ResMed: Positive CAT-HF Study Results To Drive ASV Sales

Primary results from ResMed Inc.’s (NYSE:RMD) CAT-HF trial showcased the significance of adaptive servo-ventilation (ASV) therapy in the treatment of heart failure (HF). Data were presented at the European Society of Cardiology's 2016 Annual Heart Failure Congress.

ASV therapy is primarily administered to patients suffering from obstructive sleep apnea (OSA), otherwise known as sleep disordered breathing (SDB). And quite interesting fact for ResMed (which is a pioneer in the SDB market), as per estimates of the American Thoracic Society, approximately 2 out of every 3 HF patients are likely to suffer from some level of SDB.

The CAT-HF study data demonstrated the efficacy of ASV therapy in improving OSA patient outcome, particularly for those who have suffered from a sudden HF over the past six months. To be more specific, a statistically significant improvement was observed in HF patients with preserved ejection fraction, who were treated with ASV for their OSA.

Notably, chronic HF is a common medical condition, with approximately half of the patient population suffering from HF with preserved ejection fraction. On the other hand, OSA is a common disorder which affects roughly 10% of the U.S. population and approximately 1/3 of people with chronic heart failure. Naturally, this shows a strong degree of association between OSA and HF with preserved ejection fraction.

In recent years, on account of a rise in tobacco intake as well as rising pollution with escalating CO2 emissions, escalating demand for technological advancement in respiratory care devices has been observed. Along with this, increasing number of HF incidences was witnessed across the globe in the past decade.

With the recent growth in the ageing population, particularly in developed nations, more people are expected to suffer from HF as well as OSA, thereby expanding the patient pool for these diseases.

Currently, the global respiratory care market is expected to rise 10.9% by 2021. The developments in this field as well as the positive CAT-HF study results encourage us to expect a rise in demand for the wide range of products offered by ResMed.

Moreover, last year results from another study – SERVE-HF – showed that ASV therapy should not be used on patients with predominant central sleep apnea and symptomatic chronic heart failure with reduced ejection fraction. This in turn had a significantly adverse effect on sales of ResMed’s ASV therapy inducing products.

We believe the recently announced favorable results from the CAT-HF trial will help the company recover sales that it lost last year, thereby boosting its top line in the quarters ahead.

The company currently carries a Zacks Rank #3 (Hold). Better-ranked medical stocks are SurModics, Inc. (NASDAQ:SRDX) , Baxter International Inc. (NYSE:BAX) and Boston Scientific Corporation (NYSE:BSX) . While SurModics and Baxter sport a Zacks Rank #1 (Strong Buy), Boston Scientific carries a Zacks Rank #2 (Buy).