automatically detects abnormalities in the heart.
Once irregularities are detected, Core sends signals to a receiving station that relays them to the patient’s doctor.
“Its intent is to try to give the physician a better understanding over the long haul as to what are the abnormalities you may be experiencing,” Manera said. “It’s the only device that provides all three methods for detecting atrial fibrillation.”
• Headquarters: Laguna Hills
• Business: devices to treat artrial fibrillation
• Projected 2011 revenue: $14 million
• Notable: awaiting FDA approval on mobile heart monitor
Market
The market for mobile cardiac telemetry is estimated at $350 million domestically. Researcher Markettrends.com estimates that the market will grow to $4.1 billion globally by 2014.
Applied believes such growth is coming because there are some 81 million Americans who are living with one or more types of heart diseases, including atrial fibrillation.
Core came about through a late 2009 partial joint venture with eCardio Inc., another privately held company out of Texas
Applied worked with eCardio because it needed “additional resources” to bring the monitor to market, Manera said. It holds key patent rights on the device.
As part of the Core rollout, Applied plans to introduce what it calls “Core Centers,” which will attempt to connect services offered by primary care doctors, internists and cardiologists with regional and community hospitals.
The company plans to raise $5 million in a private placement to help pay for the rollout.
Applied also is prepared to build labs for customers, Manera said.
A lab would mean that an average regional or community hospital could see as much as $325,000 of Core Center revenue a month based on billings for 500 EKGs, 300 Holter monitor procedures and 400 mobile cardiac outpatient procedures, according to Applied.
“Eventually, telemedicine is going to be part of the healthcare solution worldwide for bringing down costs and maximizing patient care,” Manera said.
Applied has about 20 people selling its devices to doctors and hospitals. Salespeople call on both existing customers and seek new ones.
Applied does some things that aren’t typical of privately held companies, including making detailed financial information public.
For 2011, Applied said it expects a pretax profit of $982,460 on this year’s expected revenue of $14 million. That estimate includes a projection of $4.9 million from the Core Centers.
The company projects a pretax profit of $2.5 million on sales of $25.2 million in 2012.
Independent
Manera said there are no plans to take Applied, which was established in 1981, public or to sell to a larger device maker. Applied has been approached by interested larger companies, but has elected to stay independent and use its base to try and grow on its own, he said.
Other companies that are involved in monitoring include Conshohocken, Pa.-based CardioNet Inc.
Manera said Core is the only device that can provide three key cardiac measurements.
Applied has about 50 workers.
The company makes its devices locally and has a research and development group that is looking to apply its technology to other types of monitoring, including sleep, blood glucose and blood pressure, said Manera, who has been with Applied since 1990.
