Resmed Makes a Bold Move into the Restless Leg Syndrome Market
Resmed, a global leader in sleep apnoea solutions, has made a significant investment by acquiring Noctrix Health for $US360 million. This acquisition marks Resmed’s expansion into the treatment of restless leg syndrome (RLS), also known as Will-Ekbom Disease. The condition affects approximately 7% of the US population, making it the third most common sleep disorder after insomnia and sleep apnoea.
Noctrix Health, based in California, has developed a wearable device called Nidra that uses electro-stimulation to alleviate the symptoms of RLS. The device features cuffs that wrap around a patient’s legs, offering a non-invasive solution to the persistent discomfort of restless legs during the night.
While some may suggest using a bar of soap under the bed to relieve the condition, Resmed relies on clinical evidence and scientific research to support its approach. According to Resmed CEO Mick Farrell, RLS shares a significant overlap with the company’s core market for sleep apnoea devices, presenting an opportunity for growth and innovation.
Strong Financial Performance Amid Acquisition
Despite the recent acquisition, Resmed reported impressive financial results for its March quarter. Revenue surged by 11% to $1.43 billion, while net earnings increased by 9% to $399 million. The company attributed these gains to rising demand for its sleep apnoea devices and masks in key markets such as the US, Canada, and Latin America.
Resmed also managed to improve its gross margin by 290 basis points, primarily due to cost improvements and operational efficiencies in manufacturing and logistics. The company remains confident in its ability to navigate market challenges, even as it faces competition from other medical device manufacturers like Cochlear.
Farrell highlighted that GLP-1 anti-obesity drugs have created a unique demand opportunity for Resmed, as more patients seek medical advice and monitoring through wearables. This trend is expected to further drive interest in Resmed’s products.
Analysts Remain Optimistic About Resmed
Despite a 3.7% drop in share price to a 52-week low, healthcare analysts remain positive about Resmed’s long-term prospects. Broker Morgans downgraded its target price for Resmed from $47 to $41.72, citing concerns over variability in US device growth. However, the firm described these concerns as “myopic and manageable.”
Canaccord Genuity maintains a buy rating for Resmed, adjusting its valuation to $44.50 per share. Macquarie Equities continues to recommend an outperform rating, with a target of $46.50 per share. Analysts note that Resmed has consistently demonstrated strong performance, even in the face of potential inflationary pressures.
Biotech Sector Faces Challenges in April
April proved to be a difficult month for the ASX biotech sector, with the index losing over 2% of its value. This decline brought the 12-month loss outside of the Big Four to more than 13%. Several companies experienced significant declines, including Cochlear, which fell by 44%, and CSL, which dropped 11% to its lowest level in nearly nine years.
In contrast, Resmed managed to limit its losses to just 7%, while ProMedicus rebounded by 15%. Starpharma was one of the standout performers, surging by 56%. Other notable gains included Immutep, Prescient Therapeutics, and Actinogen Medical, all of which saw their shares rise by around 25%.
Positive Developments in Other Biotech Stocks
Avecho, a company focused on insomnia treatments, rose by 52%, while Artrya, a heart device developer, gained 22%. On the other hand, Amplia, a prostate cancer drug developer, fell by 36% following a setback, although the stock had nearly doubled in March after positive trial results.
Paradigm Biopharmaceuticals and Proteomics International Laboratories also saw declines, with shares falling by 33% and 29%, respectively. 4D Medical, which had previously been a top performer, lost 26% of its value.
Syntara Receives FDA Approval for Myelofibrosis Drug Trial
Bell Potter maintained a speculative buy rating for Syntara, with a target price of 6 cents per share. The company recently received positive feedback from the FDA regarding the structure of its proposed phase IIb trial for a myelofibrosis drug. This approval removes a major barrier for the company to proceed with its final trial protocol.
However, investors will have to wait approximately two and a half years for initial results, as the FDA rejected a shorter trial route. Despite this, Bell Potter remains optimistic about Syntara’s long-term potential.
Micro-X Shows Progress in X-Ray Technology
Morgans noted that Micro-X, a leader in cold cathode x-ray technology, made solid operational progress in the March quarter. While customer receipts of $900,000 were below expectations, the company’s new portable x-ray unit, Rover, generated strong market interest and supported a growing sales pipeline.
Micro-X’s first stroke detection unit was installed at the Royal Melbourne Hospital, enabling a clinical imaging study involving 108 patients. Morgans believes the company is worth 15 cents per share, nearly three times its current value.
Artrya Prepares for Expansion in the US Market
Petra Capital analyst Tanu Jain expects an “action-packed” quarter for Artrya as its second and third US hospital customers begin using its AI-based heart disease detection devices. Known as Salix, these tools are designed to detect plaque buildup on coronary CT angiograph images.
Artrya received FDA clearance for Salix Coronary Anatomy in March 2025 and Salix Coronary Plaque in August. The company plans to submit a marketing application for a third tool to measure coronary blood flow. Petra Capital remains focused on commercial execution, with full integration complete at Tanner Health, Artrya’s first US customer.
Management Changes at Arovella
The boardroom of cell therapy developer Arovella Therapeutics has seen significant changes. Following the appointment of David Williams, Mark Diamond, and Dr Michael Thurn to the board, former CEO Dr Mike Perry and CEO Dr Michael Baker resigned. Directors Dr Andrew Nash and Dr Debora Barton also stepped down, leaving the new board to take charge.
Meanwhile, Avita Medical appointed Cary Vance as its permanent CEO, following his tenure as interim CEO since October.
