iRhythm Technologies, Inc. IRTC has received FDA 510(k) clearance for design changes and enhancements previously made to its Zio AT device. These modifications, submitted via letter to file, ensure the device remains available for shipment within the United States. The clearance follows the first of two submissions made this year, which are part of iRhythm's ongoing efforts to maintain regulatory compliance and service quality.

The Zio AT device is designed for long-term ECG monitoring, capturing both symptomatic and asymptomatic cardiac events in patients aged 18 or older. It helps detect transient symptoms such as palpitations, dizziness, shortness of breath and fatigue. However, it is not intended for use in critical care patients.

The Zio AT device is a prescription-only mobile cardiac telemetry (MCT) system for outpatient cardiac monitoring. It includes the Zio AT patch, which records ECG data for up to 14 days, and a wireless gateway that transmits data to iRhythm's Zio ECG Utilization Software (ZEUS) for analysis using deep-learning algorithms. During the wear period, event transmission reports are generated, followed by a comprehensive final report for physicians to make clinical decisions. The Zio AT services are provided through iRhythm's diagnostic testing facilities in San Francisco, Deerfield and Houston.

Trend of IRTC Stock Following the News

Following the news, shares of IRTC rose 18.2% to $73.40 in after-hours trading.

Shares of IRTC have plunged 42% year to date compared with the industry’s 9.6% fall. The S&P 500 has risen 22.9% in the same time frame.

IRTC’s FDA 510(k) clearance for design updates to its Zio AT device highlights the company's commitment to innovation and quality, sparking positive sentiment among investors. This milestone reflects confidence in iRhythm’s solutions, contributing to the stock's favorable price performance following the news.

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Significance of IRTC’s FDA 510(k) Clearance for Zio AT Design

The FDA clearance underscores iRhythm’s commitment to maintaining high standards of quality, safety, and performance for its Zio AT device. It supports the company’s remediation efforts with the FDA and reinforces trust in the device’s clinical accuracy and reliability. As iRhythm awaits feedback on its second 510(k) submission, this milestone marks continued progress in ensuring patient safety and upholding regulatory requirements in the digital healthcare space.

The Zio service has been validated in over 100 scientific studies, demonstrating high patient compliance (98%) and minimal data noise. Its patient-centered design, requiring no manipulations, enhances compliance. Physicians agree with the comprehensive end-of-wear reports 99% of the time, further underscoring its clinical value.

Market Prospects Favoring IRTC

Per a report in Precedence Research, the global mobile cardiac telemetry systems market size was worth $1 billion in 2022. It is anticipated to reach $2.3 billion by 2030 at a CAGR of 12.1%. 

The robust growth is likely to be driven by physical inactivity due to a sedentary lifestyle coupled with tobacco smoking and obesity, the prevalence of cardiovascular disorders and favorable government initiatives.

Recent Developments at iRhythm Technologies

Last month, iRhythm Technologies gained regulatory approval from Japan's PMDA for its Zio 14-day, long-term continuous ECG monitoring system. The Zio system, consisting of a wearable patch and AI-powered ZEUS software, offers superior diagnostic accuracy for detecting cardiac arrhythmias compared to traditional Holter monitoring. The system aims to improve clinical efficiency and reduce misdiagnoses through AI-driven analysis and comprehensive reports.

In August, iRhythm Technologies commercially launched its Zio monitor and long-term continuous ECG monitoring service in Austria, the Netherlands, Spain, and Switzerland. Following CE Marking under the EU Medical Device Regulation in December 2023, the Zio system provides up to 14 days of continuous ECG monitoring, a significant improvement over the traditional 24- to 48-hour Holter monitoring.

Zacks Rank & Key Picks

Currently, iRhythm Technologies carries a Zacks Rank #3 (Hold).

Some top-ranked stocks in the broader medical space are Addus HomeCare ADUS, Quest Diagnostics (DGX) and RadNet (RDNT). While Addus HomeCare sports a Zacks Rank #1 (Strong Buy), Quest Diagnostics and RadNet carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Addus HomeCare has an estimated long-term growth rate of 12.1%. ADUS’ earnings surpassed estimates in each of the trailing four quarters, with the average being 11.5%.

Addus HomeCare shares have rallied 85.5% compared with the industry's 16.9% growth year to date.

Quest Diagnostics has an estimated long-term growth rate of 6.8%. DGX's earnings surpassed estimates in each of the trailing four quarters, with the average being 3.3%.

Quest Diagnostics has gained 42% compared with the industry's 14.9% growth year to date.

RadNet’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 98.2%.

RDNT's shares have surged 93.7% year to date compared with the industry’s 14.8% growth.

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