Boston Scientific said it received a subpoena from the U.S. Department of Justice that seeks documents and information related to its ambulatory electrocardiography monitoring business.
The company is cooperating with the DOJ in responding to the subpoena, which it received on April 5, Boston Scientific said in its 10-Q filing on Thursday. A spokesperson for the company declined to comment further on the probe.
The disclosure was made on the same day that iRhythm Technologies, maker of the Zio XT ambulatory heart monitor, also said it received a DOJ subpoena seeking various documents tied to its products and services. The request for information came from the consumer protection branch in the agency’s civil division.
CEO Quentin Blackford, speaking on iRhythm’s earnings call Thursday, didn’t discuss the details of the subpoena, but said the organization has been increasing its regulatory compliance focus over the past year and a half.
Several analysts, in reports issued after iRhythm’s earnings release, said the investigation appeared to be a larger probe into the ambulatory ECG industry rather than targeted to any one company. They noted that Boston Scientific received a similar subpoena.
“It’s not easy to look past something as intimidating-sounding as a Department of Justice subpoena, but we think it’s premature to panic here,” J.P. Morgan analyst Allen Gong wrote in a research note.
The DOJ’s consumer protection branch has a broad mandate and often pursues cases to recoup losses involving fraud and abuse of federal funds, Gong said.
Needham analyst David Saxon said he expected the investigation would take several years and would not affect iRhythm’s growth.
BTIG analyst Marie Thibault said while the inquiry looked to be industry related rather than company related, it was still “unsettling” and could cast a “small overhang” on shares of iRhythm.
Boston Scientific’s shares were little changed at $51.72 in afternoon trading Friday, while shares of iRhythm dropped about 6% to $126.02.