iRhythm Technologies, Inc. (0A7L.L) Earnings Call Transcript & Summary

Okay. Welcome. Thanks for everyone joining day 2 of BMS Global Healthcare Conference. I'm Patrick. I run the U.S. med tech team. For those of you who don't know, disclosures. Very exciting. morganstanley.com/researchdisclosures. Not the most thrilling thing, but what is thrilling is to have iRhythm here. Thanks to Quentin, who's CEO and decided to join for some reason, probably because he doesn't know me well enough to notice fair way yet. But thanks for joining.

Thanks for having us.

I might just dive right in, in the core LTCM market. I think there was quite a lot of shock. I had one of my teammates opened the door to my office on the Q2 and with deep surprised at the number you guys printed given it's so far above where people expected it to be. But you flagged that 2/3 of that beat was really the core base business. For those who are less familiar in the audience, maybe you could like elaborate a little bit what drove that large LTM?

Yes, I would love to. Certainly, we were very excited with the momentum that we saw sort of pick up a bit in that core business. But beyond that, we saw a lot of great momentum in the innovative channel business as well. The ZIO AT business line performed incredibly well also. So there was a lot of big drivers in that quarter. But you're right, 2/3 of the beat came out of that core business. And I think if you parse that apart what was encouraging to us was we saw it coming out of really 2 aspects of it. When we think about the core business, we have our same-store business line that we monitor very closely, we saw the momentum there actually pick up a bit. But the real strength continue to come out of the new accounts that we were onboarding. And I think -- I call it the quality of the new account. It's really not the quality, but it's the size of the new account. The average prescribing volume per account has really stepped up in a meaningful way. And I think there's a couple of reasons for that. One, I think when you just think about our ability to convert these accounts, we're now able to go into these large networks and flip an entire network at a single time. Historically, we would go into these large networks pitching for the business, but we would have to convert 2, 3 accounts at a time and then convert the next 2, 3 accounts. And a lot of these networks have no interest really in working with multiple vendors for a period of time, but they're going to convert, they want to convert the entire book of business. And we really built out the size, scale, capability to do that about a year ago, and we've started to see the meaningful fruits of that. And so the size of the new account that we're converting is higher or larger than what we've seen historically. And I think that just speaks to our scale and capability. And we continue to see a lot of those in the pipeline that are very intriguing to us and continue to have success in that. So the size of the new account was much larger. I think the data that we continue to publish the clinical data, the CAMELOT data that's out there, the AVALON data that's out there. You just saw some recent data with the AMALFI study, continues to articulate the value of proactive monitoring, the value of monitoring with Zio relative to any of our competitive offerings. It just demonstrates that it's a far superior product. It's a faster time to diagnosis. It's a higher diagnostic yield. It's a lower retest rate. And it's also much lower or lighter health care resource utilization costs associated with when you're using Zio versus any of our competitive products. And I think that's resonating really well with this population. Finally, the last piece of it, the one that I probably get the most excited about is just we are seeing a real move even in our large established networks that we're serving today, a move towards primary care within their practices. And what's happening in that situation is we've opened the door through cardiology. We've opened it through electrophysiology. We've leveraged that relationship to have them bring the primary care physician within their network to the prescribing table, if you will. A lot of times, that primary care physician is not comfortable diagnosing, but the way we overcome that is with our integrated systems, we can put the report right into the system. Primary care can prescribe, the cardiology EP can go in, interpret the report, diagnose, and the product almost starts to become used like a rule in and rule out tool for these networks. And if the cardiologist EP sees something in that report, and they want to see that patient, they go ahead and have them referred on to cardiology or EP. If they don't, then they go down a different pathway. So it starts to address some of the capacity concerns that we're seeing in our same-store accounts. And what's really, really encouraging about it is once that's established and now the card or the EP is seeing a better profiled candidate, they're able to provide a better service to that patient whether that's more procedures for them as a practice, whatever it might be, post procedure monitoring actually starts to pick up again in terms of Zio. So now you see the overall account begin to really lift in ways that we hadn't seen historically. That's exciting. I think that's got a lot of legs to it. We're in the early innings of that, but that's what's really driving sort of that core business.

How critical -- I mean, you sort of alluded to it, but CAMELOT and AVALON. Was that the key to unlock this? Is this like a data-driven?

It's amazing to see sort of how that is opening doors to have these conversations. We're now at the point where folks are getting their hands on it. They're proactively calling in saying, look, we'd like to have a discussion around this. We want to understand it better. What are you -- what is this report telling us? Or what is this trial telling us? And we're able to have that discussion. And it certainly leads to the opportunity to open the doors, convert the business, whether it's coming through the lens of the physician or if it's coming from the top decision-makers in these networks who are seeing the ability to get a better outcome, it's kind of coming from both angles.

I mean on the topic of trials because you're talking about trials, I have no idea how much people will pay attention, but I thought the AMALFI readout of the ERC was super interesting. I mean maybe for those who are less familiar with it or missed it because there's a lot going on there, a little bit of a background on that trial and roughly what your takes from it were.

Yes. So the AMALFI trial was an important one for us. We ran it out of the U.K. where we're trying to demonstrate the value of monitoring in a home enrollment setting, right? So avoiding the patient from ever having to come into the clinic, can we find diagnosed arrhythmias at a rate comparable to those who are coming into the clinic? Or is there a very different experience, right? And this is particularly important in that U.K. market because the backlog to see a cardiologist, in some cases, is 5, 6, 7 months. I mean we were just -- we're talking about the one account right now. They've got 3,000 patients in their backlog that they're trying to work through. And so what we're trying to prove is that the ability to find the arrhythmias is high in a home enrollment setting. And what we found there was thousand patients -- thousands of patients that we were looking at, both in the one side of it that used the home enrollment approach with the Zio versus just traditional lines of care, which was going into the clinic was that with ZIO in a home enrollment setting, we actually found AFib at a rate of about 6.8% compared to just north of 5% in the traditional arm. Importantly, patients who wore the device out of the 14 days, I think the average order period is 13.9 days out of 14 days. So they're getting the full experience. We're getting all of the heartbeat data that we need to define the arrhythmia. And importantly, we're finding arrhythmias a whole lot sooner. On average, we found them in about 100 days in the home enrollment side of the study compared to north of 500 days in the traditional care pathway. That's very important when you think about it over a year of difference in terms of time frame to diagnose and what happens in that patient's journey over the course of that year can be incredibly costly, both to the patients in terms of their health outcomes, but also to the system in terms of what episodes of care they might be dealing with, right? So very encouraging to us. I think it continues to demonstrate home enrollment as a place. We are seeing home enrollment continue to grow in our overall business. We're up to about 23%, 24% of our volume comes through home enrollment. Interestingly, primary care, these innovative channel partners are leveraging home enrollment as well back here in the States. But I think what we were able to show is that it's a very attractive way to get after large populations of folks that need monitoring.

I live in the U.S. now, but my father-in-law has amyloidosis, so I can definitely speak in the U.K. to the backlog.

See a cardiologist [indiscernible]. It's incredibly tough. It's pretty bad.

The strength that we saw in Q2, just given the nature of what your business is and pulling new accounts on, why wouldn't we expect that to continue to manifest through the bulk of the second half of the year? I mean, surely, that should remain very strong.

I think that it will. I don't think there's any reason that we wouldn't expect to see it. Part of the increase to the guide that we passed through in the full year was certainly the Q2 beat, but then there was an increase in both our Q3 and Q4 expectation as well as we raised the full year well in excess of the Q2 beat. And in part, part of that is coming from the core business, right? So we do expect that momentum to continue to be strong. I think one thing that just philosophically, we try to be very thoughtful about is we don't want to get ahead of ourselves in some of these aspects of the business that are a little bit less predictable. The core business, I think we understand it well. I think there's new accounts, we understand well. Where there's a little bit less predictability is around the innovative channel partner. And so our approach there is we'll forecast what we see coming into the business that we're doing and transacting business with today. But there's new accounts that we expect that are going to convert and come online in Q3 and Q4, we're going to wait to see those come online and then we'll talk about them. Same with ZIO AT, right? We saw that momentum stick with us through Q1, Q2. We ended up passing some of that through in the back part of the year. We'll continue to monitor it. But we've been really pleased with that AT business.

We'll definitely get on to MCT there. Were you surprised by the ZIO AT strength?

Yes, we were, to be honest with you. What's interesting about it is we're sort of growing that AT business today at the rates that we used to grow it at prior to when the warning letter was issued, right? And I think the warning letter certainly took a little bit of the air out of our sales at the time. I don't think AT is the right product to truly go flip the majority of the market that I think we have a right to go win. I mean, we have 70% of the long-term cardiac monitoring market, yet we only have about 12% of the MCT market with our AT product. I think to really close that gap or catch up, we need MCT. But I do think AT is back to growing at some of those prior rates. We had a little bit of competitive hiccup back in Q3 of last year that opened the door to let us bring AT back in, but it did perform and has performed better than what we thought. But I think it also speaks to the opportunity that sits ahead with ZIO MCT because where we saw a lot of the AT success and where we continue to see it is we place a large emphasis on integrating with our accounts. When we integrate, I'm not sure I can give you a single account that's ever left working with iRhythm after going through the effort of integrating a system. So we try to integrate more than 50% of our accounts. We're working hard at getting there. We have 70% market share in the LTCM category, 12% in MCT. With an integrated account, what we found through that competitive disruption was it was very easy to swap AT into that integration so that they could start to use a different product when the competitive product was not available. That bodes well for when we launch MCT because I think we can drop it right into a lot of these integrated accounts and have some quick early wins and success. The challenge with AT that we get from our customers is that, well, it's only 14 days of monitoring. We need to get closer to 30 days. MCT is going to close that gap. So I'm bullish on what that can look like, but that's another one. I think let's get it in the market, let it play out. Let's see how it does, and then we'll talk about the real potential of where it can go.

I mean we're kind of on MCT now, so it sort of makes sense. I mean 21 days is a big improvement. How much does the remaining 9 matter?

I think it's meaningful. I think when you go out and you do the market research, and we've done a ton of effort and work around this, it's getting north of 20 days sufficient. And the feedback that we get is that it is. Most of the -- up to 30 days is sort of -- it started with the CMS code around CMS or around the CPT code for MCT. And it's very clear, it's up to 30 days. It doesn't require 30 days. It just says up to 30 days. And a lot of the physician practices sort of look at that and say, okay, I got to be up to 30 days. When you really get into it, what you find out for most of them is we got to be north of 20, right? And so 21 days is something that we can do very easily off of a single patch. We can do it off of a single gateway device that doesn't have to be recharged, which we believe to be important. And so we think we really addressed that gap pretty meaningfully. Now if we launch MCT and a customer really wants 30 days, we'll give them 2 patches, get them to 30 days, right? We're not going to lose the opportunity. But our intel would tell us that we would get out -- or we're going to get after the majority of the market at 21 days.

Not to put you on the spot, but time lines on MCT, you guys are saying, I think you used the phrase imminent maybe in some meetings.

It's actually, I'm excited to say it's been filed. So we are on file now. And it's off and running with the FDA.

So that's great news.

That's great news. Shout out to the team to get that done. We got that on file today. So well done.

That's great news. That's awesome to hear. I mean, to your point on the LTCM share relative to MCT, like how do you think about the analog of the 70% there versus the 12-ish today on the other side, is 70% the right way to look at it? Or it's a very different kind of a market in its own way? How should we think about peak share, whatever that means?

We would love to have 70% of it, right? I mean every 10 points of share gains is potentially $100 million of incremental revenue for us on an annual basis. So we're going to go after that as aggressively as we can. But we also realize like our biggest competitors, their primary market is the MCT market, right? So they're going to protect that aggressively as I would, too. But I think we have a real right to win there. I mean we have 70% market share in long-term cardiac monitoring. We are in the vast majority of these accounts already. They know iRhythm. They know Zio. We are integrated with them in many system integrations, Epic is only going to continue to build upon those integrations. It's very easy to put a ZIO MCT product right into their offering, right, and make it very seamless to use. So I'm bullish. You hear us talk about getting to 25% and then 35%. That's a couple of hundred million dollars of incremental annual revenue. I don't know that we ever get to 70% with these large competitors protecting their space. But we're going to go after it, for sure, and we'll see where we get to.

How much of wear time and proportional amount of data upload is limited by the battery? How much engineering-wise, is that the biggest?

Yes. That's the biggest issue, but it resides primarily on the gateway, right? So we got Bluetooth capability that takes you from the device to the gateway and then we're pushing to the cloud, right? And it's the battery there that limits the power or the power consumption is what limits the duration of life. I actually think there's a model out there where the patients are okay recharging that gateway. I mean they're recharging smartphones all the time. If we can get this thing to communicate with a smart device and then push up through that connection, that's one way to get around it. It's really about can we keep it to a single patch on the patient? And I do think, and we're doing wear studies as we speak that even go beyond 21 days that could get us a longer duration of monitoring. So if that's what the customer really, really wants, we want to find a way to meet them there. If that's what they want out of the gate today, we'll send a second patch. Our competitors today are sending 4 patches. Usually, they send 2 and then if the folks want to monitor for a longer duration and get into week 3 and week 4, they send another patch behind it, right? So even 2 patches, I guess, if you want 21 and another 9 days or so, you're probably a better experience than what our competitors are offering. So...

So I'm [indiscernible] my Apple watch is telling me it's time to stand. I'm going to ignore it. But flipping on to that, maybe if we could talk a little bit about asymptomatic. It's a topic that comes up a fair bit. I used this argument when we were doing the heatflow IPO, but we screen for colonoscopies structurally with patients, but heart attacks, coronary artery disease, all that side of things, rhythm disorders, I mean it's kind of the #1 killer in the U.S. is in cardiology really. So big picture, how are you thinking about asymptomatic and your role within that?

Yes. I think asymptomatic is going to be a big driver of growth for this company in the future. I think we're struggling a little bit sort of trying to understand how do we predict exactly when it's going to come online and to what degree and how fast. I mean, we're seeing some traction there already. About 3% of our prescribing volume in Q1 came from the innovative channel partners, which is predominantly asymptomatic monitoring, right? So we saw that step up again in Q2 and expect that will continue to grow. But how fast that adoption goes is a little bit hard for us to identify. We talk often about Signify was one of our early customers there. It took them 18 months to get to a nationwide program. Then we talked about the likes of CenterWell, and it took them 90 days to get to a nationwide program. So the pace of ramp, just how quickly they go is something we're still trying to learn. We believe there's probably 27 million folks in the U.S. alone who have undiagnosed or are completely unaware that they have arrhythmias. I think what's fascinating is when you start to dig into that, you find out that a vast majority of those 27 million folks exist in roughly 4 disease states. They're type 2 diabetics. They have COPD or they have CKD or they have OSA. We're working aggressively to target those comorbid disease states and proactively monitor those populations. This goes down the path a little bit of what we talked about back on Q2. We made a small investment in a firm by the name of Lucem where we're developing AI. It's proprietary AI to ourselves, exclusive to ourselves in cardiac that we can proactively go to these at-risk entities, leverage the power of the algorithms across their EMRs and look for markers in their patient history that would tell us that, that patient is likely to have an arrhythmia. And then we put a patch on monitor them, diagnose them and then we provide care or help, ensure that care is provided to reduce the downstream cost of caring for that patient. What's encouraging is in some of these early trials, the first 1,000 patients that we ran through sort of this algorithm criteria, found that about 920 patients actually had an arrhythmia. So north of 90% hit rate. The second one that we went after, we opened the aperture just a little bit. We're still north of 80% hit rate. So more than 800 out of the 1,000 patients that we put a patch on did in fact have an arrhythmia. So -- and then we're in the middle of a third trial as we speak, and it's early, but I can tell you we're 100% out of the first handful of folks that have come back in terms of hit rate of who actually had no arhythmias versus who we thought. I think that's going to become very important to how we think about opening up this 27 million patient population. I think if we can go into these payers with a high degree of accuracy, identify which of their patients likely have arrhythmias, get a patch on them, diagnose it, now they can treat them very differently. It's interesting when we're looking at the type 2 diabetic population. Outside of a physician's office, the most common place that a type 2 diabetic will get diagnosed with an arrhythmia is in the emergency room. And it's always -- not always, but the majority time is tied into a circulatory related event, right? We can bend that curve. And if we can just impact 1 patient for a provider or a payer, that's about $17,000 per patient that we're saving that system, right? So we believe we have a real ability to sort of bend that cost curve, and we're excited about getting after, but I think that's how you're going to open up the asymptomatic market. A dialysis patient costs $100,000 a year for Medicare to just keep going. And most clinics have a team, a cardiology team because so many of the patients just code out in the chair. So if you have that sense ahead of time, that word a lot of that, right, and get ahead of it, we can avoid a lot of them, right? Yes. Get ahead of it.

Yes, that makes a lot of sense. That's really interesting. I mean when you're having these discussions with the payers, I mean this in the best path way. Your product is not particularly expensive in terms of an absolute dollar [indiscernible] what is preventing them from that engagement? Is it just that there's a million things to do, and they just haven't thought about that population management side today, like what's the...

No, there's a couple of things that come up. Yes, they've got a lot of different priorities. And there have been situations where we pitch our program. They're very interested in it, but it comes back to because it's not the top priority, right? And so let's talk about it in 6 months or 12 months. That has occurred. One of the big challenges we run into is we don't have the physician capacity to prescribe and then follow up with these patients. So even if we diagnose and learned that they had it, we can't provide the care to ensure we reduce the cost of caring for that patient downstream. And we've come up with some creative ways to address that. We bring alongside ourselves a third-party virtual cardiology capability. That one can prescribe the Zio if you'd like them to or any patch for that matter, if you'd like them to. And two, once diagnosed, we can hand them over to the spiritual cardiology capability and ensure that we're managing that patient to reduce the cost of caring for them over the next 12 months or so, right, or as long as you want to go, but we're really intent on trying to get costs down within 12 months. That has opened the door tremendously. Of all the 12 innovative channel partners that we've signed, every one of them has required this wraparound service capability. In the 40 accounts that we're in active discussions with right now, the majority of those are wanting to have that discussion around that holistic program. So to me, this is more than just offering a device to identify diagnosed disease. It's sort of an entire program that we're bringing to the table that I think it's highly unique, differentiated that is very compelling to them and can help address their constraints, particularly around capacity or wraparound care afterwards that allows them to step into it much earlier, much quicker.

That's so interesting. I mean when you're thinking about that wraparound care and that side of things, there is not an element of just communicating to the patient. Even just the knowledge they have paroxysmal AFib or whatever. Isn't that highly material from that -- you could just drink a bit less.

They'll change. Yes, health habits, right? Just the awareness of knowing, I think, is something every patient probably wants to know. But the payer system wants to know that there's a change in that behavior, right? And so what are we able to do to help ensure that we do change that behavior, and that system can, in fact, realize a reduction in the cost of caring for the patient. I think that's so critical for us. I mean we spend a lot of time trying to measure, monitor, identify, communicate the ability to reduce the downstream costs. Because what I don't want to do is open this channel up, end up diagnosing a whole lot more arrhythmia, but then the cost of care is not changing one bit. And it's going to be viewed as we're just adding incremental cost. We've got to be careful not to let that be the argument that ever wins the day. And so we're pretty deliberate about following cost of care, identifying where the cost savings are coming from and helping our partners understand that.

I'm going to ask you about a meeting question, which is basically, we started by saying AVALON and CAMELOT open up for you guys a lot of doors that didn't exist before. And when you think about the asymptomatic side of things, Sometimes, we get the question around wearables and well, you're aware, I will see that cheap wearables and how that competes. But is the existence of the data side just and the fact that, that opened the door is evidence that in order to have a meaningful position in the asymptomatic, you need a data set, a history, you can't be a consumer-facing product.

Yes, I think the data is incredibly important, right? And I think you got to be more than just a wellness sort of device. I think most positions for them to change their course of therapy is going to want to get to a diagnosis of something, right? So not being able to get to a formal diagnosis off of a traditional wearable like you're discussing here. I think it's something that holds that back. And what we find is with the Apple Watch is a great example. It's probably one of the best lead generators that we found in our Zio business over the last several years. Folks show up. I got my Apple Watch telling me that I've got an arrhythmia or dangerous arhythmia that you need to take a look at, put a Zio on, right? That works very well for us, we're fine with that scenario, and I think it's actually helped open up the market.

We were talking before about the PCPs and getting them involved in that side. How does for you and your guys' perspective, how does servicing that group with -- how do you approach it differently so when you think about the core cardiologists?

Yes. For us, there's 2 ways that we go after primary care. And the first is in the large integrated health networks that we're already in. So here, we're leveraging the relationship at our territory manager, our key account manager, customer service folks that they already have with the cardiologists and the EP within the network. And we're leveraging that relationship to have the cards and the EPs actually begin to bring the primary care physician into the discussion. And a lot of times, I mean we don't even have to approach the card and the EPs to have them already reaching out to primary care to say we want the prescribing to happen a lot sooner. We're in a backlog. We're not seeing patients for 3 or 4 months. We don't want patients to leave our network and go somewhere else. How do we make sure we're seeing the right folks? Well, let's get a patch on them earlier and then we'll identify who we need to see sooner versus later. So that's one approach in the large systems we're already in is just leveraging existing relationships, our existing PMs, the power of the cardiologists, the EP within the network and have them move us further up the care pathway. That's one way. The other way is through the innovative channel partners. And that's very much more of a high-level strategic account level sale, right? And here, we're talking whether it's the CFO, whether it's the CEO, whether it's the head of strategy or large corporate projects, we're having those discussions at the executive level and then they're pushing it down through their channels. So in that scenario, literally, you've got a group of call it, maybe up to 10 folks. So we aren't quite at 10 folks in the company now, we'll probably get somewhere close to it. But it's roughly 10 folks who are out there really selling at a high enterprise-wide level versus sort of on the ground trying to convince one physician versus the next versus the next. I think this approach of innovative channels and then within health networks we're in, probably get us to 60%, 65% coverage of primary care in the states. While we're doing that, I think word of mouth is going to continue to grow in the primary care space around the ease of use of using patch-based technologies that I think inbound interest will continue to grow. I think we'll serve the majority of the market. We'll see where it goes. It definitely is going to be enough to keep us busy for the next several years. And if we've got to think differently at that point in time to get after the remaining 30%, 40%, then we look at it. But I think there's a lot of different ways we can do that. I mean there's partnering opportunities with folks who have large primary care network or sales channels, we drop our product in the bag in a #2 position, I think there's ways to get after it, right, that we don't have to go build a large commercial force.

Obviously, U.S. conference U.S. place, but just to pivot a little bit outside of the U.S., Japan, obviously, a huge market and a huge opportunity. I know you're a parity on pricing, but how do you think about or reimbursement, I should say. How do you think about the opportunities set in Japan?

It's an exciting market. It's the second largest market in terms of the volume of the inventory cardiac monitoring that's taking place, a little over 1.5 million tests being prescribed every single year. So we want to be there. We're excited to be there. We did a lot of work on the clinical and the medical side, getting up to the point of launching into the market where we had tremendous support from the Japanese Heart Rhythm Society. We had a high medical need designation bestowed upon the Zio product in particular, not even long-term product monitoring but Zio in particular, which I thought was a big differentiator. Unfortunately, sort of the clinical medical side is very disconnected from the reimbursement authorities, right? And so I don't think we got a lot of credit for a lot of the data that we were able to demonstrate that showed superior outcomes, and therefore, we didn't get a reimbursement level we had hoped for. We decided to go ahead and go into that market at the Holter rate code. We could have decided not to. Ultimately, I thought it was the best thing to go ahead and get into that market, start to seed it. A lot of what the reimbursement authorities were asking for was sort of head-to-head data of our product versus a local Japanese manufacturered Holter device on the Japanese population. So the best way to get at that in my mind was to get right in the market and let's just start going head to head, and we'll start tracking and monitoring those outcomes. And we'll present that back to them in the first half of next year. My hope is we see a reimbursement rate more reflective of the value that we're bringing. I think at the current rate today, it's probably just around a $200 million market. And if we can get the rate that we believe we probably add to, it's is probably a $500-plus million market, right? So we're certainly excited by it. The one thing that I think ends up being a little bit of an advantage in going in at the Holter rate is you don't have this argument of, well, it's more expensive, so I'm going to continue to use the old technology. I mean we're at parity now. So there's a real opportunity to come in very quickly, build a base, go head to head, demonstrate superior outcomes and then argue for a higher rate. So we'll give it a shot.

I mean maybe to push on that a little bit, the -- even a parity in that way, I still don't really get being comparatively new to this, I covered Philips for like 15 years, but why are people still using Holter monitors? It's a bit of a weird conundrum. Is it just like the inertia in the system, it just takes time.

I think that's a little bit -- that's a part of the Japanese culture, right? And it's a very loyal culture. They're loyal to their own relationships, vendor relationships. We've been doing business with these folks for a long period of time. They've been trained up in this way is what they know. I think there's a lot to overcome on that. Now when you sit down, I think when -- the last time I was over there just before launch, it was impressive to look across the room and see all the folks from the Japanese Heart Rhythm Society from the very senior leaders, the President of the society all the way down through their fellows sort of in the room supporting our efforts to get into the market. So it's not going to be the lack of sort of that high-level support that we need. It's going to be changing behaviors. It's going to be education. It's going to be those sort of things. And it's no different than the early times in the U.S. market.

But even in the U.S., there's still this like weird sleeve that refuses.

There's still 1.5 million, right, short-term Holters being prescribed. It's kind of silly. I mean, you've got data now that would tell you 65%, nearly 65% of all arrhythmias, even in a symptomatic population that get diagnosed happen after 48 hours. Why are we still prescribing short duration 48 hours or less Holter monitors? This is silly. There's 1.5 million of them out there, right, and another 0.5 million of event. I mean there's close to a $500 million market still serving those older technologies. So I think that will shift. I don't know that you're never going to get them completely out of the market, but there's no reason for them to continue to be north of 1 million, 1.5 million prescriptions every single year. So there's such a better way to get at this. But it comes back to it's what they're used to. We've got to educate them. A lot of this happens out in rural settings, right? So how do you get out to find these folks. But there's a path there. We'll get there. But it is surprising to see how much still happens through that [indiscernible].

You do a lot of these meetings, you do a lot of cash outs and things like that. You got a lot of questions. Are there anything that you are surprised you don't get asked or that the market is so fixated on that compared to what you're focused on internally that it doesn't -- just doesn't feel out?

I think -- I think for the most part, our folks understand the story pretty well. The thing that we don't get asked a lot that I suspect we'll start to get asked more, but we're certainly spending a lot of time internally on this is just building up the platform. I think we have a real right to win and sleep. I think we will absolutely get to the point where we can diagnose sleep disease off of the chest. I think as we push hard in the primary care, one of the big ideas that I have around that is that if we can get the primary care and if we can make it as easy to find arrhythmias as we have, but transfer that over into other disease states like sleep disease, I think we have a right to win there. And I think that we will win there. And so we're pushing full steam ahead internally on developing that capability, ultimately submitting something to the FDA here in the future that will give us the ability to diagnose sleep off of the same patch. Potentially, you end up looking at a scenario where all of a sudden, your average revenue per pass goes from $300 today to $500 in the future. I love what that does in the margin profile of the business. So I wish we talked more about that probably. I understand why we don't. There's a lot in the core business that we had to solve over the last 18, 24 months. I feel great about where we're at with the FDA at this point. I feel great that they know where we're taking the product profile and into the future, but I suspect we'll probably start talking more about that into the future. But I think that's just a tremendous opportunity for us.

Is there a partnership doable with one of the OSA players and...

Yes, I think -- look, I don't have any interest in offering up a therapeutic in this space. But I have all the interest in the world of sort of leveraging the relationships they might have to help us diagnose earlier and then hand them over to those folks, right? So I think there's great opportunity there. I think those are discussions there they're active, right? We have them. I think we're not quite ready yet. Well, we don't have a diagnostic tool just yet. When we do, I think some of those things can move at a faster pace, but I think it makes all the sense in the world that if we're going to go find this disease, we need to make sure the patients and new systems that we're finding it with, again, a system is not super interested in just diagnosing more, not knowing what to do with it. But if we can couple that with a therapeutic offering or a journey for that patient to get the care they need, I think now you're starting to offer something really valuable to these folks. So yes, I think there's a pathway there at some point.

Love it. Quentin, thank you so much.

Yes. Thanks for having us.

Thanks.