ResMed set to launch ‘real winner’

Flat growth for masks offset by double-digit growth for flow generators in first quarter
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Friday, October 28, 2016

SAN DIEGO – ResMed expects mask and accessories growth in the Americas to rebound with the upcoming launch of its AirFit 20 series.

ResMed reported flat growth in masks and accessories in the Americas for the first quarter ended Sept. 30, 2016; it reported 4% growth in Europe, the Middle East and Africa (EMEA) and Asia Pacific and Japan (APAC).

“We’ve gotten some really good early data from the controlled product launches of the F20 in Europe and in the U.S.,” said CEO Mick Farrell during an Oct. 25 conference call to discuss financial results for the first quarter. “The F20 is a fabulous full-face mask, one of the best I’ve seen ResMed produce, and I think as you look forward over the next number of quarters, this thing is going to be a real winner for us.”

ResMed launched the AirFit F20 in Europe on Oct. 24 and plans to launch the series in the U.S. in the second quarter. It hasn’t launched a new mask in the U.S. in two years.

The flat growth in mask and accessories was buoyed by 10% growth in flow generators in the Americas in the first quarter, driven by the AirSense series and the accompanying AirSolutions software platform, which includes AirView, U-Sleep and myAir.

To put that in perspective: “Device growth was up against a robust 40% year-over-year comparable,” Farrell said.

Double-digit growth in flow generators and contributions from Brightree helped ResMed reach $301 million in revenues in the Americas in the first quarter, an 18% increase over the same period last year. Excluding Brightree’s contribution, revenues were $267.9 million, a 5% increase.

“The Brightree growth is in that sort of low-to-mid teens area—good, solid double-digit growth,” Farrell said. “It’s 80%, 90% recurring revenue. So the Brightree business is a very solid and strong recurring revenue business for us.”

In addition to product launches, ResMed will look to its growing presence in the connected care space to sustain growth for the company.

“One of the main themes at AdvaMed 2016 (Oct. 17-19 in Minneapolis) was the importance of digital health and the convergence of technology from data analytics to connectivity to patient engagement,” Farrell said. “This represents a significant shift from two to three years ago. While many companies are talking about digital health and connected care strategies, just a few of us are leading the way to value.”

Overall, ResMed reported revenues of $465.4 million for the first quarter, a 13% increase compared to the same period the previous year. Excluding Brightree, revenues were $432.4 million, a 5% increase.

ResMed reported a net income of $76.1 million for the first quarter, a 4% decrease.