Rank: #24 (Last year: #25) $4.68 Billion
Prior Fiscal: $4.22 Billion
Percentage Change: +10.9%
R&D Expenditure: $307M
Best FY24 Quarter: Q4 $1.22B
Latest Quarter: Q3 $1.29B
No. of Employees: 9,980
Global Headquarters: San Diego, Calif.

Just before the winter holidays in 2023, Resmed conducted a voluntary, global field action to update any of its masks containing magnets due to potential magnetic interference when the magnets are near some implants and devices in the body. Affected products included AirFit N10, AirFit F20, AirTouch F20, AirFit N20, AirTouch N20, AirFit F30, and AirFit F30i.

Contraindicated devices included active medical implants (pacemakers, ICDs, neurostimulators, CSF shunts, insulin/infusion pumps) and metallic implants/objects with ferromagnetic material (aneurysm clips/flow disruption devices, embolic coils, stents, valves, electrodes, implants to restore hearing or balance with implanted magnets, ocular implants, metallic splinters in the eye).

A month later, the FDA identified the issue as a Class I recall. The devices have magnets on the lower headgear straps and frame connections of CPAP masks. These magnets are there to make wearing the mask more comfortable.

Under certain circumstances when the magnet is less than two inches from certain implants and devices, interference can occur and disrupt their function or position. The existing label advises keeping magnets two inches away from affected devices but it doesn’t list all specific ones that could be affected, the FDA said.

The company recalled all CPAP masks with magnets to update the labels, as well as to add more warnings and information to guide safe usage. At the time, Resmed reported six injuries related to the issue, and no deaths.

The company’s Important Medical Device Advisory urged customers to keep the magnets six inches away from implants or devices that could be affected by magnetic interference, and reach out to their doctor or device manufacturer about potential negative effects of magnetic fields on their device.

Despite this, Resmed achieved double-digit percentage growth again in its fiscal year 2024 (ended June 30, 2024). The company’s sales jumped 10.9% to $4.68 billion, an increase of $376.2 million. Movements in international currencies against the U.S. dollar positively impacted revenues by about $15.2 million.

ANALYST INSIGHTS: “With a financial boost by Philips’ regulatory challenges, Resmed’s continues to focus on connected sleep therapy and digital health platforms to accelerate their growth. Key question is can Resmed become a key player in the “home monitoring” space for the future?”

—Dave Sheppard, Co-Founder and Managing Director, MedWorld Advisors

The company’s Sleep and Respiratory Care business pocketed $4.1 billion in fiscal year 2024, growing $239.2 million (10%) over the prior year. The revenue increase related with Resmed’s devices and masks was mainly attributed to higher demand and unit sales.

Devices captured $2.44 million of these sales, rising $173 million (8%). Masks and other posted the remaining $1.66 million, ascending 15% over the previous year.

February 2024 saw release of the AirCurve 11 series sleep apnea devices, which use two levels of support—inspiratory positive airway pressure (IPAP) and expiratory positive airway pressure (EPAP)—combined with digital technology. The bilevel PAP device provides higher pressure during inhalation and lower pressure during exhalation to more closely align with natural breathing patterns through a new AirCurve11 adaptive servo-ventilation (ASV) device.

The ASVAuto algorithm tracks 13 points on every breath cycle 50 times a second, using a minute ventilation target and respiratory rate to deliver therapy. The AirCurve 11 series features cellular communication and an integrated heated humidifier, as well. Over-the-Air updates deliver software and new digital features to the device, and the myAir patient engagement app tracks sleep and therapy progress with a daily sleep score.

The AirFit F40 full-face CPAP mask rolled out in March. The compact, full-face mask features the AdaptiSeal cushion, a soft silicone cushion designed to maintain a facial seal even when moving around during sleep. A flexible frame keeps the assembly away from eyes and ears and a quick-release short tube reduces tube drag and provides a convenient way to detach and reattach the mask to the device during the night.

AirFit F40’s headgear doesn’t have top strap adjustment, which the company said allows easier setup and adjustment. A new textile material and dark gray color offers a more modern look.

September witnessed launch of the AirTouch N30i tube-up nasal mask for CPAP. The mask features a fabric-wrapped frame—a Resmed first—with a soft, breathable, and moisture-wicking design. The new ComfiSoft cushion and fabric-wrapped frame incorporate a design with fabric coated over silicone to create comfort and maintain mask seal. Built on the company’s AirFit N30i mask, AirTouch N30i provides a customized fit using thousands of digital biomarkers.

The Software as a Service (SaaS) business accrued $584.1 million last year, growing $86.1 million (17%) over the previous year. The company highlighted its November 2022 acquisition of MEDIFOX DAN as the main driver of strong sales in this franchise. Excluding MEDIFOX DAN, the SaaS business increased 9%, driven by growth in the company’s HME vertical within the business.

Resmed released a collection of digital and personalized solutions to improve sleep health in September. The tools integrate with digital wearable devices and generative AI to provide a more personalized sleep experience.

New patient engagement features were added to the myAir app. A smartwatch app became available on Apple and Android devices that lets users monitor therapy data at a glance, and sleep staging data—awake, REM, core, and deep—from Apple Health and Health Connect were also integrated into myAir.

Personalized coaching provides customized tips and strategies based on behavior science and machine learning to help CPAP users stay on track with their therapy. Holistic trends offer data like tracked steps, energy burned, weight, blood oxygen, body mass index, daily exercise, heart rate variability, resting heart rate, time in bed, and total time asleep, from Apple Health and Health Connect along with CPAP therapy data.

Dawn, the company’s new AI-enabled health concierge, also debuted with this release. Dawn offers 24/7 access to answers about sleep health, Resmed products, and CPAP therapy support. Using generative AI, Dawn provides personalized guidance and connects users with the information they need in real time.

Rank: #25 (Last year: N/A)

$4.22 Billion
Prior Fiscal: $3.58 Billion
Percentage Change: +17.9%
R&D Expenditure: $288M
Best FY23 Quarter: Q4 $1.12B
Latest Quarter: Q3 $1.05B
No. of Employees: 10,140

In November 2022, ResMed took a leap closer to catching up with the ballooning CPAP demand created by the June 2021 recall of competitor Philips Respironics’ sleep therapy and ventilation devices.

The San Diego-based company opened a 270,000-square-foot advanced manufacturing center in Tuas, Singapore, that doubled its respiratory care presence in the area and serves as its Asia Pacific Manufacturing hub. The facility created over 1,000 new jobs and significantly grew ResMed’s production capacity of masks for its cloud-connected medical devices. It is also the primary production location for its AirSense 11 PAP (positive airway pressure) device, which lets users monitor their own sleep apnea treatment.

“Singapore’s strategic location and support for business investment, coupled with ResMed’s world-leading devices and digital health offerings, provides the perfect opportunity to expand our manufacturing capabilities while supporting local jobs and the region’s economy,” ResMed CEO Mick Farrell said in a press release announcing the new manufacturing center. “The opening of this facility supports the continued growth of ResMed’s product portfolio to meet the needs of millions of people across Singapore, Asia-Pacific, and the world.”

In November 2023, the company revealed president and COO Rob Douglas would be retiring on Jan. 1, 2024. He then transitioned to special advisor to the CEO and will remain in a consulting role through Dec. 21, 2024. President of sleep and respiratory Lucile Blaise immediately transitioned to senior VP of strategy and business development as a result.

ResMed also announced a new operating model that named Asia and Latin America president Justin Leong as chief product officer, Germany president Katrin Pucknat as chief marketing officer, and VP of North America sales Mike Fliss as chief revenue officer.

Fiscal year 2023 sales for the company’s Sleep and Respiratory Care business reached $3.72 billion, growing 17% over the prior year. Revenue from devices posted the largest increase, rising 22% to $2.28 billion. The company attributed the double-digit growth to increased demand, reduced competitive supply, increased average selling prices, and incremental sales of its C2C devices. Mask sales rose 11%, garnering revenue of $1.45 billion related mainly to an increase in unit sales.

August 2022 saw the company acquire mementor, a Leipzig, Germany-based firm that developed somnio digital insomnia therapy, for an undisclosed amount. Available as an “app on prescription,” somnio was Germany’s first permanently approved Digital Health Application (DiGA) in the sleep medicine field. It aims to fill the care gap and offer an alternative to prevailing drug therapy. Its clinical effectiveness was shown in two trials that showed sustained sleep improvement after two and 12 months.

mementor was integrated into ResMed in Germany as a separate business segment. ResMed said it will serve as a platform for further developments in the digital health field.

The acquisition of privately-held, U.S. based sleep and respiratory care diagnostics software company Somnoware took place in July 2023. Somnoware’s software is designed to streamline physicians’ and pulmonary function testing labs’ processes for diagnosing and evaluating sleep and respiratory care results, ordering PAP treatment equipment, setting up appointments, tracking PAP compliance, and electronically providing the information into the patient’s electronic health record.

ResMed said it intended to retain all Somnoware staff and maintain the open, device-agnostic nature of Somnoware’s offerings so users can continue to interoperate with various testing solutions, as well as place orders for treatment devices and accessories from any supplier.

The company’s Software-as-a-Service (SaaS) business posted proceeds of $498 million, ascending 24% over the previous year’s total. ResMed highlighted its acquisition of MEDIFOX DAN in November 2022 as the chief cause of this growth. Excluding the MEDIFOX DAN acquisition, SaaS sales rose 8%, driven by continued growth in the HME vertical within the business.

The €958.6 million ($997.5 million) acquisition of MEDIFOX DAN added software solutions for a variety of out-of-hospital care providers to ResMed’s SaaS business. The Hildesheim, Germany-based company’s software solutions include administrative, financial, and operational tools to provide care documentation, personnel planning, administration, and billing, similar to ResMed’s U.S. MatrixCare and Brightree brands.

The company also brought digital solutions for modern training and education management for professional care and family caregivers to ResMed’s portfolio. ResMed said that it intended to retain MEDIFOX DAN’s over 700 employees, as well as retain its existing locations and business processes.

“We’re excited to have closed this important expansion of our SaaS business, and to officially welcome MEDIFOX DAN to our ResMed SaaS team and global ResMed family,” said Farrell. “MEDIFOX DAN is a German leader in software innovation, united with the rest of ResMed in its mission to improve tens of millions of people’s lives through technology. Today, its strong offerings and dedicated staff expand ResMed’s out-of-hospital SaaS business into new health sectors, and to build on our strong ResMed healthcare business in Germany, the world’s second largest healthcare market in per capita spending.”

The company claimed victory in a patent dispute in December after the U.S. Patent Trial and Appeals Board invalidated claims New York University (NYU) alleged against the company based on seven of its patents.

In June 2021, NYU filed a patent infringement case alleging the company’s AutoSet and AutoRamp features of the AirSense 10 AutoSet flow generators infringed one or most claims of the seven NYU patents. ResMed then filed petitions with the PTAB saying all claims asserted against it were invalid. Rulings from Dec. 4-7 agreed with ResMed’s arguments, finding the challenged claims across the seven patents were invalid.

In the final weeks of 2023, ResMed announced it was conducting a voluntary global field action to update its guides for CPAP masks with magnets because of potential magnetic interference when the magnets are near certain implants and medical devices in the body. The field correction didn’t require patients to return a mask with magnets unless there was a contraindication for the following devices:

• • Active medical implants that interact with magnets— pacemakers, implantable cardioverter defibrillators (ICD), neurostimulators, cerebrospinal fluid (CSF) shunts, insulin/infusion pumps

• • Metallic implants or objects containing ferromagnetic material— aneurysm clips/flow disruption devices, embolic coils, stents, valves, electrodes, implants to restore hearing or balance with implanted magnets, ocular implants, metallic splinters in the eye

The company advised patients or anyone close to mask magnets to keep the magnets six inches away from implants and devices to avoid adverse impacts on those technologies.

$3.19 Billion
Prior Fiscal: $2.96 Billion
Percentage Change: +7.7%
R&D Expenditure: $225M
Best FY21 Quarter: Q4 $876M
Latest Quarter: Q3 $865M
No. of Employees: 7,970

Primasun—which translates to “first light”—is a new name in the study of untreated sleep apnea and the high-tech effort to identify and treat millions of Americans suffering from it. This joint venture between Alphabet subsidiary Verily and ResMed began in 2018.

The name evokes the image of the dawn that people should be so lucky to see after a full, restorative night of sleep—and the new light the venture aims to shine on a disease that affects about 54 million Americans, but remains over 80% undiagnosed, according to ResMed.

“We need a full night’s sleep right alongside a healthy diet and regular exercise for a strong immune system, the most energy, our best mood—in essence, to be our best selves,” Primasun CEO Jonathon Lobbins said in a press release announcing the new name last April. “Only when sleep apnea stops robbing sleep from millions of Americans can we truly know how healthy we can feel and be, as well as how safe and healthy our communities and our economy can be.”

A recent entry into the Top 30, digital health and sleep-tech firm ResMed accrued $3.19 billion in revenue in its previous fiscal year (ended June 30), growing the business 7.7%. Last fiscal year’s Sleep and Respiratory Care franchise revenue grew 8% to $2.82 million. The segment’s growth was driven by boosted device and mask unit sales that included recovery of ResMed’s core sleep patient flow previously impacted by COVID. Last year’s product recall of Philips’ sleep apnea and ventilator machines also worked in the company’s favor.

In fact, CEO Mick Farrell told investors during a first-quarter FY 2022 earnings call that Philips’ recall could result in as much as $350 million of sales of sleep apnea and ventilator devices over the next 12 months. But the exec also warned that unprecedented supply chain issues are hampering efforts to meet the demand for these products. Farrell said the recall was “tenfold higher than any in the industry to date” and meeting surging demand is simply not possible.

“We are facing the challenge of providing the volume for our own No. 1 market share position and also trying to meet as much of their No. 2 market share position as possible around the world,” Farrell said in the call. “Supply bottlenecks continue to restrict our access to critical electronic components, especially semiconductor chips, that ultimately limit our net production output.”

Device proceeds accounted for just over half of the business’s sales last fiscal year, expanding 7% to $1.61 billion. Growth was strongest in the U.S., Canada, and Latin America, each growing 9% year over year.

Mask sales in FY 2021 rose 11% over the prior year to reach $1.21 billion. ResMed’s combined Europe, Asia, and other markets region reigned supreme for that business, each raising sales 11%.

Last August saw the launch of the company’s AirSense 11 PAP (positive airway pressure) device for sleep apnea therapy. AirSense 11’s personal therapy assistant offers step-by-step tutorials on the myAir app to set up the device and acclimate to therapy pressure. Care check-in employs a questionnaire that clinicians can view with consent to guide patients through key treatment milestones.

AirSense 11’s auto-adjusting PAP delivers breath-by-breath therapy adjustments, tweaks for female-specific sleep apnea characteristics, and CPAP (continuous PAP). Remote software updates also make sure users are up to date on the latest versions of those tools.

The company acquired cloud-connected home sleep apnea test device maker Ectosense for an undisclosed sum in October. ResMed has been a minority investor in the company since July 2020 and has distributed Ectosense’s FDA-approved NightOwl device in Australia, New Zealand, and India since then as “ResMed onesleeptest.”

Software as a Service (SaaS) makes up the remainder of ResMed’s portfolio. This segment garnered $373.6 million last fiscal year, growing 5%. The company attributed the increase to continued resupply service offerings.

The company expanded its AirView for Ventilation cloud-based remote respiratory care patient monitoring and management platform in India last April. Already available in the U.S. and Europe, AirView for Ventilation lets clinicians monitor large numbers of patients remotely, safely, and efficiently.

ResMed’s earlier transaction for Citus Health closed last May. The digital health company specializes in patient engagement solutions that enable real-time, secure collaboration between patients and caregivers. The addition fuels ResMed’s out-of-hospital SaaS ecosystem that already includes strategic acquisitions Brightree, HEALTHCAREfirst, MatrixCare, Apacheta, and SnapWorx.

Finally, on Sept. 1 last year, Chief Technology Officer Bobby Ghoshal was promoted to president of the SaaS business. From February 2016 to April 2018, Ghoshal was COO for Brightree, the cloud-based SaaS for out-of hospital care provider acquired by ResMed.

$2.96 Billion
Prior Fiscal: $2.61 Billion
Percentage Change: +13%
No. of Employees: 7,770

ResMed wrapped up the first quarter of its 2020 fiscal (which ran July 2019 through June 2020) in celebratory style. CEO Mick Farrell rang The Opening Bell at the New York Stock Exchange to mark the firm’s listing on the Exchange for 20 years. The event also signaled the company’s 30th anniversary. Started as ResCare, a spinout from Baxter Healthcare in 1989, the organization has grown into a provider of cloud-connected medical devices for people with sleep apnea, COPD, and other chronic diseases.

“From a single A$1.25 million investment, ResMed has transformed into a A$28 billion (US$19 billion) connected health leader, changing over 100 million lives a year with either a cloud-connected medical device or through software support of an out-of-hospital care agency,” said Farrell. “I’m proud to be one of 7,500-plus ResMedians worldwide dedicated to improving the quality of so many lives, and one of countless investors who have long seen and supported the value of all that ResMed creates. And we are just getting started.”

Just getting started indeed. The company saw its best fiscal year to date in its 2020 cycle, gaining 13 percent over its 2019 fiscal. That was reflected in a jump from $2.61 billion to $2.96 billion in a year-over-year comparison.

Within the individual businesses, the Total Sleep and Respiratory Care unit gained 12 percent year over year. More specifically, within that segment, Devices experienced 11 percent growth to finish at $1.51 billion (versus $1.36 billion). Masks and other, in comparison, rose 13 percent to close out 2020’s fiscal at $1.09 billion compared to $969 million during 2019’s fiscal. The company attributed the gains to increased sales of its devices and masks, which included more ventilators sold as a result of COVID-19.

Like so many other ventilator producers, ResMed had pledged to increase the production of its systems to help answer the incredible demand for the device due to COVID-19. In the firm’s third quarter, it manufactured 52,000 non-invasive, invasive, and bi-level ventilators, which was about triple the number produced during the same quarter in 2019.

Its substantially smaller business—Software as a Service (SaaS)—exploded with 29 percent gains, rocketing from $276 million to $355 million. ResMed attributed the revenue gain to the acquisition of MatrixCare, which was finalized in November 2018, as well as the growth of its SaaS offerings.

ANALYST INSIGHTS: During COVID, ResMed has been quietly continuing its portfolio expansion to move from providing products to enabling patient solutions. With increased cash from the pandemic, it wouldn’t be surprising to see ResMed engage in new M&A activities to expand its market positions.

—Dave Sheppard, Co-Founder and Managing Director, MedWorld Advisors

While realizing the revenue gains due to COVID-19 would not last, the company kept its future in mind with a number of product developments that would help ensure any post-pandemic decline would not be substantial. One such announcement was the introduction of the AirFit N30, the world’s first tube-down nasal cradle CPAP mask with a front-facing tube. The company’s lightest mask at the time of launch, the AirFit N30 features an adjustable elastic headgear, plus a nasal cradle cushion that sits under the nasal bridge, eliminating soreness in that area. The mask’s curved cushion is designed to provide a secure seal regardless of how the wearer sleeps or moves.

Continuing to improve its mask offerings, ResMed also launched its AirFit F30i—its first tube-up full face CPAP mask—during the 2020 fiscal. The AirFit F30i’s tube-up design makes it easier to sleep in any position. The cushion rests under the nose to help prevent next-day red marks, soreness, and irritation on the nasal bridge. In addition, a quick-release elbow allows users to quickly disconnect and reattach the mask from its tubing at night without taking the mask off.

To help patients make the most appropriate selection among its library of ever-growing mask options (even in a pandemic), the company debuted MaskSelector—a digital tool for remote CPAP mask fittings. The tool creates personalized ResMed mask recommendations based on a patient’s sleep attributes and facial measurements. A home medical equipment provider can supply a HIPAA-compliant single-use link via text or email to a patient, who then answers a brief questionnaire and enters three facial measurements into the ResMed MaskSelector portal. Based on the patient’s responses, the tool will recommend one of the company’s masks, along with options for alternate ResMed mask models and sizes.

Not a product per se, but ResMed launched a solution for COPD patients and physicians. The online resource—resmed.com/COPD—explains what COPD (chronic obstructive pulmonary disease) is, tips for patients living with it, latest research, and leading treatments, including non-invasive ventilation and oxygen therapy. Patients and healthcare providers are also able to sign up for alerts when new research or treatment options come out.

To support clinicians during the pandemic working with ResMed ventilators, the organization launched its secure AirView platform. The cloud-based remote monitoring software helps clinicians across Europe remotely monitor and advise ventilator and bi-level device patients faster, and serve them more safely by reducing in-person visits. With AirView, clinicians and care providers can remotely monitor a patient’s respiratory rate and SpO2, or blood oxygen saturation, two key indicators that should be monitored to track changes in a respiratory patient’s condition.

In less fortunate news, ResMed settled probes and lawsuits that began in 2016 due to the alleged payout of kickbacks in exchange for referrals of its medical devices. The company agreed to pay $37.5 million to resolve the federal claims. The legal issues began due to whistleblower complaints.