CardioNet, a wireless remote cardiac monitoring company, has hired Lazard Freres & Co. of New York to evaluate its options, CEO Randy Thurman told investors on a call this morning. Analysts believe the move means CardioNet may seriously consider a sale.
According to the Wall Street Journal, CardioNet previously had hinted it would consider a sale and Jefferies & Co. analyst Joshua Jennings told the WSJ that CardioNet's move to hire Lazard shows that the previous talk wasn't just hype.
CardioNet also told investors this morning that it plans to cut $15 million in operating costs in order to remain afloat -- the company has already cut $8 million in expenses this year. Thurman said the company's plans to cut costs include job reductions, operating efficiencies particularly in the area of collecting on accounts receivable, and reducing the use of outside consultants.
The moves to reduce costs followed a big blow on the reimbursement front: CardioNet's reimbursement rate from Highmark CMS was slashed by one third beginning in September of this year. The rate cut followed months of rumors that one was imminent. CardioNet also announced it was preparing to launch a new version of its flagship MCOT technology, which can diagnose and monitor irregular heartbeats. The new system is called C5 internally.
Thurman told investors that C5 will feature improved functionality, expanded clinical applications and a lower product production cost.
For more on CardioNet's investor call, read this article from the WSJ