By Emma Koehn
Medtech giant ResMed is expanding its focus to fighting insomnia as it doubles down on digital health investments after another year of huge demand for its products.
Early on Friday the dual NYSE and ASX-listed company revealed a 13 per cent jump in annual revenues in constant currency terms, banking $US3.6 billion ($5.1 billion). Operating profits were up 8 per cent, with the business declaring a quarterly cash dividend of US44c per share.
ResMed says it will be able to keep market share gains caused by a major recall of products at competitor Philips.Credit:
The numbers came after a strong final quarter of the year, in which ResMed fought hard for semiconductor chips required to make its sleep apnoea treatment products. Global shortages of component parts have capped the number of units the company can produce.
Chief executive Mick Farrell said he has spent the past few months pleading with suppliers to prioritise ResMed’s orders for healthcare devices over companies wanting the chips for consumer electronics.
“Not every supplier said ‘Yes, I am going to prioritise you over a car or a cloud-connected refrigerator’ - but we got enough [parts] to get double-digit growth,” he told The Sydney Morning Herald and The Age.
The company is forecasting that supply chain constraints will improve over the next few months, helping the business fulfil strong orders for devices. Ongoing troubles at competitor Philips have helped drive significant demand for ResMed products, after a recall of Philips sleep treatment devices left a big gap in the market.
The company’s chief financial officer Brett Sandercock told analysts on a call early on Friday morning that the ResMed made between $US200 million and $US250 million due to the Philips recall.
ResMed also announced two acquisitions of German companies over the past two months. Its $US1 billion takeover of out-of-hospital care software maker Medifox Dan amps up its portfolio of digital health tools, while its purchase of insomnia treatments startup business Mementoropens up a new area of focus for the company.
Mementor makes a prescription-only therapy app called Somnio, which is designed to help patients who have insomnia.
Farrell said ResMed has been investigating tools for treating other sleep issues for years.
“We have probably looked at 100 companies over the past 33 years and none of them have met our quality, due diligence and financial and clinical [requirements]. This one did.”
Farrell said the purchase gives the business an opportunity to extend its offer to patients, starting in Germany, one of the company’s largest markets.
“This could expand ResMed in Germany from being a sleep apnoea company to being a sleep therapy company, really expanding our scope.”
Shares have gained 7.2 per cent over the past month to close at $34.62 on Thursday.
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