ResMed Debuts in Japan - Analyst Blog

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Following an impressive third quarter of fiscal 2012, ResMed Inc. ( RMD ) is leaving no stone unturned to expand its operations further. The company launched its first product in Japan named Omron Sleep Design HSL-101, a wireless sleep monitoring device.

This product was launched by ResMed's recently acquired company BiancaMed Ltd.'s partner Omron Healthcare and was developed using BiancaMed technology. The new device forms a part of the "All for Healthcare" strategy of Ormon, which seeks to connect to health care support services in Japan by offering wireless and non-contact sleep monitoring.

Considering the huge and underpenetrated international Home Sleep Testing market, ResMed is emphasizing on strategic initiatives to penetrate further in the international arena. While Japan already accounts for half of the Asia-Pacific sales, we believe that ResMed's new product launch in the region will enhance its presence going forward.  Also, the company considers Germany and UK to emerge as its key markets and expects future growth from its restructuring efforts in these countries.

As a part of its global expansion strategy, earlier in 2011, ResMed acquired Irish medical technology company BiancaMed. BiancaMed primarily manufactures and distributes non-contact devices for monitoring sleep and breathing. The company's leading product SleepMinder measures sleep and respiration with improved biometric software. The company's proprietary technology motion sensor detects respiration and movement without physical contact.

Again in the same year, ResMed acquired Germany-based Grundler Medical GmbH. Grundler develops innovative medical humidification products that fit a wide range of ventilators from neonatal and pediatric to non-invasive pressure support and the ones used in intensive care unit. The company expects this deal to generate incremental revenue as it steps into a new market segment.

The company also entered into a 5-year exclusive distribution agreement with CareFusion ( CFN ), thus providing the latter with the exclusive right to distribute the Stellar 100 and 150 non-invasive ventilators and their related accessories in the institutional healthcare market.

Based on a favorable product mix and growing demand in the sleep-disorder breathing market, ResMed reported 18% year-over-year increase in revenues in Americas while outside Americas, revenues increased 4% (up 7% at Constant Exchange Rate) in the third quarter of fiscal 2012. Even amidst the challenging macroeconomic scenario in Europe with disappointing performance in France due to a 6% reimbursement cut, the increase in international revenues is encouraging. 

ResMed is one of the leading players in the generators, masks, and related accessories market that are used for the treatment of obstructive sleep apnea and related respiratory disorders. The company is focused on medical equipment for the diagnosis and treatment of sleep-disordered breathing. Besides, the industry is benefiting from an aging population and an inclination toward availing medical care away from hospitals. The company currently retains a Zacks #1 Rank, which translates into a short-term Strong Buy rating. Also, we have a long-term 'Outperform' recommendation on the stock.


 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: CFN , RMD

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