CardioNet, Inc. Reports Second Quarter 2009 Financial Results

Business Wire, August 05, 2009

CONSHOHOCKEN, Pa. -- CardioNet, Inc. (NASDAQ:BEAT), a leading wireless medical technology company with an initial focus on the diagnosis and monitoring of cardiac arrhythmias, today reported results for the second quarter ended June 30, 2009.

Highlights and Recent Developments

• Achieved second quarter revenue of $38.3 million, an increase of 30.4%, compared to second quarter 2008
• Experienced 59% increase in MCOTTM patient volume in the first half of 2009 over the prior year
• Sales force currently at 141 account executives, up from 88 at the end of 2008
• Negotiated 24 contracts in the first half of 2009, with over 5 million additional covered lives, bringing total lives covered by MCOTTM to 196.5 million
• Enrolled physician practices increased 42% compared to first half 2008
• MCOTTM was used in a study published in the Annals of Thoracic Surgery which referenced long term monitoring as the standard of care post AF ablation
• To date, 29 clinical studies or abstracts published either demonstrating the efficacy of MCOTTM or utilizing MCOTTM technology to support other clinical research
• Several major institutions adopted CardioNet MCOTTM, such as the Scripps Institute and the Hospital of the University of Pennsylvania
• MCOTTM utilization expanding to neurology and cardiac thoracic surgery
• Enrolled approximately 950 practices in SomNet since its introduction in June
• Achieved second quarter earnings in line with our expectations
• Implemented cost containment measures in light of reimbursement concerns

Chairman, President and CEO Commentary

Randy Thurman, Chairman, President and Chief Executive Officer of CardioNet, commented: “As evidenced by the above business highlights, CardioNet’s MCOTTM system continues to exceed the needs of physicians and patients. We believe the overwhelming acceptance of MCOTTM is convincing evidence of the superiority of the technology and the revolutionary advance in monitoring and diagnosing patients with cardiac arrhythmias. Given the recent events with reimbursement, it is also incumbent on the emerging wireless industry to ensure that the cost/benefit advantages are realized by payors in the form of improved patient outcomes, avoidance of far more costly alternatives and eliminating the progression to more serious disease. We are confident that MCOTTM, coupled with an acceptable outcome on reimbursement, will lead the way in the wireless medicine industry and result in not only superior patient outcomes but also substantial cost savings to the healthcare system.

“During the second quarter, there was continued strong demand for the CardioNet MCOTTM system with a 53% increase in patients over the prior year. We believe this growth is driven by the superior clinical results achieved with MCOTTM and the benefit that it provides to physicians, patients and payors. To drive higher market penetration, we have increased our sales organization to 141 account executives, including individuals focused on the hospital and cardiothoracic surgeon markets. As our new account executives gain experience and penetrate new geographies and market segments, we should continue to see strong volume growth as we introduce more physicians and patients to MCOTTM.

“In late June, we announced we were beginning to experience somewhat lower reimbursement from commercial payors than previously anticipated. We later announced that Highmark Medicare Services notified us on July 10 it plans to reduce the reimbursement rate for mobile cardiac telemetry by 33% on September 1st. We strongly believe this rate is not supported by the facts or the accepted methodologies for establishing reimbursement. The intrinsic value of MCOTTM for patients, physicians and payors is overwhelming. CardioNet is the pioneer in developing and making available this technology for improved patient care. We accept that as the pioneer we are breaking new ground and will need to overcome a “cost” focused reimbursement environment and establish wireless medicine as one of the greatest opportunities to not only improve patient care but also avoid far more costly alternatives. We are aggressively pursuing all potential avenues to establish reimbursement rates at more appropriate levels than those proposed by Highmark Medicare Services. We are working with CMS, commercial payors and policymakers to educate them on the cost of providing the MCOTTM service and the cost savings it generates by more effectively detecting cardiac arrhythmias, thereby improving patient lives and avoiding progression to far more costly medical problems. Until we have resolution on this reimbursement issue, we are not able to provide full year earnings guidance.