Luke Timmerman

June 6th, 2013

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[Updated: 3:55 pm PT] Medical device startups often need to live on shoestring budgets as a lot of venture capital has dried up in the wake of the Great Recession, but Bellevue, WA-based Cardiac Insight has proven that you can sometimes come up with innovative new devices for less than $2 million.

The company, a spinout from the University of Washington, has won FDA clearance to start selling a tiny monitoring device that can spot atrial fibrilliation (a-fib), a common form of irregular heartbeat that can lead to stroke. The device, called Stealth, weighs about one-fourth of an ounce, has a flexible circuit board that makes it easy to wear, and uses a proprietary algorithm to read electrocardiography patterns for signs of a-fib, CEO Brad Harlow has said. In a document Cardiac Insight is circulating to investors, the company says it can produce the device for less than $20 per unit.

[Updated with CEO comment] Cardiac Insight, which came from the lab of David Linker, is now tasked with finding a way to scale up, and win a second FDA approval that it intends to get before marketing the product, Harlow said. The market is potentially a big one, as about 2.2 million people in the U.S. are thought to have a-fib, and it leads to an estimated 90,000 strokes a year. The Cardiac Insight device will also have to position itself to compete with San Francisco-based iRhythm, which already markets an a-fib detection device called the Zio Patch.

Cardiac Insight is betting that physicians will like its device because patients can wear it for a week, come back for a visit, and it will spit out heart rhythm results in an automatic report. The company is also seeking partners to develop a similar wearable device that can help spot signs of sleep apnea.

Cardiac Insight’s investors include several well-known names in the medical device community, including Kirby Cramer, the former chairman of Sonosite; Dick Martin, the former CEO of Physio-Control; and WRF Capital.