Medtronic-Backed Itamar Seeks Partners to Boost Growth

Itamar Medical Ltd. is in talks for partnerships from Sweden to Canada as the maker of sleep apnea and heart diagnostics seeks to boost sales after seven years of sluggish growth, Chief Executive Officer Gilad Glick said.

While Itamar doesn’t issue official guidance, “my personal compensation is maximized only if I am growing this company 40 percent year over year,” Glick said. The company signed sales accords in 2014 with Medtronic Inc., its biggest shareholder, and Tokyo-based Nihon Kohden Corp. as it sought to penetrate new markets.

“The focus is executing on the deals signed this year, but more deals are possible,” Glick said in an interview on Dec. 24 at the company’s Caesarea, Israel headquarters. “We’re in talks in Canada and Sweden for sleep apnea devices,” a finger insert that allows patients to be monitored via their pulse during sleep, he said.

Itamar listed in Tel Aviv in 2007 and its shares rose to a record in January 2010 as investors bet demand for its diagnostic devices would grow. The stock has since lost 38 percent amid disappointing sales. Glick, a former manager at a Johnson & Johnson unit who joined Itamar in 2013, is trying to revive growth by signing accords with distributors.

Changing Approach

The company signed an agreement with Beijing Viable Medical Investment Co. to sell its heart-diagnostics device in China, it said in an e-mailed statement today. As part of the accord, Itamar received a first order of $550,000 from the Chinese partner. The shares rose 4.3 percent to 1.77 shekels at the close in Tel Aviv.

The sleep apnea device has struggled to compete with diagnostic standards that measure breathing, Glick said. The disorder, in which normal breathing is interrupted, afflicts more than 18 million Americans, according to the National Sleep Foundation.

Glick said that the company’s potential will be better understood when it lists in the U.S.

“It’s disappointing that we are not covered by the Israeli market,” he said. “We are a mid-cap in Israeli terms and still nobody decided that we should be covered. In the long-run, Itamar belongs in the Nasdaq. It is a matter of the right timing for us and the right timing for the market.”

Itamar is now partnering with Medtronic and targeting U.S. cardiologists directly instead of pulmonologists. Sleep apnea is a condition that can often lead to congestive heart failure, so cardiologists have a direct interest in diagnosing patients, Glick said.

“We’re changing the paradigm of the entire approach to sleep apnea from a tiredness and snoring disease to a major contributor to cardiac diseases,” Glick said. “If you don’t take care of sleep apnea you have worse cardiac diseases and worse readmission rates and much more costs to the system.”

The company will publish an update to investors on the progress of its partnerships early next year, Glick said.

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