ResMed (RMD +0.17%) finds itself in an investment limbo as revolutionary weight loss drugs create both immediate opportunities and long-term existential questions for the sleep apnea device maker.
The company, a leading manufacturer of CPAP machines used to treat sleep apnea, faces a nuanced challenge from GLP-1-based medications. The core issue: obesity drives the vast majority of obstructive sleep apnea cases, with 70-90% of sufferers experiencing the condition due to excess weight. As patients lose weight through GLP-1 treatments, their need for breathing assistance devices may disappear entirely.
This threat became more tangible when Eli Lilly's GLP-1 drug received independent approval to treat obstructive sleep apnea without requiring CPAP machines-a direct challenge to ResMed's business model.
Paradoxically, ResMed is currently benefiting from the GLP-1 boom. As patients visit doctors seeking weight loss treatments, they're also addressing obesity-related comorbidities, including sleep apnea, driving increased CPAP prescriptions in the short term.
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This complex dynamic has landed ResMed in what analysts call "the penalty box"-maintaining its position on stock recommendation lists while being placed on hold pending clarity on long-term impacts. The strategy: monitor whether GLP-1 drugs materially impact the business, then either restore full confidence or exit the position accordingly.
For investors, ResMed represents the broader challenge of evaluating companies whose core markets face potential disruption from breakthrough medical innovations.