Biotel has developed a wireless cardiac event monitor which sits very well alongside CardioNet’s existing product portfolio, but also operates a subsidiary – called Agility Centralized Research Services – which provides event, Holter and electrocardiogram (ECG) monitoring services to the medical device and pharmaceutical industries, CROs and academic institutions.
CardioNet has made no secret of its ambitions to tap into the contract research industry, where it sees great potential for its monitoring product portfolio.
The Biotel deal is the first step in the strategic expansion of the CardioNet business outlined earlier this year, in which it outlined plans to leverage its monitoring devices within the clinical research sector.
CardioNet already has access to a comprehensive network of heart specialists, and already supports third-party clinical trials which use its monitoring devices as diagnostic tools.
That approach already allows CardioNet “to support the academic investigations of leading researchers or the commercial efforts of drug development companies,” commented Randy Thurman, CardioNet’s CEO.
“We previously identified clinical services as a natural and strategic extension of our business, for both our current cardiac monitoring service and potential new monitoring markets,” he added. “There is strong demand in the healthcare industry for these services.”
Previously, Thurman has estimated that the US market for cardiac monitoring services is valued at around $2bn, and could get larger with increased take-up of the technology in clinical trials and greater penetration in medical practice.
“This service can be a strategic asset to medical device and pharmaceutical companies during product development,” he said.
CardioNet is making a cash offering of $4.82 per Biotel share, and expects the acquisition, which has already been approved by shareholders of both companies, to close in mid-2009. At the time of writing Biotel’s stock was trading at $4.55.