FDA Updates and MCT Timing
Q: What's the status on FDA letter, DOJ, and MCT timing?
A: The company is encouraged by ongoing progress with the FDA, collaborating to resolve the warning letter. Approval is expected a couple of months later than mid-year, but confidence has never been higher. For the MCT product, they plan to file in the latter part of the second half of 2024 and bring it to market in 2025. Regarding the DOJ inquiry, there's nothing new to update at this time.

Revenue Guidance and Execution
Q: How did you set guidance considering strong Q1? Prudence baked in?
A: They passed through the strong first-quarter results but are maintaining guidance for the rest of the year. While they feel good about tailwinds, execution is required for launching Zio Monitor, navigating FDA conversations, and international commercial launch. They believe growth acceleration is achievable but will wait to see execution play through before adjusting guidance.

MCT Market Share Opportunity
Q: Where can your MCT market share move to?
A: There's significant room to capture market share in the MCT space. Every 10 percentage points of growth in MCT could represent nearly $100 million of incremental revenue. They believe they have a high opportunity to win since the same customers prescribing Zio are also prescribing competitors' MCT products due to current gaps in their offering.

Gross Margin Improvements
Q: How will the IDTF transition impact gross margins?
A: The San Francisco IDTF hires are progressing nicely, with individuals taking about 6 to 9 months to become fully efficient. They anticipate gross margins improving from 66% to around 70% in the back half of the year. This improvement includes about 200 basis points from clinical technician efficiency, 100 basis points from automation, and another 100 basis points from scaling Zio Monitor.

Signify Health Partnership
Q: Update on Signify Health partnership and impact of CEO change?
A: The partnership remains strong and is still in the pilot phase, with plans for a broader commercial launch in the back half of the year. They don't believe the CEO transition at Signify Health will impact the partnership outlook.

Size of Signify Opportunity
Q: Can you frame the size of the Signify opportunity?
A: Early discussions suggest a significant opportunity. Data indicates that at least 25% of the population may be eligible due to comorbid conditions like diabetes, COPD, or obesity. If these rates apply to Signify's patient base, it represents a substantial market.

Zio Monitor Adoption and Compliance
Q: Are all new accounts on Zio Monitor? Is compliance improving?
A: Yes, all new accounts are starting with Zio Monitor, and they are approaching an 80% conversion of existing accounts. They're seeing improved compliance rates due to Zio Monitor's benefits. While some dynamics like increased home enrollment may affect return rates, overall, they expect compliance to improve over time.

Sleep Market Entry
Q: Why focus on sleep diagnostics?
A: The prevalence of obstructive sleep apnea is high, and many patients begin with cardiologists or primary care physicians. There's a natural synergy with their existing customer base. Utilizing their digital platform and IDTF capabilities, they aim to streamline the process by enabling physicians to prescribe home sleep tests, enhancing patient care.

Momentum into Q2
Q: Is strong momentum from Q1 continuing into Q2?
A: Yes, the momentum has continued into the second quarter, remaining unchanged through April, across both the monitor and AT product lines.

Epic Aura Integration
Q: How meaningful is the Epic Aura integration?
A: The partnership with Epic is expected to significantly reduce integration time from months to weeks, saving up to 75% of time. This efficiency can increase success odds and help capture more market share. They plan to pilot with selected accounts later this year and expand broadly in early 2025.