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If you turned 70 ½ last year, make sure you take your required minimum distribution.
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It was another great quarter for the medical device maker.
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Better-than-expected quarterly results send shares to a fresh all-time high.
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RMD earnings call for the period ending December 31, 2017.


’’’ResMed’’’ (NYSE:RMD) serves the sleep disorder breathing (SDB) market by providing devices and diagnostics. Though the company maintains that there have been 3,500 peer-reviewed clinical studies on SDB, they still estimate that the US market is only 10% penetrated. Further the US market is the most penetrated market in the world. The company estimates that the sleep therapy market is $2 billion in size and can grow to be 10 times greater.

Obstructive Sleep Apnea

Obstructive sleep apnea is frequently seen among physicians. It occurs when the air pressure inside the body differs from outside the body. The soft pallet closes and the person does not get air. Physiologically, the sleeping person responds briefly as if they were being choked. Adrenaline shoots through the body and the person jerks (myoclonic jerk) just enough to create air flow. A person with chronic severe obstructive sleep apnea may simulate being choked dozens of times per night. This is not conducive to good health.

People are always somewhere on a sliding scale between 'fight or flight' and 'rest and digest'. Fight or flight is associated with adrenaline and rest and digest is associated with serotonin. When adrenaline shoots through the body the person is somewhat in two hyper states, and that can really get the body out of whack- especially if it occurs several times a night. Adrenaline mobilizes sugar and encourages the pancreas to produce insulin, which takes sugar to the big muscles needed to fight or sprint away from a fight. Currently under investigation are the effects of repeated shocks to insulin production. Some suggest that it can actually cause diabetes frequently concurrent withObesity. 80% of type two diabetics have a form of SBD. Clinical data show CPAP therapy improves blood pressure, glucose control, and insulin sensitivity.

Complex Sleep Apnea

In the Fall of 2006, the Mayo clinic published a peer-reviewed study suggesting that 15% of the patients coming through their sleep center suffered from complex sleep apnea. Further it was stated that RMDs product, VPAP Adapt SV, was far superior to the current standard of care.

RMD Devices and Screening

RMD makes a CPAP for continuous positive air pressure. This allows the air pressure inside and outside the body to be similar. There is a generator which maintains pressure, and a mask which fits over the nose and mouth. People who breathe through their noses do not need the full face mask, and RMD has a nasal only product for them.

Product developments and improvements have gone to reduce the noise made by the generator and make it lighter. The masks have also been improved to be more comfortable, better fitting, and more reliable.

The most basic functions of CPAP and other devices can be created relatively easily and there are a number of low end price competitors. RMD had not competed with them in the past, but introduced the C-Series Tango to compete in that segment.

ApneaLink screens and offers diagnosis of some SDB. It works at home where the person uses something similar to an nasal oxygen tube to collect information about the breathing and pressure patterns throughout the night. The person turns it on before going to sleep and turns it off in the morning. The data can be sent for analysis via a USB SanDisk (SNDK) through the internet.

Other Treatment and Screening

There is a surgical procedure which removes tissue in the soft pallet. The patient is awake and can hear the sounds of the cutting devices which usually create a bad smelling smoke.

Sleep centers collect information as people sleep in the laboratory. Sometime electrodes are placed on the patients head.

Recent Developments

RMD performed a voluntary recall of some 300,000 units of the S8 generator. The company was only aware of 7 generators of the 300,000 that had defects causing it to put out excess heat. The company defended its brand name costing $60 million for the recall.

Most major cardiac associations advocate SBD screening.

The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) recommends pre-operative screening. The Joint Commission likens it to the time as pulse-ox machines went from relatively unknown to a standard of care.


Respironics (RESP) which serves other ventilation markets as well.


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