iRhythm Technologies, Inc. (IRTC Quick QuoteIRTC - Free Report) has received regulatory approval from Japan’s Pharmaceutical and Medical Device Agency for its Zio long-term continuous ECG monitoring (LTCM) system.

The Zio system, which provides 14 days of continuous heart monitoring, combines a wearable patch device with AI-powered analysis through Zio ECG Utilization Software for high diagnostic accuracy to help doctors make the right diagnosis the first time. With this approval, iRhythm aims to secure reimbursement from Japan’s Ministry of Health, Labour and Welfare (MHLW) to make this technology more accessible. Japan's MHLW designated iRhythm's Zio system for high medical needs, a rare distinction for innovative devices with significant medical utility.

iRhythm's deep learning technology can accurately classify a wide range of arrhythmias, matching the diagnostic performance of cardiologists. In clinical settings, this AI-driven system helps reduce misdiagnosed ECG interpretations, enhancing diagnostic accuracy and improving clinical efficiency.

Shares of IRTC have lost 0.1% since the announcement on Sept. 11.

Japan’s Regulatory Approval Elevates IRTC's Zio ECG System

Per iRhythm, this approval marks a major milestone in cardiac care for Japan, the second-largest ambulatory cardiac monitoring market. Currently, most patients rely on outdated Holter monitoring, but the Zio system offers greater accuracy and longer monitoring times, reducing misdiagnoses and improving clinical efficiency.

With Japan’s aging population and increasing stroke and cardiovascular disease burden, it has been recommended by the Japanese Heart Rhythm Society that the adoption of Zio’s advanced AI-powered ECG technology is expected to meet the growing demand for better arrhythmia detection in Japan. iRhythm’s partnership with local distributors positions the company to enhance patient outcomes globally.

Japan is poised for growth due to its aging population and rising cardiovascular disease burden with 1.6 million cardiac tests annually.

iRhythm Expands Global Reach in Cardiac Monitoring Solutions

iRhythm Technologies, which has processed over eight million patient reports and accumulated 1.8 billion hours of ECG data, is preparing to launch its Zio ECG systems in Japan after receiving regulatory approval. The company has signed a distribution agreement, awaiting reimbursement approval. iRhythm’s Zio monitor systems are already available in the United States, the United Kingdom and parts of Europe, including Austria, the Netherlands, Spain and Switzerland.

Market Prospects Favoring IRTC

Per a report in Grand View Research, the global arrhythmia monitoring devices market size is estimated to be $7.85 billion in 2024. It is anticipated to reach $12.03 billion by 2030 at a CAGR of 7.4%.

The robust growth is likely to be driven by the rise in heart rhythm irregularities, the development of AI-powered devices, the broader use of remote cardiac monitoring and user-friendly device designs. Additionally, increasing adoption by medical professionals, technological advancements and growing investment in innovative devices are fueling this market’s rapid growth.

Recent Developments at iRhythym

This Month, iRhythm shared promising real-world data on its next-generation Zio LTCM patch ECG device at the Heart Rhythm Society’s HRX 2024 meeting. The Zio monitor, designed to be smaller, lighter and waterproof with a breathable adhesive, demonstrated significant improvements over its predecessor, Zio XT. This study suggests that the new device enhances patient monitoring and detection of heart rhythm abnormalities.

Last Month, iRhythm launched its Zio monitor and LTCM service in Austria, the Netherlands, Spain and Switzerland. The Zio monitor, offering up to 14 days of continuous ECG monitoring, received CE Marking under the European Union Medical Device Regulation in December 2023. This expansion provides a significant improvement over traditional 24-48-hour Holter monitoring.

IRTC Stock Price Performance

Shares of iRhythm have plunged 30.1% year to date compared with the industry’s 12.1% decline. The S&P 500 has witnessed a 16.2% rise in the same time frame.

Image Source: Zacks Investment Research

Zacks Rank & Key Picks

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

Some better-ranked stocks in the broader medical space are Universal Health Services (UHS Quick QuoteUHS - Free Report) , Quest Diagnostics (DGX Quick QuoteDGX - Free Report) and Aveanna Healthcare (AVAH Quick QuoteAVAH - Free Report) . While Universal Health Services sports a Zacks Rank #1 (Strong Buy), Quest Diagnostics and Aveanna Healthcare carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Universal Health Services has an estimated long-term growth rate of 19%. UHS’ earnings surpassed estimates in each of the trailing four quarters, with the average being 14.58%.

Universal Health Services has gained 41.1% compared with the industry's 34.8% growth year to date.

Quest Diagnostics has an estimated long-term growth rate of 6.20%. DGX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.31%.

Quest Diagnostics shares have risen 3.7% year to date compared with the industry’s 10.2% growth.

Aveanna Healthcare's earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 47.5%. 

AVAH's shares have surged 104.5% year to date compared with the industry’s 15.7% growth.