Irhythm Holdings, Inc. · NASDAQ:IRTC

Irhythm — iRhythm Technologies — Investor Day (September 2022)

133 slides from Irhythm's investor day presentation, Sep 21, 2022

Slide 1: 2022 Analyst & Investor Day
2022 Analyst & Investor Day September 21, 2022
Slide 3: Safe Harbor
Safe Harbor Certain data in this presentation was obtained from various external sources, and neither iRhythm extent to which any factor, or combination of factors, may cause actual results to differ materially from those Technologies, Inc. (“iRhythm” or the “Company”) nor its affiliates or represen
Slide 4: Agenda
Agenda Strategy for Stakeholder Value Creation Quentin Blackford Clinical Innovation Mintu Turakhia, MD, MAS A Foundation for Growth: Core U.S. Business Chad Patterson Expansion into International Markets Sandrine Moirez Q&A 15-minute break Introducing: Know Your Rhythm Sara Bender A Look Forward: B
Slide 5: Presenters
Presenters QUENTIN BLACKFORD MINTU TURAKHIA, MD, MAS CHAD PATTERSON SANDRINE MOIREZ President & CEO Chief Medical Officer & Chief Commercial International Chief Scientific Officer Officer General Manager SARA BENDER MARK DAY DOUG DEVINE BRICE BOBZIEN Chief of Staff Chief Technology Officer Chief Ope
Slide 6: Strategy for Stakeholder Value Creation
Strategy for Stakeholder Value Creation QUENTIN BLACKFORD President and Chief Executive Officer © 2022 iRhythm Technologies, Inc. 6
Slide 7: 5+ Million Patients served, ~1.5 Million, 1 Billion hours
5+ Million >30% Patients served Five-year revenue CAGR ~25% ~1.5 Million Penetration in core Patients served U.S. ambulatory cardiac annually and growing monitoring market a 35+ 66 Peer-reviewed Countries and states where we publications have employees 1 Billion Hours of curated 1,600+ ECG data Glob
Slide 8: iRhythm's track record of success
Five-year revenue CAGR: 33% iRhythm’s track record of success 1,500,000 1,300,000 Proven ability to commercially launch innovative products and services as well as repeatedly grow market share 1,000,000 800,000 Consistent, steady volume growth has 600,000 enabled high-growth revenue generation $417,
Slide 9: Addressing the future focus of healthcare
Addressing Expanding the future focus existing markets of healthcare while extending into adjacent markets Out-paced Delivering revenue growth meaningful from massive improvements in underpenetrated financial profile markets on a global scale
Slide 10: Compelling investment thesis for value creation
Compelling investment thesis for value creation MARKET EXPANSION OPERATIONAL IMPROVING OPPORTUNITIES INNOVATION EFFICIENCY FOCUS FINANCIAL PROFILE Core US market penetration Relentless patient focus Commitment to quality, safety and Focus on generating leverage regulatory compliance Greenfield speci
Slide 11: The Zio platform enables us to address the challenges of tomorrow
The Zio platform enables us to address the challenges of tomorrow 1 2 3 PATENTED WEARABLE AI PLATFORM ACTIONABLE AND SCALABLE BIOSENSORS (34-LAYER DEEP NEURAL NET) DIGITAL PLATFORM Single-use monitor that 2nd Generation, FDA-cleared, High-quality digital patients prefer deep-learned report delivered
Slide 12: Vision and Mission
Vision Better Data, Better Insights, Better Health for All. Mission Boldy innovating to create trusted solutions that detect, predict and prevent disease.
Slide 13: Substantial and growing market potential
Substantial and growing market potential Massive TAM today…. ….With significant market expansion International markets Adjacent markets At-risk undiagnosed UK market (0.5 M) Symptomatic initial Symptomatic diagnosis U.S. market (5.6 M) See appendix for sources © 2022 iRhythm Technologies, Inc. 13
Slide 14: Significant market opportunity will lead to meaningful value creation over next five years
Significant market opportunity will lead to meaningful value creation over the next five years GLOBAL NET REVENUE GROSS PROFIT MARGIN ADJUSTED EBITDA (USD, MILLIONS) MARGIN 20% CAGR +450 bps +1,850 bps $1,000+ 73% 15% 69% $418 $323 66% -11% -3% 2021A 2022G 2027E 2021A 2022G 2027E 2021A 2022G 2027E 2
Slide 15: Significant adjacent market opportunities
Significant adjacent market opportunities UNDIAGNOSED ARRY THMIAS SLEEP APNEA HEART FAILURE HYPERTENSION 2022 estimated at-risk1: 12M Prevalence: ~30M Prevalence: ~6M Prevalence: ~130M Estimated 20% of Medicare- Up to 80% of AFib patients 25% of heart failure patients Up to 90% of AFib patients elig
Slide 16: Introducing the program for early detection of heart arrhythmias
INTRODUCING The ground-breaking program for early detection of heart arrhythmias. © 2022 iRhythm Technologies, Inc. 16
Slide 17: Driving efficiencies through operational discipline
Driving efficiencies through operational discipline Improving unit cost economics PLAN G&A efficiencies and leverage Globalization IMPROVE & BUILD & ADJUST INTEGRATE Automation and digital transformation ~$250 million1 in anticipated MEASURE OPERATE gross annual savings by 2027 1. Net of non-cash op
Slide 18: Strategic portfolio management will fuel future growth opportunities
Strategic portfolio management will fuel future growth opportunities Partnership and business development themes DATA 1. COMMERCIAL ACQUISITIONS OR Investments will be prioritized that accelerate PARTNERSHIPS LICENSING growth in alignment with strategic vision 2. Opportunities will be evaluated base
Slide 19: Committed to sustainable and responsible growth
Committed to sustainable and responsible growth ENVIRONMENTAL PATIENT AND ROBUST GOVERNANCE RESPONSIBILIT Y COMMUNIT Y SUPPORT STRUCTURE Key environmental approaches Patient safety Executive Leader with oversight include reuse and recycling of ESG, ERM and DEI Customers’ access to Innovative design
Slide 20: Differentiated Data Sets, Clinical Distinction, Operational Excellence
Clinical Operational Distinction Excellence First-to-market leader Advancing profitable with best-in-class report core business with focused and clinical evidence investments in growth Building a healthcare Building infrastructure company of the future to support next phase through physician- and of
Slide 21: Clinical Innovation
Clinical Innovation MINTU TURAKHIA, MD, MAS Chief Medical Officer and Chief Scientific Officer © 2022 iRhythm Technologies, Inc. 21
Slide 22: Vision and Mission
Vision Better Data, Better Insights, Better Health for All. Mission Boldy innovating to create trusted solutions that detect, predict and prevent disease. © 2022 iRhythm Technologies, Inc. 22
Slide 23: iRhythm's first mover advantage
iRhythm’s first mover advantage PAST PRESENT FUTURE FIRST-TO-MARKET IN SCALE AND ADAPT LEVERAGE DATA ADDRESSING UNMET TO LEAD THE LONG-TERM AND AI TO REDEFINE CLINICAL NEED CONTINUOUS MARKET THE MARKET Hardware Hardware Artificial Intelligence (AI) IDTF Services IDTF Services Analytics Software Soft
Slide 24: Clinical priorities aligned to an evolved model of care delivery
iRhythm’s clinical priorities are aligned to proactively address fundamental shifts towards an evolved model of care delivery MARKETPLACE CLINICAL INNOVATION TODAY PRIORITIES Many fast followers (most are small) Enhance core products Crowded, noisy, landscape Augment clinical evidence Health care de
Slide 25: Priorities for scientific and clinical innovation
Priorities for scientific and clinical innovation to unlock long-term value ENHANCE AUGMENT EXPLORE AND ENTER LEVERAGE CORE PRODUCTS CLINICAL EVIDENCE ADJACENCIES DATA SCIENCE AND AI Iterate on Zio set or products Continue generating high-value, Further differentiate Leverage our data and capabiliti
Slide 26: The Zio Service delivers superior clinical accuracy while reducing cost of care
The Zio Service delivers superior clinical accuracy while reducing the cost of care PATIENT PHYSICIAN & STAFF CLINICAL COST OF CARE EXPERIENCE SATISFACTION OUTCOMES 98% patient compliance1,2 83% diagnostic yield within 2.6X greater detection of AFib vs Expedited patient care while fourteen days of m
Slide 28: iRhythm's approach to clinical science
iRhythm’s approach to clinical science EARLY CLINICAL Gain early data for commercial path and FDA clearance that are aligned EVIDENCE to use cases and workflow DEMONSTRATE Pre- and post-market efforts to show clinical superiority and value, ZIO CLINICAL INNOVATION VALUE including health outcomes and
Slide 29: iRhythm engages with top academic centers and KOLs globally
iRhythm engages with top academic centers and KOLs globally UNITED STATES UNITED KINGDOM GERMANY © 2022 iRhythm Technologies, Inc. 29
Slide 30: Robust and growing body of clinical evidence
Robust and growing body of clinical evidence ABSTRACTS PRESENTED AT GLOBAL CONGRESSES MANUSCRIPTS PUBLISHED IN GLOBAL JOURNALS 19 45 18 17 13 13 32 12 Original Research 28 28 11 Review 8 18 6 5 11 4 9 7 7 6 2 3 1 1 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2011 2012 2013 2014
Slide 31: Key 2022 congresses displayed diverse and impactful data
Key 2022 congresses displayed diverse and impactful data INTERNATIONAL AMERICAN HEART JAPANESE EUROPEAN HEART RHYTHM AMERICAN STROKE COLLEGE OF RHYTHM HEART RHYTHM SOCIETY OF SOCIETY – HEART CONFERENCE CONFERENCE CARDIOLOGY SOCIETY SOCIETY CARDIOLOGY DIGITAL HEALTH ASSOCIATION (ICS) (ACC) (HRS) (JHR
Slide 32: Recent peer-reviewed publications
Recent peer-reviewed publications STUDY MANUSCRIPT INSTITUTION AUTHORS JOURNAL STATUS SIGNIFICANCE Reducing stroke by screening for Undiagnosed atrial fibrillation Trial Design and in elderly inDividuals (GUARD-AF): Rationale and Design of the Published July GUARD-AF BMS / Pfizer Daniel Singer MD Am
Slide 33: Active pipeline of studies and research proposals
Active pipeline of studies and research proposals KEY STUDY AREAS # OF ACTIVE STUDIES Arrhythmia Research At Risk Population 7 STUDIES WELL DISTRIBUTED ACROSS PIPELINE Atrial Fibrillation 6 Covid 6 New Technology/R&D 5 Silent Atrial Fibrillation 4 Enrolling Heart failure / Hypertrophic cardiomyopath
Slide 34: Pursuing New Indications
Pursuing New Indications Primary Target: Undiagnosed Atrial Fibrillation (AFib) © 2022 iRhythm Technologies, Inc. 34
Slide 35: Growth of Atrial Fibrillation Prevalence
Growth of Atrial Fibrillation Prevalence 2030: 7.00 5-12M 2017: Adults with AFib (millions) 5.25 3-5M 2009: 2.23M 1995: 3.50 1.8M 1.75 Projections of AFib prevalence in the U.S. 0.00 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 1. Go AS. JAMA. 2001 2. Miyasaka Y. Circulation 2006 3. N
Slide 36: Direct medical costs for patients with undiagnosed AFib are significant
Direct medical costs for patients with Total incremental cost burden from undiagnosed AFib in the U.S.: undiagnosed AFib are significant $3.1 B (in 2014 dollars) Undiagnosed AFib estimates ≥65 years from five pooled claims datasets: Total Non-CV $409.6 Total AFib $1.3 B 18-64 years $1.1 B $697.4 CON
Slide 37: If you look for Afib, you will find it
If you look for Afib, you will find it….especially in the ≥65 population Irregular pulse notifications, according to age and sex: of 419,000 patients enrolled, 0.5% received notification2,3 n=2,100 AFib incidence at one year: • 6.3% of monitored • 2.3% of controls Now powered for difference in outco
Slide 38: Prevalence of atrial fibrillation will only increase in the future
Prevalence of atrial fibrillation will only increase in the future with aging population and lifestyle-related comorbidities Incidence of AFib rapidly rising (2006-2018)1 Millennials are less healthy than age-matched Gen Xers2 Standardized Atrial Fibrillation Incidence Rates From 2006 to 2018, CONDI
Slide 39: Identifying and treating AFib early is critical to better outcomes
Identifying and treating AFib early is critical to achieving better outcomes for patients, providers and payers Early rhythm-control therapy Incidence of death from cardiovascular Death or hospitalization associated with a lower risk of adverse causes, stroke, or hospitalization reduced for worsenin
Slide 40: Silent AFib market development will move forward via risk-sharing model
Silent AFib market development will move forward via risk-sharing model Clinical evidence continues to build supporting payor value proposition and clinical guidelines SCREENING TRIALS CLINICAL GUIDELINES Cost-Effectiveness Of AF Screening With 2-Week 2020: Opportunistic screening for AFib EUROPEAN
Slide 42: Most consumer devices are pre-diagnostics and not approved for AFib diagnosis
Most consumer devices are “over-the-counter” pre-diagnostics and are not approved for AFib diagnosis or management Consumer wearables popularity has driven increasing public awareness around atrial fibrillation Uptake of consumer devices should continue to provide tailwind, driving more patients to
Slide 43: Landscape of AFib and syncope monitoring solutions
Landscape of AFib and syncope monitoring solutions LONG TERM TRANSMITS BACKGROUND CONSUMER IMPLANTABLE CONTINUOUS WEAR TIME AFIB MONITORING WITH WEARABLES DEVICES MONITORS DATA CONFIRMATION 1. Irregular rhythm notification PPG with background AFib detection Event-recording. Non-continuous. DATA (not
Slide 44: ZEUS System well-positioned to address unmet needs
Clinically-focused ZEUS System well-positioned to address unmet needs for long-term and noninvasive monitoring solution POTENTIAL MID- TO LONG-TERM MONITORING TIMING AND USE CASES UNDER CONSIDERATION NEXT STEPS AFib indications Ongoing evaluation of use cases, business models and New AFib, establish
Slide 45: Data Science, AI, and New Technologies
Data Science, AI, and New Technologies © 2022 iRhythm Technologies, Inc. 45
Slide 46: Data science hierarchy needed to leverage AI
iRhythm has all aspects of the data science hierarchy needed to leverage AI for core product enhancement and future product iterations Clinical Evidence AI, Deep Learning A/B testing, Experimentation, LEARN/OPTIMIZE Simple ML Algorithms Moving up the pyramid requires data, expertise, Analytics, Metr
Slide 47: Comprehensive EHR integration with bidirectional data flow
Comprehensive EHR integration with bidirectional data flow enhances physician workflow efficiency Hospital Cloud EHR system Staff/Ordering MA updates order Order Physician places on EHR and (ORM) Interface order in EHR patches patient Engine Proprietary AI Physician Report published in Results/Repor
Slide 48: Data linkages create opportunities for prediction and prevention
Data linkages create opportunities to develop prediction and prevention Zio XT/AT Patch Data Claims Data Sources (> 5 million) Inpatient/Outpatient/Drug/Cost Death Structured report data Continuous signal Records Annotations (symptoms) Electronic Health Record Data STRUCTURED DATA UNSTRUCTURED DATA
Slide 49: Data and EHR integration can enable augmentation of products
Data and EHR integration can enable augmentation of existing products as well as new technologies AFib, Ejection arrhythmia fraction. detection risk of AFib MEASUREMENT Known Paroxymsal Cardiomyopathy, AFib, sleep apnea, HTN, coronary disease, chron exertional + otropic incompetence, sleep-related c
Slide 50: Adjacent market opportunities: discovering the possible
Adjacent market opportunities: discovering the possible for value creation SLEEP APNEA • Estimated U.S. prevalence of 30 million Condition Prevalence within AF Patients • Up to 80% of AFib patients have sleep apnea • Large prevalence of undiagnosed sleep apnea with Atral poor convenient diagnostic p
Slide 51: Clinical innovation summary
Clinical innovation summary 1. Exciting time for iRhythm 2. Clinical innovation driven by unmet clinical needs and opportunity 3. Robust pipeline of evidence and ability to leverage data science and AI 4. Competitive advantages in our favor © 2022 iRhythm Technologies, Inc. 51
Slide 52: A Foundation for Growth: Our Core US Business
A Foundation for Growth: Our Core US Business CHAD PATTERSON Chief Commercial Officer © 2022 iRhythm Technologies, Inc. 52
Slide 53: Real-life Patient Experience
Real-life Patient Experience 37-year-old male experiencing palpitations, fatigue, and headaches. Zio XT recommended by his primary care physician Physician received results back within a week after prescribed wear time. Arrhythmias detected and referred to a cardiologist The cardiologist, upon revie
Slide 54: Zio market opportunity in the U.S. is significant and growing
Zio market opportunity in the U.S. is significant and growing US PATIENT POPULATION 213 • >20 years old (excludes non-insured population) million • Source: US Census Bureau2 UNIQUE PCP VISITS • Average ~2.8 physician visits annually 200 • 51% are PCP visits million • IRTC estimates ~200M unique pati
Slide 55: US cardiology growth continues to represent a large opportunity
US cardiology growth continues to represent a large opportunity for Zio Cardiology penetration of Zio is 30% and growing Zio penetration within cardiology at top 50 health systems is nearly 42% and their annual prescription rate is 26% higher than average cardiologists Annual Zio prescriptions per c
Slide 56: Cardiac monitoring is the gateway to a cardiovascular program
Cardiac monitoring is the gateway to a cardiovascular program CARDIOVASCULAR PROGRAM UNDIAGNOSED CARDIAC MONITOR CLINICAL AND MONITORING DIAGNOSE REFERRAL TREAT PATIENTS ECONOMIC OUTCOMES © 2022 iRhythm Technologies, Inc. 56
Slide 57: Zio provides monitoring solutions across the spectrum of care
Zio provides monitoring solutions across the spectrum of care Zio XT Zio AT Long-term, continuous Mobile cardiac telemetry ambulatory cardiac monitor with continuous recording The right test the first time Actionable transmission reports Comprehensive Comprehensive final patient report final patient
Slide 58: Zio Service: the high yield, low-cost solution
Zio Service: the high yield, low-cost solution 100% Highest Yield / Lowest Cost 80% Zio AT Implantable Loop DIAGNOSTIC YIELD 60% Zio XT Recorder Other Mobile Cardiac Telemetry 40% 20% Event Holter Recorder 0% $0 $100 $200 $300 $400 $500 $600 $700 $800 $8,000 CMS REIMBURSEMENT RATE 1. 2022 Medicare P
Slide 59: Clinical evidence from over 35 peer-reviewed publications
Clinical evidence from over 35 peer-reviewed publications1 Nature Medicine JAMA Cardiology JAMA Journal of Interventional Cardiac Electrophysiology 1. Data on file. iRhythm Technologies, 2022. © 2022 iRhythm Technologies, Inc. 59
Slide 60: Broad access through commercial and government payers
Broad access achieved through commercial and government payers 1. Most major commercial plans cover Zio XT and AT1 2. Medicare coverage available for Zio XT and Zio AT nationwide2 1. Includes Medicare Advantage. Third-party payor and Medicare Advantage criteria apply. 2. Medicare criteria applies. C
Slide 61: Customer experience and EHR integration are competitive differentiators
Customer experience and comprehensive EHR integration are competitive differentiators for the Zio brand THE ZIO CUSTOMER EXPERIENCE IS . . . WITH A CURRENT FOCUS ON EHR A DIFFERENTIATOR AND CORE INTEGRATION TO DRIVE NEW ACCOUNT VALUE DRIVER FOR IRHYTHM . . . AND REGISTRATION GROWTH • Standardization
Slide 62: Accelerating growth in PCP channels
Accelerating growth in PCP channels key to capturing U.S. opportunity Number of PCP prescribers increased by 28% YOY in 2021, with 2022 forecasted to again grow by double digits PCP prescriber penetration is estimated at 11% in 2022, plans to expand to 20% by 2027 PCP volume grew 43% YTD vs YAG PCP
Slide 63: Building a world-class brand
Building a world-class brand Thoughtful investments in marketing intended to create meaningful awareness across all three customer segments Enabling our marketing engine to scale will drive effectiveness beyond our call targets and increase iRhythm’s share of voice Evaluating paths for direct-to-con
Slide 64: Zio is well-positioned for continued growth in the US
Zio is well-positioned for continued growth in the US MONITORING EXPANDING ACROSS THE PEER-REVIEWED ADDRESSABLE SPECTRUM OF CLINICAL MARKET ACCESS WINNING CUTOMER PRESCRIBER WORLD CLASS AUDIENCE PATIENT NEEDS EVIDENCE COVERAGE EXPERIENCE EXPANSION BRAND BUILDING Significant Single-use, 35+ published
Slide 65: Expansion Into International Markets
Expansion Into International Markets SANDRINE MOIREZ International General Manager © 2022 iRhythm Technologies, Inc. 65
Slide 66: Our mission is to create global, equitable access to arrhythmia diagnostics
Commitment to accelerated expansion through investment in global markets GLOBAL PREVALENCE OF AFIB Our mission is to create global, equitable access to Age-standardized <600 accurate arrhythmia diagnostics global prevalence rates of atrial 600 — 699 fibrillation per 700 — 899 100,000 >900 1. 2020 ES
Slide 67: Meaningful contribution to topline revenue in next 5 years
Meaningful contribution to topline revenue in next 5 years International revenue contribution (USD millions) International opportunity is more than $1 billion 8% of revenue with 5+ million TAM in prioritized countries across EMEA and Asia Pacific Revenue growth accelerates when long-term reimburseme
Slide 68: Phased market entry will mitigate risks and shorten timelines
Phased market entry will mitigate risks, shorten timelines to launch and increase chances of success 1. MARKET DISCOVERY: 0.5-1.5 years, Lighter investment Business case validation, KOL engagement, Reimbursement and funding pathways definition 2. MARKET PRIMING: ~2-3 years, Mid-level investment Oper
Slide 69: International Expansion Roadmap
International Expansion Roadmap 2022 2023 2024 2025 2026 2027 UK JP NL SE CH FR DE Begin Discovery Initial Revenue (Market Priming) Commercial Launch (Reimbursement) © 2022 iRhythm Technologies, Inc. 69
Slide 70: United Kingdom market
E UROPE AN MARKE TS UNITED KINGDOM Clinical Need – Patient backlog, Inefficiencies, Focus on AFib detection and stroke prevention 500,000 Ambulatory cardiac monitoring Only long-term continuous ACM with positive NICE recommendation tests annually Winner of Artificial Intelligence in Health and Care
Slide 71: Prioritized EU countries
E UROPE AN MARKE TS PRIORITIZED EU COUNTRIES Initiating market access efforts in 2023 and 2024 Clinical Need - Arrhythmia detection for Symptomatic and Sweden, the Netherlands, Stroke patients with a focus on AFib Switzerland, Germany and France Creating Market Awareness through KOL engagement 1,800
Slide 72: Japan market
JAPAN MARKE T JAPAN Pursuing regulatory approval Clinical Need - Significant burden of heart disease and stroke in the rapidly aging Japanese population 1,500,000 Limited innovation in ACM - Holter is golden standard Ambulatory cardiac monitoring tests annually Significant resources are used to anal
Slide 73: Gaining confidence in global expansion
Gaining confidence in global expansion MARKET NICE GO TO MARKET PARTNERSHIPS TO AWARENESS GUIDANCE STRATEGY ACCELERATE Strong Zio awareness across Only long-term continuous ACM with Recruitment of international experts Inorganic opportunities to gain early International physician community positive
Slide 74: Question & Answer Session, Fifteen-minute Break
Question & Answer Session Fifteen-minute Break
Slide 75: Introducing: Know Your Rhythm
Introducing: Know Your Rhythm SARA BENDER Chief of Staff © 2022 iRhythm Technologies, Inc. 75
Slide 76: US cardiac arrhythmia burden
US cardiac arrhythmia burden 1 in 4 3x/11x Lifetime risk of AFib Increased risk of heart failure 30% 500,000 AFib underlying cause Hospitalizations per year of strokes due to AFib $35B 5x 1/3 Annual cost of stroke Increased risk of Asymptomatic at stroke time of diagnosis See appendix for sources ©
Slide 77: Early detection and diagnosis can prompt earlier treatment
Early detection and diagnosis can prompt earlier treatment Contemporary treatments Trials show restoration of sinus evolving to more than oral rhythm can decrease the risk of anticoagulation therapy heart failure, stroke, hospitalization and death © 2022 iRhythm Technologies, Inc. 77
Slide 78: Active monitoring with Zio XT detects dramatically more AFib
Active monitoring with Zio XT detects dramatically more AFib in a Active monitoring for AFib relative to usual care1,2 moderately at-risk population ↓ 24% 2.6x ED visits Hospitalizations ↓ 23% Greater detection of AFib vs. usual care as published in the mSToPS clinical trial 1 Combined 39% lower car
Slide 79: Building clinical evidence to inform clinical guidelines
Building clinical evidence to inform clinical guidelines AFIB SCREENING TRIALS CLINICAL GUIDELINES 2020: Opportunistic screening for AFib is recommended in patients ≥65 years old, hypertensive patients, and in patients with obstructive sleep apnea. Systematic ECG screening should be considered to de
Slide 80: Introducing the program for early detection of heart arrhythmias
INTRODUCING The ground-breaking program for early detection of heart arrhythmias. © 2022 iRhythm Technologies, Inc. 80
Slide 81: Know Your Rhythm Member Experience
Know Your Rhythm Member Experience Know Your Rhythm early detection program helps plan members understand their risk of AFib or other heart arrhythmias. They get the answers they need, from the comfort of their own home. Eligible participants simply Participants apply the Expert cardiologists will e
Slide 82: Innovative partnership with Heartbeat Health
Innovative partnership with Heartbeat Health Heartbeat is a virtual-first cardiology provider that leverages real-time clinical data & device connectivity to diagnose and deliver proactive heart care. Backed by our strategic partnership with Member Experience Data & Diagnostics Nationwide Cardiologi
Slide 83: Zio XT is the industry leader for long-term continuous monitoring
Zio XT is the industry leader for long-term continuous monitoring. Designed to optimize the patient experience. Minimal disruption to patient for high compliance and longer wear times. Patients shower, sleep, and exercise with Zio. 98% 1,2 99% 3 Patient compliance Usable recording 1. Data on file. i
Slide 84: Early detection opportunity begins with Medicare Advantage
Early detection opportunity begins with Medicare Advantage INITIAL OPPORTUNIT Y EXPANDING INTO TRADITIONAL REIMBURSEMENT Medicare Advantage Medicare Fee-For-Service (FFS) 35.4M 2022 Medicare FFS population 29.1M 2022 Medicare Advantage population 8% Annual increase YOY as 5.8M At-risk lives 7.1M At-
Slide 85: Development Timeline for Know Your Rhythm by Zio
Development Timeline for Know Your Rhythm by Zio NOVEMBER MAY 2021 2022 Strategy for early Program build detection program and outreach FEBRUARY SEPTEMBER 2022 2022 Concepting/design and Term sheet for pilot customer research with key partners © 2022 iRhythm Technologies, Inc. 85
Slide 86: Announcing pilot launch with Physician Care Centers
Announcing pilot launch with Physician Care Centers (PCC) High-touch primary care Value-based care model provider group, with 76 that has been serving the locations throughout the Medicare population for Southeast U.S. 10+ years © 2022 iRhythm Technologies, Inc. 86
Slide 87: Preparing for the future of Know Your Rhythm
Preparing for the future of Know Your Rhythm 2023 PILOT PROGRAM WITH PHYSICIAN CARE CENTERS (PCC) WILL: Validate end-to-end Measure member Demonstrate product and engagement and health outcomes experience satisfaction © 2022 iRhythm Technologies, Inc. 87
Slide 88: A Look Forward: Building Products and Technology for the Future
A Look Forward: Building Products and Technology for the Future MARK DAY, PHD Chief Technology Officer © 2022 iRhythm Technologies, Inc. 88
Slide 89: iRhythm's approach to innovation
iRhythm’s approach to innovation CLINICAL iRhythm has – and will continue to – leverage the power of evidence EVIDENCE to unlock new markets, driving reimbursement and adoption ZIO INNOVATION STACK BIOSENSOR iRhythm created the category of patch-based ECG monitoring in 2010, TECHNOLOGY and we contin
Slide 90: Extending our biosensor lead
Extending our biosensor lead PERFORMANCE & PATIENT COMFORT 3RD GEN 2ND GEN 1ST GEN PROTOT YPE 2008 TODAY © 2022 iRhythm Technologies, Inc. 90
Slide 91: Introducing the Zio monitor
Introducing the Zio monitor Market evaluation underway, with FDA cleared strong initial performance 1. Design verification data on file. iRhythm Technologies, 2021. 55% lighter housing and 20% thinner than the current generation.1 New breathable and waterproof outer layer.1 © 2022 iRhythm Technologi
Slide 92: Raising the bar on our own biosensor technology
Raising the bar on our own biosensor technology Compared to Zio XT (Q3 ’22) for Rx=14 Days1 Driven by: Zio Monitor Zio XT Zio Monitor Zio XT Zio Monitor Zio XT Median wear time Mean Wear Further minimization of largely unchanged Time improved short-term wear 1. Data on file, September 2022. © 2022 i
Slide 93: Biosensor innovation leading to platform evolution
Biosensor innovation leading to platform evolution CURRENT PLATFORM FUTURE PORTFOLIO + Common form factor for clinicians, Single biosensor is capable but different under the hood of both paradigms1 1. Zio Monitor is FDA cleared; other product clearances pending © 2022 iRhythm Technologies, Inc. 93
Slide 95: Concept: Algorithm development methods
Concept: Algorithm development methods “ARTIFICIAL INTELLIGENCE” “Expert Rules” “Machine-Learned” RULES DATA “Deep-Learned” ANALOGY: We don’t teach our children to talk with grammar (Rules), we just talk to them (Data) © 2022 iRhythm Technologies, Inc. 95
Slide 96: How can deep learning be so great?
How can deep learning be so great? Expert Human Deep-Learned SENSITIVIT Y Machine-Learned Expert Rule AVAILABLE DATA © 2022 iRhythm Technologies, Inc. 96
Slide 97: Cardiologist-level arrhythmia detection using a deep neural network
Cardiologist-level arrhythmia detection and classification in ambulatory electrocardiograms using a deep neural network BACKGROUND Existing commercial ECG interpretation algorithms still show significant rates of misdiagnosis. Substantial advances in algorithm development have been made in recent ye
Slide 98: How did it work out for Zio?
How did it work out for Zio? Deep learning V2 Cardiologist-level detection1 Deep learning V1 Average Sensitivity Over a billion hours of curated ECG data2 DEEP LEARNING DELIVERED A STEP-FUNCTION IMPROVEMENT Machine-learned Expert rule 1. Hannun, AY. et al. Cardiologist-level arrhythmia detection and
Slide 99: Our approach - not all AI is equal
Our approach - not all AI is equal APPROACH CLINICAL FDA COMMERCIAL TO AI EVIDENCE CLEARANCE USE Partnered with Demonstrated expert- Deep-learned v1 >4 million world-renowned level rhythm classification cleared by FDA in 2018 records analyzed AI experts at Stanford accuracy in and v2 in 2021.2,3 to
Slide 101: AFib monitoring: ZEUS and Zio Watch
AFIB MONITORING UNMET NEED: ENABLED BY: Long-term, AI-based approach to AFib detection Patient-compliant, & burden, leveraging Zio Service Non-invasive, infrastructure Low-cost and Clinical-grade AFib monitoring service Developed in partnership with with ZEUS - Zio Watch Service, FDA 510(k) cleared
Slide 102: Performance comparison: the impact of data and innovation
Performance comparison: the impact of data & innovation 117-PATIENT PPG AMBULATORY STUDY AFib burden estimate (ACE) vs. reference (Zio XT) 1.0 AFib burden estimate (ACE) 0.8 0.6 0.4 0.2 Fitted line 0.0 (R2: 0.985694) 0.0 0.2 0.4 0.6 0.8 1.0 Subject AFib burden Reference (Zio XT) 1. Athill et al. A p
Slide 104: Zio patients matched in payer database; AI prediction of AFib
AFib Other (non-AFib) >200,000 Zio patients match in payer database Can AI predict likelihood of future AFib2? >45,000 patients w/AFib and ~1,800 strokes Validated models providing customized risk scores1 1,2 AI–based prediction and risk scoring models are not FDA cleared © 2022 iRhythm Technologies
Slide 105: A future with risk stratification and predictive healthcare
A future with risk stratification and predictive healthcare WEARABLES + AI-ENABLED ANALYSIS ECG DATABASE + EHR DATA + AI + EVIDENCE © 2022 iRhythm Technologies, Inc. 105
Slide 106: Building Operational Excellence
Building Operational Excellence DOUG DEVINE Chief Operating Officer © 2022 iRhythm Technologies, Inc. 106
Slide 108: Grown capacity quickly to meet demand
Grown capacity quickly to meet demand Shipped Volume Tripled unit volumes from 2018 to 2022 Growth to date has been supported primarily by adding resources to manual processes Significant opportunities identified to scale more efficiently, thereby improving operationally and reducing cost profile 20
Slide 109: Zio XT cost per unit for prior six quarters
Zio XT cost per unit for prior six quarters Zio XT cost per unit Zio service costs per revenue unit include manufacturing costs as well as costs related to the Zio service Through productivity gains and digital transformation beginning in 2021, have started to see reductions in cost to serve through
Slide 110: Operational excellence focused on three pillars
Operational excellence focused on three pillars 1. 2. 3. CONTINUE TO IMPROVE LOWER SCALE & IMPROVE PATIENT & PROVIDER COST BUSINESS EXPERIENCE STRUCTURE CONTINUIT Y Shifting focus towards scaling efficiently and effectively in anticipation of significant growth © 2022 iRhythm Technologies, Inc. 110
Slide 111: Recent wins to enhance operational foundation
Recent wins to enhance operational foundation and prepare for the future LAUNCHED NEW INTRODUCED UPGRADED MANUFACTURING NEXT GEN CLINICAL OPS CAPACIT Y, FACILIT Y ZIO PLATFORM TOOLS & PLANNING 3X more annual Scaled and enabled 95% of reports in last capacity or 5M+ units supply chain continuity 12 m
Slide 112: Hyper-focused on driving efficiencies in every area of operations
Hyper-focused on driving efficiencies in every area of operations Dedicated to continuous process improvement across all areas of operations PLAN Strategic investments in last 12 months have bolstered the foundation on which we will scale our operations for the future IMPROVE & BUILD & Committed to
Slide 113: Big initiatives in the next 1-3 years
Big initiatives in the next 1-3 years MANUFACTURING & CLINICAL EFFICIENCY EXPANDED LOGISTICS PACKAGING AUTOMATION THROUGH APPLICATION OF AI NETWORK Reduce labor cost by ~$1+/unit Increase clinical technician 3 inbound and outbound while increasing capacity to productivity by ~25%+ sites to reduce tu
Slide 114: Case study: manufacturing and packaging automation
Case study: manufacturing and Future Automation Process packaging automation 1. Scale to 10m+ units annually 2. Reduce cost by $1 per unit 3. Labor touch reduced by 50% 4. Quality & yield Improvements 5. Manufacturing capability scalable to multiple locations © 2022 iRhythm Technologies, Inc. 114
Slide 115: Case study: improving clinical quality and efficiency through AI
Case study: improving clinical quality and efficiency through application of AI ENHANCE QUALIT Y OF REPORTS Reduce variability Improve algorithm results Expand insights IMPROVE EFFICIENCY Improve routing/air traffic control Reduce activity Consolidate multiple systems GLOBALIZE CLINICAL OPERATIONS D
Slide 116: Zio XT cost per unit over five years
Driving towards 25-30% Zio XT cost per unit over five years reduction in cost to serve Anticipate 25-30% reduction in XT cost per unit by 2027 Reductions driven by unit cost economics as well as initiatives to scale, automate and improve service costs 2021A 2022G 2027E Clinical Reports Device Manufa
Slide 117: Financial Outlook
Financial Outlook BRICE BOBZIEN Chief Financial Officer © 2022 iRhythm Technologies, Inc. 117
Slide 118: Poised to deliver strong financial performance over next five years
Poised to deliver strong financial performance over the next five years 2021 ACTUALS 2022 GUIDANCE 2027 ESTIMATE TRAJECTORY REVENUE $322.8 million $415 – 420 million >$1 billion ~20% CAGR GROSS MARGIN 66% 68 – 69% 73% ~450 bps ADJUSTED EBITDA (11.1)% of revenue ~(3.5)% of revenue 15% of revenue ~1,8
Slide 119: Creating financial flexibility to capitalize on opportunity
Creating financial flexibility to capitalize on opportunity REVENUE GROWTH PRODUCT EFFICIENCIES LONG-TERM PROFITABILIT Y Continued penetration into core U.S. Manufacturing automation Optimize efficiencies in back office with market with Zio XT and Zio AT scale and process development Design for manu
Slide 120: Five-year revenue trajectory reflective of significant market potential
Five-year revenue trajectory reflective of significant market potential GLOBAL VOLUME GLOBAL AVERAGE GLOBAL NET REVENUE (UNITS, THOUSANDS) SALES PRICE (USD) (USD, MILLIONS) 2021A 2022G U.S. Core International 2027E 2021A 2022G Pure Product & 2027E 2021A 2022G U.S Core International Price & 2027E Pen
Slide 121: Opportunities for net ASP improvement
Opportunities for net ASP improvement Volume distribution for EXPANSION OF COVERAGE >48 hours of Zio XT in the U.S.1 Medicaid contracting PAYER T YPE % OF VOLUME Conversion of non-contracted CMS ~21% commercial payers Commercial ~55% IMPROVED PATIENT EXPERIENCE Non-Contracted ~13% Billing for Home E
Slide 122: Unlocking value and enabling scalability with operational discipline
Unlocking value and enabling scalability with operational discipline Unit cost economics Key efficiency initiatives targeted to Analytics Globalization deliver ~$250 million1 in gross annual savings by 2027 Scalability and productivity gains can Operational Efficiency enable capabilities to service
Slide 123: Accelerating value creation through operational efficiencies
Accelerating value creation through operational efficiencies GROSS PROFIT MARGIN UNIT COST REDUCTIONS • Driving manufacturing automation, design for +450 bps manufacturability, scale through facility leverage, and supply chain excellence SERVICE COST EFFICIENCIES • Efficiency gains from AI incorpora
Slide 124: Focus on generating leverage and disciplined opportunity prioritization
Focus on generating leverage and disciplined opportunity prioritization ADJUSTED EBITDA MARGIN RESEARCH & DEVELOPMENT • Anticipate R&D will remain ~12% of revenue long-term +1,850 bps • Disciplined portfolio prioritization will allow for adjacent market research & development investments SALES & MAR
Slide 125: Financial outlook summary
Financial outlook summary Aggressive but high-confidence 5-year plan Targeted to deliver ~20% revenue CAGR over next five years, driven by core U.S. and International Expansion into adjacent markets can be potential upside Significant leverage from gross margin and G&A cost savings Targeted 15% adju
Slide 126: Question & Answer Session
IRHYTHM Question & Answer Session
Slide 128: Substantial and growing market potential (sources)
STRATEGY FOR STAKEHOLDER VALUE CREATION Substantial and growing market potential 1. DRG: Ambulatory Electrocardiography Monitoring Devices, Market Insights, US, 2022. 2. US Population per U.S. Census Bureau. Accessed at: https://simplemaps.com/data/us-zips 3. iRhythm estimate assumes a reduction of
Slide 129: Significant adjacent market opportunities (sources)
STRATEGY FOR STAKEHOLDER VALUE CREATION Significant adjacent market opportunities SLEEP APNEA MARKET SIZING HYPERTENSION MARKET SIZING: 1. Franklin, K. A., & Lindberg, E. (2015). Obstructive sleep apnea is a common disorder in the 1. Bhalia, S., Pallangyo, P., Dalidali, A., Salum, S., Kawajika, R.,
Slide 130: The Zio Service delivers superior clinical accuracy (sources)
CLINICAL INNOVATION The Zio Service delivers superior clinical accuracy while reducing the cost of care 1. Data on file. iRhythm Technologies, 2019. 2. Tung, et al. Diagnostic yield of extended cardiac patch monitoring in patients with stroke or Tia. Frontiers in Neurology, 2015. 3. Barrett et al. C
Slide 131: Zio provides monitoring solutions across the spectrum of care (sources)
U.S. CORE BUSINESS Zio provides monitoring solutions across the spectrum of care 1. Data on file. iRhythm Technologies, 2019. 2. Tung, et al. Diagnostic yield of extended cardiac patch monitoring in patients with stroke or Tia. Frontiers in Neurology, 2015. 3. Tsang, J.P. et al. Benefits of monitori
Slide 132: International opportunity with 5+ million TAM (sources)
INTERNATIONAL MARKETS International opportunity with 5+ million TAM in prioritized countries UK: iRhythm estimate. UK Office for National Statistics; Hospital Episode Statistics, NHS Digital, 2019-2020; UK Healthcare Market Review 33ed, LaingBuisson, 2021. Accessed 5 January 2022. https://www.laingb
Slide 133: US cardiac arrhythmia burden (sources)
KNOW YOUR RHYTHM US cardiac arrhythmia burden 1. Lifetime risk of atrial fibrillation ( 23.4% with an optimal risk profile and 33.4% with a borderline risk profile). BMJ 2018, Laila Staerk, research fellow et. Al. based on longitudinal data from the Framingham Heart Study. 2. AF represents the under

iRhythm Technologies — Investor Day (September 2022) on 6ix

Irhythm — iRhythm Technologies — Investor Day (September 2022)

Slide 1: 2022 Analyst & Investor Day

Slide 2: Welcome

Slide 3: Safe Harbor

Slide 4: Agenda

Slide 5: Presenters

Slide 6: Strategy for Stakeholder Value Creation

Slide 7: 5+ Million Patients served, ~1.5 Million, 1 Billion hours

Slide 8: iRhythm's track record of success

Slide 9: Addressing the future focus of healthcare

Slide 10: Compelling investment thesis for value creation

Slide 11: The Zio platform enables us to address the challenges of tomorrow

Slide 12: Vision and Mission

Slide 13: Substantial and growing market potential

Slide 14: Significant market opportunity will lead to meaningful value creation over next five years

Slide 15: Significant adjacent market opportunities

Slide 16: Introducing the program for early detection of heart arrhythmias

Slide 17: Driving efficiencies through operational discipline

Slide 18: Strategic portfolio management will fuel future growth opportunities

Slide 19: Committed to sustainable and responsible growth

Slide 20: Differentiated Data Sets, Clinical Distinction, Operational Excellence

Slide 21: Clinical Innovation

Slide 22: Vision and Mission

Slide 23: iRhythm's first mover advantage

Slide 24: Clinical priorities aligned to an evolved model of care delivery

Slide 25: Priorities for scientific and clinical innovation

Slide 26: The Zio Service delivers superior clinical accuracy while reducing cost of care

Slide 27: Clinical Evidence Generation

Slide 28: iRhythm's approach to clinical science

Slide 29: iRhythm engages with top academic centers and KOLs globally

Slide 30: Robust and growing body of clinical evidence

Slide 31: Key 2022 congresses displayed diverse and impactful data

Slide 32: Recent peer-reviewed publications

Slide 33: Active pipeline of studies and research proposals

Slide 34: Pursuing New Indications

Slide 35: Growth of Atrial Fibrillation Prevalence

Slide 36: Direct medical costs for patients with undiagnosed AFib are significant

Slide 37: If you look for Afib, you will find it

Slide 38: Prevalence of atrial fibrillation will only increase in the future

Slide 39: Identifying and treating AFib early is critical to better outcomes

Slide 40: Silent AFib market development will move forward via risk-sharing model

Slide 41: A Spotlight on Zio Watch

Slide 42: Most consumer devices are pre-diagnostics and not approved for AFib diagnosis

Slide 43: Landscape of AFib and syncope monitoring solutions

Slide 44: ZEUS System well-positioned to address unmet needs

Slide 45: Data Science, AI, and New Technologies

Slide 46: Data science hierarchy needed to leverage AI

Slide 47: Comprehensive EHR integration with bidirectional data flow

Slide 48: Data linkages create opportunities for prediction and prevention

Slide 49: Data and EHR integration can enable augmentation of products

Slide 50: Adjacent market opportunities: discovering the possible

Slide 51: Clinical innovation summary

Slide 52: A Foundation for Growth: Our Core US Business

Slide 53: Real-life Patient Experience

Slide 54: Zio market opportunity in the U.S. is significant and growing

Slide 55: US cardiology growth continues to represent a large opportunity

Slide 56: Cardiac monitoring is the gateway to a cardiovascular program

Slide 57: Zio provides monitoring solutions across the spectrum of care

Slide 58: Zio Service: the high yield, low-cost solution

Slide 59: Clinical evidence from over 35 peer-reviewed publications

Slide 60: Broad access through commercial and government payers

Slide 61: Customer experience and EHR integration are competitive differentiators

Slide 62: Accelerating growth in PCP channels

Slide 63: Building a world-class brand

Slide 64: Zio is well-positioned for continued growth in the US

Slide 65: Expansion Into International Markets

Slide 66: Our mission is to create global, equitable access to arrhythmia diagnostics

Slide 67: Meaningful contribution to topline revenue in next 5 years

Slide 68: Phased market entry will mitigate risks and shorten timelines

Slide 69: International Expansion Roadmap

Slide 70: United Kingdom market

Slide 71: Prioritized EU countries

Slide 72: Japan market

Slide 73: Gaining confidence in global expansion

Slide 74: Question & Answer Session, Fifteen-minute Break

Slide 75: Introducing: Know Your Rhythm

Slide 76: US cardiac arrhythmia burden

Slide 77: Early detection and diagnosis can prompt earlier treatment

Slide 78: Active monitoring with Zio XT detects dramatically more AFib

Slide 79: Building clinical evidence to inform clinical guidelines