Trying to Turn the Page: Investors Focused on Timelines for Zio MCT and Resolution of Overhangs; Key Fundamentals Have Remained Healthy

Research evidence excerpt

Trying to Turn the Page: Investors Focused on Timelines for Zio MCT and Resolution of Overhangs; Key Fundamentals Have Remained Healthy

but acknowledged they do not control the timing and expect engagement might slow seasonally over the

summer. The investigation remains focused on Zio AT and a contained timeframe predating the FDA warning letter. From

discussions, we think that DoJ resolution is a top priority for shareholders and that any resolution would likely be met withDIGITAL a positive stock reaction.

■ Gen 3 algorithm: The Gen 3 algorithm received FDA 510(k) clearance in late May and will be launched alongside Zio MCT

during 1H27. The new algorithm will be implemented across all IRTC systems, is expected to cut technician review time by

nearly half, and is projected to generate >$100M in cumulative value over five years, with management anticipating mostHEALTH of the financial benefits beginning to materialize in years two to three. In regard to why the algorithm is not being released

sooner, we learned that IRTC's systems development team, which is focused on Zio MCT cybersecurity now, would also be

tasked with implementing the new algo. Their time and resources are being prioritized for Zio MCT now and management

expects that once Zio MCT is submitted to the FDA, the team will be able to re-focus on preparing to roll out the algorithm.EQUITY ■ Primary care: Penetration of the primary care physician (PCP) channel remains a significant growth runway, with >40,000

active prescribers today out of an addressable base of up to ~500K U.S. PCPs. Management noted a large salesforce is

not required, with the current strategy of 'landing' via cardiology and 'expanding' downstream into PCPs, supported by a

shift toward investing in key account managers.