Revenue from Irvine-based Masimo Corp.’s noninvasive patient monitoring technologies grew last year by 15% to $798.1 million, and Chief Executive Joe Kiani said the company plans to grow its new telehealth initiative.
“Home is going to be a reality,” he said.
Masimo is expanding its sales force, engineering team and “almost every part of the company,” Kiani said.
“We will overall be growing the team by 10%, adding about 30 to 60 [in Orange County].”
The company employed 4,600 as of March, 690 of them here.
It ranks No. 7 on the Business Journal’s latest public company list, down two spots from a year ago. Shares of the company trade at about $86 for a $4.5 billion market share, down from $93 and $4.7 billion.
Remote Monitoring
Masimo’s expansion into the home frontier is largely driven by the migration of care away from traditional inpatient hospital settings. In the face of health reform, which resulted in a more complex payment structure and lowered reimbursement, home-based care is generally less costly and could help reduce the patient readmission rate by providing post-discharge care. Hospitals are penalized for readmissions with reduced payments.
Masimo received Food and Drug Administration clearance in January for home use of its Rad-97 Pulse CO-Oximeter. The compact, stand-alone monitor is designed for home monitoring. It measures metrics such as pulse rate and the amount of oxygen in the blood.
Though frail patients must now sometimes be sent home faster due to the push for fewer inpatient days, Kiani said devices such as Masimo’s can fill the communication gap and even lead to stronger recovery.
The device allows monitoring of data from a variety of third-party Bluetooth-enabled devices, including thermometers, weight scales and glucometers, to seamlessly transfer information to anywhere in the world. It comes with an optional integrated camera that allows remote clinicians to interact with patients over live audio and video.
Kiani said the product is the first in the category of “telehealth, telepresence and telemonitoring” and that the company plans to grow the vertical with a separate sales team.
He said Masimo will likely launch Rad-97 late this year.
Hospital Automation
Masimo added several major hospital users last year, including Prospect Medical Holdings Inc., a system with 22 hospitals in six states, and Kindred Healthcare Inc., the largest diversified post-acute healthcare provider in the U.S. Kindred operates hospitals, nursing centers and contract rehabilitation services.
The device maker also received significant renewals, including with Kaiser Permanente, Northwestern Memorial Hospital, Henry Ford Hospital and Cincinnati Children’s Hospital.
“Our renewal rate has been over 98%,” Kiani said during a recent earnings call. He pointed out that Kaiser is its biggest customer.
Kiani said the company has over 200 hospital affiliates, which attests to its “breakthrough technology.” He said the next step is to truly “automate” hospitals with more comprehensive systems.
This month, Masimo released UniView, an integrated display of real-time data and alarms from multiple Masimo and third-party devices. It’s designed to reduce clinician information overload in areas involving multiple clinical disciplines, such as in operating rooms and intensive-care units.
UniView brings together data from devices such as patient monitors, ventilators, anesthesia gas machines and IV pumps, and provides a supplementary display in one or more large central monitors so that all clinicians can simultaneously view and act upon the same comprehensive, real-time patient status. The device provides visual alarms based on relayed data from the connected devices.
Kiani said the company is committed to “automating patient care, whether it’s making pulse oximeters accurate when you need that accuracy most, creating new noninvasive monitoring technologies … or unsiloing data, enhancing connectivity and communicating patient data as effectively and efficiently as possible.”
He said the display is the beginning of Masimo “answering clinicians’ calls for logical, clinical transformational cockpits for the collaborative ORs and ICUs of the future.”
Kiani declined to provide details but said there are several products in Masimo’s R&D pipeline.
He’s also founder of the Patient Safety Movement Foundation, an organization trying to reach zero preventable deaths in hospitals by 2020. Open data is a crucial component in making that goal a reality, he said.
“We’ve had now over 90 companies who’ve committed to sharing their data.”
Kiani said the foundation hopes to get companies specializing in intravenous care to join the effort.
International Market
Masimo’s market share got a boost last year when Dutch device company Royal Philips (NYSE: PHG) settled a patent dispute with it. The settlement included a multiyear patient-monitoring partnership wherein Philips promotes Masimo monitoring devices through a joint marketing and sales program in North America and certain markets in Asia and Europe.
Masimo reported fourth-quarter international product revenue grew 14% to nearly $63 million, driven by strong growth in Japan, Europe and Canada. It plans to strengthen its global sales force.
Sales of newer products, including O3 organ oximetry, second-generation SedLine Brain Function Monitoring, and NomoLine capnography, grew 40%.
“Brain health is a huge initiative around the world,” Kiani said.
SedLine got FDA clearance in January.
