ResMed prepares to grow demand for travel CPAPs

Company officials also address minimal growth in mask revenues
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Friday, January 27, 2017

SAN DIEGO – ResMed aims to blow up the market for travel CPAP devices with its soon-to-be launched AirMini, company officials said during a conference call Jan. 23 to discuss second quarter earnings.

When an analyst on the call asked how big the market is for travel CPAPs, CEO Mick Farrell acknowledged that it’s a “a very small niche,” but that HME providers and their customers are increasingly embracing cash sales, and that ResMed is ready to leverage that changing mindset.

“We think we will actually expand on what is currently a very small niche and create a sizeable segment of travel CPAP users that are willing to pay cash,” he said. “(We will) work with our homecare providers to access these products and really make it part of their care, so that you can have the same experience when you’re traveling around the country and around the world as you do at home.”

ResMed announced in early January that it had received clearance from the U.S. Food and Drug Administration for its AirMini, which it bills as “the world’s smallest continuous positive airway pressure device.” It plans to launch the device sometime before June 30.

Jim Hollingshead backed Farrell’s optimism on the AirMini, saying that there is “pent up demand” from HME providers and patients for a travel CPAP, despite other companies already in the market.

“There are solutions on the market, but they’re not up to snuff,” said Hollingshead, president of the Americas. “We believe ours is superior and that we’ll grow demand in that category.”

ResMed officials also addressed minimal growth in the quarter for masks and accessories—just 4%, compared to 13% for flow generators. They expect that number to improve in the third and fourth quarters, as the company makes inroads with its recently launched AirFit F20 full-face mask and N20 nasal mask, which feature an “InfinitySeal” technology that allows the masks to fit 97% to 99% of patients.

“It’s early days in the rollout,” Farrell said. “The U.S. team got (these products) the week of Thanksgiving, so they’ve really only had half a quarter (to show them to providers), with Thanksgiving and Christmas. We do expect as we look at Q3 and Q4 and start to ramp up production, there’ll be a slow steady gradual increase. These technologies have a lot of legs.”

ResMed officials said the reception in the market to the F20 and N20 has been so good that the company hasn’t been able to keep up with demand for some SKUs.

“What we’re finding with the new production technology that we’re using for this InfinitySeal is that, as we ramp up across the different stocking units, for some of those SKUs, we are not keeping up with very high demand,” Farrell said. “But as we look forward to Q3 and Q4, we will start to catch up and we expect by certainly the end of Q4 we’ll be well ahead of the demand for the product.”