Shares in ResMed Inc. (NYSE: RMD, ASX: RMD) reached a three-year high yesterday as the stock continued to recover from a sell-off attributed to concern about the impact of anti-obesity drugs on demand for ResMed’s sleep apnea products.
The share price of the U.S.-based medical device maker finished ASX trading at A$39.07 cents, up A$1.34 on the previous close, and just off the day’s high of $39.13.
This is the highest level the shares have reached since September 2021, when the price slide began, and makes it one of the 15 largest companies listed on the Australian bourse.
This performance continued a recovery from a low of around A$21 in September 2023, when sentiment started to improve for the company, which was founded in Australia in 1989 and moved its headquarters to San Diego, California in 1994.
It was helped by ResMed’s first quarter financial results for the three months ended 30 September 2024 issued last week, which showed revenue increased by a higher-than-expected 11% and income from operations surged 34% compared with the same quarter in 2023.
The sell-off over the last three years had been blamed on investor concerns about the effect of a class of anti-obesity drugs headed by Ozempic, which is manufactured and marketed by Danish pharmaceutical company Novo Nordisk.
Ozempic is one of the brand names for emaglutide, an antidiabetic medication used for the treatment of type 2 diabetes and an anti-obesity medication used for long-term weight management.
ResMed sells products including positive airway pressure (CPAP) devices and masks to treat people with sleep apnea, a disorder in which breathing stops and starts.
ResMed has estimated that around one billion people, many of whom are overweight, suffer from this potentially dangerous disorder, but that it has reached only about 3% of the addressable market with its products so far.
Other reasons cited for the fall in the company’s market value were the increasing availability of sleep apnea drugs.
At 04:00 pm (AEDT) on 28 October 2024, ResMed (ASX: RMD, NYSE: RMD) stock was trading at A$39.07, up 3.55% from the previous close of A$37.73. ResMed's market capitalisation stands at A$55.3 billion.