Australian Investment Blog

Yesterday, Resmed (RMD) shares fell 18.4% after some damning evidence that one of its devices increased the chance of death for patients on trial – chart 1. RMD were trying to see if its adaptive servo-ventilation (ASV) therapy, could aid people with chronic heart failure and sleep apnea. However, the study found that the therapy increased the risk of mortality by 2.5%. The short term hit to revenue is relatively small, but it does set back, at best, a promising growth option as RMD were looking to play a role in the treatment of heart failure which costs the US government ~$US35bn annually.

• RMD’s group sales from these ASV flow generators is under 7% of total revenue over 12 months from March suggesting an 18% sell off is excessive.