What's up at CardioNet?
On the surface, former CardioNet CEO Arie Cohen appeared to have a good year. His company floated a successful IPO (one of the few this year), it looks like they are going to make the numbers expected of them for 2008, and growth prospects appear bright. Now, though, he is out of a job (see press release).
Its hard to say how much of the recent success of Conshohocken's CardioNet is due to Cohen. He was only there 15 months. However, when you appear to be doing a good job on Wall Street's terms, you expect to keep it.
I listened in to CardioNet's conference call yesterday to get a better idea of what when on.
New interim President & CEO Randy Thurman suggested (my translation) that Cohen was somewhat overwhelmed by the challenges of being CEO of a high growth, publicly traded company. He said that the Board found the gap between Cohen's limited experience in this role and the growth potential of the company to be too great to be comfortable with. Ironically, Cohen ran a division under Thurman at VIASYS, the company he sold for $1.5 billion to Cardinal Health in 2007.
CardioNet's main application right now is remote wireless monitoring of patients with cardiac arrhythmias, a service I can certainly appreciate since I had a family member dealing with that not too long ago (I wish I had known about their service then). The company's primary immediate objective is to grow market share for that application, but they also believe there are other medical applications the technology can be expanded to. They expect solid growth in 2009, but indicate earnings growth may be limited by "incremental investments", particularly in expanding the salesforce from about 100 currently to 140 by year end. The search for a new CEO may take several months, after which Thurman will remain in his current role of Executive Chairman of the Board.
As for Mr. Cohen, I'm sure he will find another opportunity rather quickly if he wants to.
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