Resuscitation devices maker ZOLL Medical (ZOLL) has achieved another major milestone for its flagship LifeVest wearable defibrillator as the device has been prescribed to over 40,000 patients at high risk of sudden cardiac arrest (“SCA”) by their physicians.
Moreover, LifeVest has been reportedly prescribed at all the top hospitals in each of the 52 metropolitan areas in the U.S. The achievement underscores the sustained adoption of the device for treating SCA.
SCA, an abrupt loss of cardiac function, 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 is a lightweight device which is worn outside the body (rather than implanted in the chest) by patients at risk of SCA. The device continuously monitors the heart with electrodes (electric conductors) to detect life threatening heart rhythms. On detection of abnormal rhythm, LifeVest sends an electric shock to the heart to restore its normal rhythm.
The LifeVest business, which has been ZOLL Medical’s lifeblood, is growing at a solid quarterly run rate with revenues propelling 60% year over year in the most recent quarter. Increased awareness, associated sales force enhancements and wide reimbursement coverage are supporting the device’s uptake.
ZOLL Medical is a leading player in the global market for external defibrillators, which is worth more than $1 billion. In the U.S. defibrillation market, the company competes with Physio-Control, a wholly-owned unit of Medtronic (MDT), and Philips (PHG). ZOLL Medical is expanding its product range to sustain growth in this market.
ZOLL Medical’s solid fundamentals, its broad product range, healthy revenue/margin mix and upbeat prospect for LifeVest remain encouraging. Moreover, its significant international presence should also drive growth.
However, the company operates in a highly competitive defibrillation market. Moreover, the North American emergency medical services (“EMS”) market remains sluggish due to budget constraints with lack of visibility for material improvement in the near-term. Currently we are Neutral on the stock.
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