BIRMINGHAM, Alabama (January 30, 2020)—The introduction of several new CPAP masks over the past 15 months helped drive strong earnings for ResMed, the company reported in its quarterly earnings call on January 30.
ResMed CEO Mick Farrell said the company saw revenue of $387.8 million in its “masks and other” category in the second quarter of FY2020 in the U.S., Canada, and Latin America. That’s up from $326.1 million in the same quarter last year, or a 19% increase. Farrell said with software sales pulled out, the true figure was likely closer to a 17% increase.
Overall, ResMed reported 14% growth its sleep and respiratory care business in the U.S. territory, with revenue of $778.2 in the second quarter of FY2020 compared to $685 million in the same quarter of FY2019.
Jim Hollingshead, president of ResMed’s sleep business, said he’s confident that much of the growth comes from drawing new CPAP patients.
“We’re likely to also be getting competitor switching, but we’re pretty confident we’re taking new patient share successfully,” he said on the call.
Earlier this month, the company introduced the AirFit F30i, its first tube-up full-face CPAP mask. It introduced the AirFit N30i and the AirFit P30i in 2019. Most of the new masks were designed to meet the needs of customers the company describes as either in the “minimalist” category, who prefer a smaller, lighter mask,” or in the “freedom” category, who need a mask that allows them to change positions frequently while sleeping.
Company officials also announced that ResMed has agreed to acquire Snapworx, a patient management platform based on artificial intelligence. The privately held Tennessee-based company will become part of Resmed’s software subsidiary Brightree.
“It was partnering with our Brightree platform and performing really well,” Farrell said, adding that Snapworx turned out to allow “better adherence and better engagement with both the HME and most importantly, with the end-user customer, the patient.”
Overall, he said, the company the company affected just over 100 million lives at the end of 2019; its goal is to increase that to 250 million lives in 2025. He said ResMed is well positioned to grow in the second half of FY2020 and for the long-term and is focused on improving health outcomes and creating smooth transitions along the continuum of care.
“We see a future where patients seamlessly transfer from HME to skilled nursing facility to homecare and hospice providers and beyond with reduced costs and increased efficiency—as well as a higher quality of life for the person in out-of-hospital care.”
Other things discussed on the call included:
- ResMed’s non-sleep-related home medical equipment (HME) resupply business is doing well, although officials declined to report specifics, saying its diabetic supplies, orthotics and urology products are not material to the company’s overall.
“They’re going well and customers are adopting them and I’d love them to become a material part of our overall business to break out lake that but it’s early days,” Farrell said.
- The company is waiting to see what happens with competitive bidding, said David Pendarvis, chief administrative officer and global general counsel, who said he is confident that HME providers were well-educated and prepared to bid well and understand lead-item pricing.
“However reimbursement settles out in the Medicare space, we consider there will continue to be strong demand for masks and supplies, and that will be an important part of our customers’ business and patient success,” he said.
- ResMed is also watching to see what happens with non-invasive ventilation and competitive bidding; Pendarvis said he believes that its HME customers knew to account for in-home service needs for the products when making bids and things that reimbursement reductions aren’t likely to be dramatic as they were for sleep products in prior bid rounds.