ResMed Inc. RMD, a global manufacturer of medical devices, recently formed a joint venture with renowned surgeon and television host Dr. Mehmet Oz and private equity firm Pegasus Capital Advisors, L.P. The alliance resulted in the formation of SleepScore Labs, which is mainly focused on spreading awareness regarding the ‘epidemic of sleeplessness’.
For the greater part of the last six months, ResMed has outshined the Zacks categorized Medical-Products industry with respect to price performance. The company lost 3.3%, much narrower than 8.9% loss of the broader market. In spite of a dismal performance in the last reported quarter, the company managed to maintain the trend on solid fundamentals and prospects. The company has recorded a 5-year CAGR revenue of 7.8% and earnings per share BNRI of 14.8%. ResMed is slated to release its second-quarter 2017 results on Jan 23.
ResMed continues to see surging demand for its products for the treatment of sleep-disordered breathing (SDB). The latest partnership combines the company’s long years of leadership, R&D investments in consumer and medical devices and technologies for sleep monitoring with Dr. Oz's consumer health and wellness audience.
Dr. Oz, who is an advocate of the importance of sleep in health and wellness, was appreciative of ResMed's popular S+ device – which is a sleep monitoring technology for consumers. S+ is the world's first non-contact sleep tracker and smart phone app. It consists of bio-motion sensors to gauge an individual's sleep quality and bedroom environment, delivering personalized feedback to help people track and improve their sleep.
Initially, SleepScore Labs will aim to accumulate and analyze comprehensive and accurate global consumer sleep data, starting with its landmark national sleep study on SleepScore.com. The venture will also license SleepScore by ResMed technology for other consumer sleep devices and upgrade tracking capabilities and improve product lines. SleepScore Labs has already signed R&D contracts with several global leaders, including LED powerhouse Lighting Science Group.
As per management, the new company can become a pivotal player in the consumer sleep market, which is estimated to reach a worth of $80.8 billion by 2020. The present market for SDB is huge and underpenetrated across the globe. Thus, ResMed is leaving no stone unturned to expand in this market.
ResMed states that SDB affects 34% of men and 17% of women aged between 30 and 70. In the U.S. alone, more than 70 million citizens suffer from sleeping disorders. Several evidences of hypertension, cardiac diseases, obesity and diabetes are linked with such sleep-related complications.
In this regard we note that, this is not the first time ResMed has collaborated with Dr. Oz on SDB products. Earlier, the company had joined hands with the latter to launch a National Sleep Survey campaign to foster better public understanding of sleep health.
This apart, the company, through the latest collaboration with Dr. Oz, commits to raise awareness with its new phase of sleep research and improve the health of millions as well as business efficiency for healthcare providers.
Zacks Rank & Key Picks
ResMed carries a Zacks Rank #4 (Sell). Better-ranked medical stocks are ICU Medical Inc. ICUI, Align Technology, Inc. ALGN and NanoString Technologies, Inc. NSTG. ICU Medical sports a Zacks Rank #1 (Strong Buy) while NanoString Technologies and Align Technology carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ICU Medical gained 27.1% over the last one year compared to the S&P 500’s 18.5%. The company has an impressive long-term earnings growth of 20.5% compared to the industry average for the next five years.
NanoString Technologies surged 90.1% over the past one year, better than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 6.9%.
Align Technology rallied 45.7% in the past one year, way better than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 23%.
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