ResMed believes it has passed nadir in new patient flow

SAN DIEGO - ResMed has seen double-digit declines in new sleep apnea patient flow across all markets that have experienced lockdowns due to the COVID-19 pandemic, but the company expects a U-shaped recovery in its fiscal year 2021, says CEO Mick Farrell.

While Germany is back up to 85% of its pre-COVID-19 sleep lab capacity and China is at 50%, the United States is likely somewhere in between, at an average of about 70%, Farrell told investors during a conference call to discuss its fourth quarter and year-end financial results.

“We expect a steady, sequential, quarter by quarter sort of U-shaped recovery of the sleep apnea, COPD and asthma patient flow throughout fiscal year 2021,” he said. “Clearly, a highly effective vaccine or a highly efficacious treatment for COVID-19 could of course turn that U shape into a dramatic V-shaped recovery; however, we're not counting on that and an event like that remains an upside from what we call our expected or likely case scenario.”

ResMed reported CPAP device sales of $206 million for the fourth quarter in the U.S., Canada and Latin America, a 1% increase compared to the same period in the previous fiscal year. It reported mask and accessories sales of $195 million, a 7% increase, buoyed by resupply sales.

While sleep-related sales have suffered in April, May and June due to the pandemic, ventilator and accessory sales have been up, to the tune of an “extra” $125 million in the fourth quarter, Farrell says.

“During the fourth quarter, we produced around 100,000 invasive and non-invasive ventilators, including bi-level positive pressure devices, bringing our cumulative to over $150,000 vents that we produced since the beginning of the calendar year 2020,” he said.

But the same improving conditions that will help CPAP and mask sales rebound in July, August and September will likely cause vent sales to fall, Farrell said.

“We're not going to predict what that will be in the September quarter,” he said. “We're working on hospital, state and national bidding processes, but I can tell you that the volume of bidding and the volume of processes is significantly lower in the September quarter for that. It's ironic in some ways, because the populations of people now impacted - Brazil, India, Pakistan, Malaysia, Indonesia - you add up these countries and you start to get billions of people, and I would like to see demand significantly higher, because I think, humanitarian wise, we're going to need more ventilators.”