Resuscitation devices maker ZOLL Medical’s flagship LifeVest wearable defibrillator has achieved another key milestone as it has been reportedly prescribed by physicians at all of the 17 “Honor Roll” hospitals and all of the 50 “Best Cardiology and Heart Surgery” hospitals designated by U.S. News and World Report for 2011-2012. The Massachusetts-based company has achieved this milestone for the fourth consecutive year.
U.S. News and World Report ranks America’s “Best Hospitals” through evaluation of thousands of hospitals based on 16 medical specialties. In the latest ranking, 4,825 hospitals were considered of which 140 were ranked in one or more of the 16 specialties. Just 17 of these hospitals were qualified for the “Honor Roll” designation.
LifeVest is a light weight device which is worn outside the body (rather than implanted in the chest) by patients at risk of sudden cardiac arrest (“SCA”), an abrupt loss of cardiac function. SCA is one of the major causes of unexpected deaths. According to the American Heart Association, more than 700 people die from this condition each day in the U.S. Early defibrillation raises the chance of survival from just 5% to over 50%.
LifeVest continuously monitors the heart with electrodes (electric conductors) to detect life threatening hearth rhythms. On detection of an abnormal rhythm, the device sends an electric shock to the heart to restore its normal rhythm. LifeVest has an impressive 98% first treatment shock success rate for resuscitating patients with SCA.
The LifeVest business, which has been ZOLL Medical’s lifeblood, is growing at a solid quarterly run rate with revenues propelling 67% year over year in the most recent quarter. Increased awareness, associated sales force enhancements and wide reimbursement coverage are supporting the device’s uptake. LifeVest has been prescribed to over 45,000 patients at high risk of SCA by their physicians.
ZOLL Medical is a leading player in the global market for external defibrillators, which is worth more than $1 billion. The company is expanding its presence in the international markets, representing a major impetus for growth.
In the U.S. defibrillation market, ZOLL Medical competes with Physio-Control, a wholly-owned unit of Medtronic (MDT - Analyst Report), and Philips (PHG - Analyst Report). The company remains committed to expanding its product range to sustain growth in this market. We are currently Neutral on the stock.