ResMed says ‘innovation’ in masks pays off

Company also discusses software investments, competitive bidding
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Friday, January 31, 2020

SAN DIEGO – ResMed’s masks and accessories hit constant currency growth of 19% in the U.S., Canada and Latin America for the second quarter of fiscal year 2020.

They hit growth of 16% globally.

“(That’s) well ahead of market growth rates, indicating that we gained significant market share,” said CEO Mick Farrell during a conference call Jan. 30 to discuss the company’s latest financial results.

ResMed’s CPAP devices grew 9% in the U.S., Canada and Latin America, and 8% globally for the quarter.

Farrell credited the growth in masks, in part, to a “steady rhythm of innovation.” ResMed launched its F30 in the second quarter, and plans to launch N30, N30i and P30i masks in the next 12 months.

“We’re ensuring that we have the right mask for the patient every time,” he said.

Farrell pointed out that ResMed’s newest masks aren’t replacing existing masks but going after patients with “underserved or under met” needs, like those with claustrophobia.

Other factors helping to boost mask sales: increased adherence with help from digital health tools like AirView, which now helps providers manage more than 12 million patients, and myAir, which is now used by more than 2 million patients.

“We are using digital health technology to transform the industry,” Farrell said.

Other highlights from the call:

Investing in MatrixCare

ResMed is increasing its investment in MatrixCare, a software platform for skilled nursing facilities, focusing on introducing a new module.

“It took around 24 months to see strong sustainable returns from our investments in R&D and our management team at Brightree,” Farrell said. “We think we can meet or beat that timeline for strong and sustainable returns from our MatrixCare investments.”

ResMed’s software-as-a-service portfolio grew 37% year-over-year in the second quarter, benefiting from the MatrixCare acquisition. Excluding that acquisition, the portfolio grew in line with the market in the quarter.

Bidding non-invasive vents

ResMed is cautiously bullish on non-invasive vents being included in Medicare’s competitive bidding program for the first time as part of Round 2021.

“There also have been reductions in that reimbursement over the past few years leading up to this, so it’s not necessarily the case that you’ll see the same kinds of reductions that you saw in the Round 2 kind of range previously for sleep products,” said David Pendarvis, chief administrative officer and global general counsel. “It’s a smaller group of customers who actually do this kind of business, and they’re probably likely to be focused on what their real cost of serving is.”