ResMed slumps on Lilly's sleep apnea trial for weight-loss drug

Inspire Medical Systems

24/06/2024 11:40

(Updates)
    ** Shares of respiratory device maker ResMed  RMD.N  fall
nearly 12% to $180.98 in premarket trading
    ** Drug maker Eli Lilly  LLY.N  on Friday said its popular
weight-loss drug Zepbound helped resolve moderate to severe
obstructive sleep apnea (OSA) in up to 52% of patients in two
late-stage trials
    ** ResMed makes ventilators and machines used for
non-invasive treatment of sleep apnea, a condition in which
airway is blocked multiple times while sleeping
    ** Citi downgrades RMD's rating to "neutral" from "buy",
says data shows GLP-1s like Zepbound are a viable treatment
option for nearly 70% of OSA patients who are obese
        ** If half of these patients see disease remission, the
total addressable market for continuous positive airway pressure
(CPAP) machines could decline by ~35% - Citi 
    ** Lilly said it had submitted its application to the U.S.
FDA to have Zepbound approved as a treatment for obstructive
sleep apnea and would submit to other regulatory agencies
globally in the coming weeks
        ** Evercore analysts say since data shows that Zepbound
had additional benefits of weight loss and blood pressure
reduction, it will be high bar for doctors to forego drugs and
recommend a neurostimulator - such as Inspire Medical's  INSP.N 
device - as a first line treatment 
    ** Year to date, RMD up ~20%, while INSP down ~20% compared
to a ~7% rise in the Dow Jones U.S. Health Care Index  .DJUSHC  

 (Reporting by Medha Singh and Bhanvi Satija in Bengaluru)
 ((medha.singh@thomsonreuters.com))