CardioNet grabs cardiac testing lab for $23.5M

CardioNet ($BEAT) wants a piece of the cardiac testing laboratory business. The Pennsylvania maker of wireless cardiac monitoring devices will buy cardioCORE Lab for $23.5 million in a cash and stock arrangement. Both sides expect to lose their deal in the 2012 third quarter.

The purchase is as much strategic as practical, CardioNet President and CEO Joseph Capper explained in a statement. He noted that the deal helps the company leverage its wireless monitoring tech "into a large and growing adjacent market." But the purchase also helps CardioNet diversify some of its revenue and reduce risks over reimbursement, with the goal of becoming "a full-service cardiac monitoring company."

CardioNet's Mobile Cardiac Outpatient Telemetry is designed to help diagnose and monitor cardiac arrhythmias. This is clearly complementary with cardioCORE, whose services include centralized ECG, Holter monitoring, ambulatory blood pressure monitoring, echocardiography and statistical analysis. The Rockville, MD-based company also offers cardiac safety and efficacy testing for Phase I through IV and quality testing for clinical trials.

With labs in San Francisco and London, cardioCORE, is expected to produce between $19 million and $20 million in revenue during 2012. The boost will certainly help CardioNet, which reported $119 million in revenue in fiscal 2011, essentially flat from 2010. Net losses hit $61.4 million for the year, up from a $19.9 million net loss in 2010 as the company dealt with restructuring and other one-time charges. For 2012, first-quarter revenue reached $27 million, down more than 20% from the previous year due to lower reimbursement and smaller work volume from physician offices.

At least one large medical device rival has a significant stake in CardioNet's future. Back in 2010, St. Jude Medical ($STJ) invested $60 million to acquire a 19% stake in the company.

- read the release

Suggested Articles

The drug that treats atrial fibrillation, flecainide, has been around since the '80s. Grace Colón, CEO of InCarda, thinks it needs a face-lift.

3M, maker of the ubiquitous Littmann stethoscope brand, has teamed up with Eko to create a new digital version that amplifies sounds and adds AI.

Study data from Medtronic showed more patients reported improvements in their chronic back pain after treatments with the devicemaker’s tiny implant.