Twin Launch by ResMed

Zacks

Leading provider of medical equipment for treating and diagnosing sleep disordered breathing (:SDB) ResMed Inc. (RMD) recently launched its Quattro Air full face mask to aid positive airway pressure therapy. The company will start shipping the breakthrough offering from Jun 7, 2013.

As per management, the company spent over $100 million in research and development expenditure in 2012 to develop this ground breaking therapeutic mask. ResMed asserts that its Quattro Air full face mask is the lightest full face mask currently available in the market. With a weight of 3.3 ounces, the Quattro mask is 45% lighter than the Mirage Quattro mask. Mirage is the earlier version manufactured by the company and is presently the best selling full face mask in the U.S.

The Quattro air mask includes ResMed’s market leading technology such as the enhanced dual-wall spring air cushion, flex-wing forehead support and circular diffuse vent among others. Given its innovative technology and light weight, the Quattro air mask should witness rising sales uptake following its market launch.

In a parallel announcement, ResMed launched SleepSeeker online tool to increase patient engagement in therapy. The online tool is hosted on the company’s online patient support community WakeUptoSleep.com.

The SleepSeeker tool enables patients using ResMed’s S9 series air flow generators to track their therapy data as well as any apnea or hypoapnea events for further corrective action. Thus, this online tool improves patient involvement and engagement in the therapy.

ResMed currently holds a major position in the worldwide market for generators, masks, and related accessories for the treatment of SDB, especially obstructive sleep apnea (:OSA). The company enjoys a competitive edge over other players in the market it serves.  

Considering the SDB market overview, there is massive growth opportunity driven by lifestyle trends, further penetration and increasing awareness. The recent developments reflect ResMed’s undertaking to foster growth on the back of innovation, increasing awareness and patient engagement. The launch of the Quattro air mask should improve sales of the company’s mask franchise which faced a slowdown in the third quarter.

While the international market still offers some of the biggest growth opportunities for ResMed, the unfavorable economic environment in Europe remains an overhang. The stock carries a Zacks Rank #3 (Hold).

While we have a neutral stance on ResMed, other medical stocks such as Conceptus Inc. (CPTS), Haemonetics Corporation (HAE) and Cyberonics Inc. (CYBX) are likely to do well. These stocks carry a Zacks Rank #1 (Strong Buy).

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