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Conshohocken-based CardioNet, a pioneer in telemetry-based cardiac monitoring, announced a proposed major corporate reorganization along with its quarterly earnings announcement on Monday. Pending shareholder approval, it will adopt a holding company structure and change its corporate name to BioTelemetry, Inc. CardioNet and acquisitons Cardiocore and Braemar will become operating subsidiaries of BioTelemetry. BioTelemetry will continue to trade on the NASDAQ under the symbol "BEAT".
CardioNet CEO and President Joseph H. Capper said in a statement: “Qur strategy is to achieve sustained long-term growth by solidifying our leadership position in remote cardiac monitoring; building a leading research services business; and identifying markets that would benefit from the application of our wireless platform and proprietary technology. As a result, we recently launched a more comprehensive sales approach in our patient services business and acquired Cardiocore in order to expand our research services capabilities. Simultaneously, we have built an operational infrastructure capable of sustained growth in several areas of the developing mobile health services market. Consequently, we expect to derive economic and functional benefits through the alignment of our adjacent businesses, each with distinct brand equity, under this holding company structure."
Although Capper was not very specific during the earnings conference call (free registration required for transcript) in identifying the markets BioTelemetry might expand into under its new structure, the implication is that it plans to move beyond cardiac monitoring into other areas of remote health monitoring, as well as expanding research applications for the patient data it collects. In this sense, it is possible CardioNet's strategy may begin to look more like that of Sotera Wireless, a California-based venture that Safeguard Scientifics took a 7.7% stake in earlier this year as I wrote about here.
Dr. Eric Topol, the cardiologist and leading wireless healthcare technology pioneer who is now Chief Academic Officer of Scripps Health and serves on Sotera Wireless' board, was the first physician to serve on CardioNet's Medical Advisory Board in 1999, although to the best of my knowledge he no longer has a connection to CardioNet.
CardioNet, which did an IPO in 2008 and moved to Conshohocken from San Diego, has since suffered due to reimbursement rate cuts by payers and questions by some about the value of its services. It has since recovered somewhat and is showing revenue growth again, although its still losing money. BEAT closed today at $2.76, well down from its 2008 post-IPO high of $34.50.