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