VirtuOx gains foothold

CORAL SPRINGS, Fla. - VirtuOx made a major play to consolidate the market for overnight pulse oximetry testing this month when it acquired Decatur, Ala.-based Instant Diagnostic Systems.

VirtuOx recently performed its 3 millionth test (not only for oximetry but also for sleep apnea and insomnia testing), and IDS to date has performed more than 2 million oximetry and sleep apnea tests.

“They were our No. 1 competitor,” said Kyle Miko, co-founder and COO of VirtuOx. “To have the opportunity to purchase your No. 1 competitor and take market share is a top priority.”

IDS was most recently owned by Cardinal Health. Mickey Letson and his father started IDS as part of Letco Companies, then sold it to Harvard Drug Group, which sold it to a private equity firm, which then sold it to Cardinal.

Because IDS focuses solely on oximetry and sleep apnea testing, VirtuOx plans to bring its additional services and products to bear on the company's customer base.

“We do diagnostic procedures for insomnia, which they don't do, and we manufacture a number of medical devices like VirtuClean that sanitizes CPAP devices, which they don't do,” Miko said. “So we bring additional testing and products to the table.”

VirtuOx will keep running IDS as a distinct company from Alabama and has retained 28 of the company's 35 employees, bringing its total number of employees to more than 100 full-time. It will keep IDS's user interface intact, as well, so their customers shouldn't see or feel a difference.

“The only thing that changes is the back-end billing that we do to the patients and insurance companies,” Miko said.

Now that it has a secure foothold in the oximetry testing market, VirtuOx is looking to broaden its scope into the mobile cardiac telemetry market, with acquisitions in that space possible.

“A lot of patients have crossover,” Miko said. “Some may need one test and would benefit from additional tests. Someone with atrial fibrillation might have sleep apnea, which is causing the AFIB. If we had cardiac testing added to our existing platform, we'd have the possibility of four different procedural tests with overlap.”