Medical device maker ResMed will reveal on Friday whether its push to regain share in the sleep apnoea therapy market has boosted sales, but what investors are waiting for are details on new product releases.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Top-rated healthcare analyst Andrew Goodsall, from UBS, said the launch of a new flow generator machine could come in a matter of weeks, after ResMed applied to the US durable medical equipment regulator for eight new product codes. The codes all relate to a new "Airsense 10" flow generator platform, which is a product used by sleep apnoea sufferers that delivers a continual flow of air through a tube and mask to stop airway obstruction.
Mr Goodsall said he was yet to see evidence that ResMed had applied for approval from the US Food and Drug Administration for a new product. But assuming one is pending, he expects a launch in this first quarter of the financial year.
A new flow generator platform would be a game changer for ResMed's 2014-15 financial year, "given previous platform launches were associated with 16 to 43 per cent sales growth post launch", Mr Goodsall said.
ResMed last released a new flow generator in early 2010. On the back of a new platform, UBS estimates that ResMed will deliver sales growth of 15 per cent in 2014-15, weighted towards the second half and well above the analyst consensus prediction of sales growth of about 9 per cent.
Bloomberg analysts expect ResMed to report a 5 per cent rise in full year sales to $US1.58 billion ($1.7 billion) and a 15 per cent rise in net profit to $US307 million on Friday.
The company has struggled to grow amid a drive to cut healthcare costs in the US, where it derives 47 per cent of its revenue.
Deutsche Bank analyst David Low said the result may deliver a better-than-expected sales figure on the back of ResMed's push to regain US market share, although margins might be lower due to price cuts.
Regarding the launch of the flow generator, Mr Goodsall said ResMed may dodge the usual fall in margins because the company also launched a new set of masks in March, which traditionally have higher margins.
The close launch of mask and machine raises the possibility of integration between the two in an attempt to block other brands, he said. "This is clearly a distinct but previously elusive advantage," he said.
ResMed declined to comment. The stock has gained 7.3 per cent in the past year.
