Resmed Expands into Restless Leg Syndrome Market
An Australian-American medical giant known for its innovative products in treating sleep apnoea is now expanding its reach into another significant sleep disorder—restless leg syndrome. Resmed has acquired Noctrix Health, a California-based company that specializes in wearable devices designed to treat Will-Ekbom Disease, for $US360 million ($500 million).
Restless leg syndrome is the third most common sleep disorder, affecting up to seven per cent of the adult population in the United States, according to Resmed’s CEO, Mick Farrell, who spoke with AAP on Friday.
“Their legs will pivot and kick, and it’s very bad for the bed partner, obviously,” he said. “It can be treated by drugs, but they have awful side effects, so many people don’t; they just go without treatment, and have this awful thing all their lives.”
Noctrix’s newly launched Nidra device uses cuffs that wrap around a patient’s leg and provide electro-stimulation to stop the twitching associated with restless leg syndrome. The device is similar to Resmed’s continuous positive airway pressure (CPAP) machines used to mitigate sleep apnoea, including snoring and breathing interruptions.
Both are non-invasive devices and available via prescription from sleep doctors, Mr Farrell said.
Resmed, which is listed on both the US and Australian stock exchanges, also offers digital products for patients suffering from insomnia.
On Friday, Resmed announced that revenue for the third quarter increased by 11 per cent to $US1.4 billion ($A2 billion), while gross margin climbed by 2.9 percentage points. During the quarter, the company gathered more evidence that Ozempic-style GLP-1 drugs could be a tailwind rather than a headwind for Resmed, according to Mr Farrell.
Initially, investors thought the opposite, as sleep apnoea is closely linked to obesity, leading to a significant sell-off in Resmed shares in late 2023 and early 2024.
Resmed’s tracking of 1.7 million patients using a CPAP machine and then prescribed a GLP-1 drug showed they were five per cent more likely to continue using a CPAP machine two years later compared to those not prescribed a GLP-1 drug.
“I have the correlation. I don’t know the causality or the root cause of it. We’ve got a lot of hypotheses,” Mr Farrell said. He suggested that weight loss may lower the pressure needed to keep a patient’s tongue off their uvula, making CPAP machines more comfortable to use.
RBC Capital Markets analyst Craig Wong-Pan noted that Resmed’s results were slightly above consensus. However, its Australian shares dropped 4.3 per cent to $28.51 in afternoon trading.
Investors might have been concerned about the retirement of the company’s chief financial officer, Brett Sandercock, who has served in that role for the past 20 years. He will be replaced by Aaron Bloomer, who recently held a similar position at cancer diagnostics company Exact Sciences.
