A recent warning letter from the FDA may have iRhythm Technologies changing its tune.
The remote monitoring tech maker disclosed its receipt of the letter in a filing (PDF) with the U.S. Securities and Exchange Commission on Tuesday. The May 25 letter sums up the FDA’s findings from an inspection of iRhythm’s facility in Cypress, California, that concluded last August.
According to the company, the letter lays out alleged “nonconformities to regulations for medical devices,” focusing specifically on issues with the reporting practices and quality system standards related to its Zio AT system, an adhesive patch that can be worn for up to 14 days and offers near-real-time heart monitoring to spot arrhythmia events as they occur.
“The company takes these matters very seriously,” iRhythm said in the SEC filing, adding that it “intends to respond within the specified time period and work diligently to address the FDA’s concerns.”
iRhythm didn’t provide specifics about the issues highlighted by the FDA in the letter but noted that it has already begun making adjustments in line with those regulatory concerns, after the FDA detailed its initial observations from the inspection in a Form 483 sent to iRhythm on Aug. 12, 2022.
The devicemaker said it will not only continue working to address the issues highlighted in the original Form 483 but will also start correcting the additional concerns listed in this month’s warning letter—all while staying in contact with the FDA throughout the process.
Even so, iRhythm included a disclaimer that its corrections may not be up to the regulator’s standards. If that’s the case, “additional legal or regulatory action may be taken with or without further notice,” potentially including a mandate to pull the Zio AT system from the market that could take a hit to iRhythm’s bottom line.
Until then, however, because the current warning letter didn’t include any restrictions on the manufacturing, production or shipment of any of iRhythm’s technologies, the company said in the filing that it believes “that its receipt of this warning letter, without further adverse action initiated by the FDA, will not have a material impact to the company’s financial results.”
Currently, according to a recent first-quarter earnings report, iRhythm is hoping to see its revenues grow between 17% and 19% compared to 2022’s haul, for a total that could reach as high as $490 million.
Those predictions represent a slight uptick from the forecast iRhythm issued at the start of the year, which capped the company’s year-over-year growth at 18%.
iRhythm doubled down on that initial forecast as recently as March, as it embarked upon a “business transformation” that included the resignation of Douglas Devine, its chief operating officer, and is estimated to cost the company between $23 million and $30 million throughout 2023. The restructuring plan will “result in the transition or augmentation of staff of certain operations to the Philippines,” and may also include a reworking of iRhythm’s revenue cycle management operations.