Resmed targets ‘strong execution’ in marketing

SAN DIEGO – Resmed is betting that a growing slate of consumer marketing programs and partnerships will help it reach the high end of its 5% to 7% core constant currency revenue growth target for fiscal year 2027.

The initiatives did not contribute materially to first-quarter results, but CEO Mick Farrell says efforts to raise awareness of sleep apnea and encourage patients to seek treatment can help drive longer-term growth.

“(CFO Aaron Bloomer) talked about what would get us to that 5% and that 7% revenue growth,” Farrell said during a recent conference call to discuss first-quarter results. “That’s about strong execution in our marketing programs and achieving great results. And 5% is if we don’t achieve great results. I’m an optimist and I love lucky 7. We’re aiming for that, but it’s a quarter in, quarter out fight, and we’ve got a lot going on.”

Resmed reported revenue increased 7% to $1.4 billion on a core constant currency basis in the first quarter. In the Americas, sleep device revenue increased 6%, while masks and other revenue increased 10%.

Programs, partnerships expand sleep apnea awareness

Among the initiatives Farrell highlighted during a recent conference call:

• A “CPAP Baddies” community that he says helps normalize therapy and make it more approachable, encouraging people to start and stay on therapy
• The “In Bed With” interview series featuring sleep doctors and other sleep wellness thought leaders that he says helps more people recognize symptoms of sleep apnea and seek care

Farrell also highlighted partnerships with ŌURA and, more recently, Eight Sleep that help people recognize the signs of obstructive sleep apnea (OSA) and seek help.

As of Sept. 30, about 28,000 ŌURA users had been directed to Resmed’s website from the ŌURA app, more than double the number at the end of July.

“(As a result), many thousands of users have taken the Resmed sleep assessment right there on resmed.com,” he said.

Additionally, Resmed has a new partnership with 23XI Racing and NASCAR Cup Series driver Tyler Reddick, and its ongoing continuing medical education programs have now been completed about 108,000 times by more than 63,000 unique clinicians.

Resmed refreshes myAir app

Resmed has refreshed its myAir patient app, adding the ability to see a nightly timeline of events and adjust comfort settings.

In several geographies, the app also includes a new resupply service that displays a visual countdown for each mask or other accessory.

“It can send timed reminders when masks and accessories are eligible for replacement, helping encourage action by patients and increasing convenience for the patient and making it easier for the provider,” Farrell said. “Watch this space as we increase availability of this type of service for consumers who want to access better resupply.”

Astral recall carries $42M charge

Resmed has set aside $42 million to facilitate a recall of certain Astral ventilators. The company has also announced its decision to discontinue news sales of the ventilators.

Of that decision, Farrell said:

“We recognize that home care provider customers need to be able to plan for future ventilation needs. That commitment is why we recently announced that we will no longer sell the Astral device. We’re focusing all available components to service Astral devices for existing patients with prioritization based on the highest clinical acuity and guided by clinical judgment.”

Bloomer pointed out during the call that Resmed’s revenue growth target includes a 130-basis point headwind – or around $75 million – from the Astral exit.

Resmed eyes tuck-in acquisitions

Resmed, which bought Noctrix Health in June and sold MatrixCare in July, will continue making moves to optimize its portfolio.

Farrell said the company is actively looking at tuck-in acquisitions in the $100 million to $500 million range. He also pointed to Resmed’s minority stakes in several companies that could potentially become its next Brightree, which it bought in 2016.

“So early days in this,” he said. “There’s a number of candidates that we look at out there, but the money that we have is not burning a hole in our pocket.”