Sleep Disorders: A Look at Two ASX Stocks Providing OSA Treatment Solutions

Sleep Disorders: A Look at Two ASX Stocks Providing OSA Treatment Solutions

Summary

  • Majority of patients remain undiagnosed of sleep related disorders, highlighting huge opportunity for diagnostic and treatment solutions.
  • Key factors fostering the emerging sleep device/treatment market are growing obese population, changing lifestyles and work-related distress.
  • COVID-19 is attacking mental health, with stress, fear, and anxiety on upsurge.
  • Several stocks like SomnoMed and Oventus Medical are offering solutions and devices designed for the treatment of sleep-related disorders to meet the growing needs.   

COVID-19 pandemic has affected every aspect of life, bringing along several challenges including sleep problems and mental health issues.

Sleep apnoea device/treatment market is considered as an emerging segment and is being driven by various factors such as increasing obese population, changing lifestyles, distressing work issues, rising occurrence of sleep disorders, and increasing intake of alcohol and caffeine.

Around the world, millions of people suffer a terrible sleep due to numerous medical issues like sleep apnoea. Treatments for this condition include breathing devices such as Continuous Positive Airway Pressure (CPAP) to keep the airway open during sleep and surgery that reduces the amount. Medicinal treatment as well as devices collectively have a role in managing sleep disorders effectively and with a better clinical outcome.

In this article, we are discussing two ASX-listed stocks providing treatment solutions for sleep disorders- SOM and OVN.

April and May Group Volumes Better Than Expected for SomnoMed

ASX-listed healthcare sector player, SomnoMed Limited (ASX:SOM) provides diagnostic as well as treatment solutions for sleep-related breathing disorders including snoring, obstructive sleep apnea (OSA) and bruxism. The Company is a global leader in offering Continuous Open Airway Therapy (COAT). 

On 2 June 2020, SomnoMed announced that for the previous two months, trading has been better than anticipated and forecast at the time of the recent Entitlement Offer.

Group volumes for combined months of April and May went down by 61% as compared to the previous year, including in May, down by 50% and in April, down by 73%. No updated guidance for the current financial year was provided at the time the Company’s guidance was revoked in March. The group volumes registered for that April and May period have been better than the internal expectations of SomnoMed at the time of the Entitlement Offer. 

The Company had a net cash balance of $23 million at 31 May 2020, including proceeds of the Entitlement Offer of $15.5 million and financial assistance provided by several governments due to COVID-19 in a variety of forms.

North America- The business in North America has demonstrated indications of a slow recovery, with many states now open for business and dental practices cautiously opening up again and receiving patients.

Europe- The European business has witnessed some reasonable volumes growth, with economies recovering at different rates depending on the relaxation of lockdown restrictions. With encouraging demand from Holland, Germany, France and Sweden, volumes have returned fairly quickly.

Asia-Pacific- APAC has undergone some improved volumes more recently and, within Australia, a gradual opening up of dental practices has been observed, as previous trade restrictions become more relaxed.

SomnoMed Reported Satisfactory Third Quarter Despite COVID-19 Impact

In late-April 2020, SomnoMed updated about its performance for Q3, highlighting that core revenues increased by 9% year-on-year to $15.6 million for the three-month period to March 2020. Both Europe and North America generated revenue growth, with North America recording growth of 20% (10% in constant currency).

Its performance during the quarter demonstrated two distinct parts. The Company generated exceptional revenue growth for January and February months with both growing 17% as compared to the prior corresponding period (pcp). However, in March, SomnoMed observed a totally distinct picture. March revenues finished on 11% behind last year due to the drop in orders received early on in the month amid COVID-19.

Meanwhile, the Company applied for several government subsidies and grants across the globe to support the business and its employees during tough times.

Stock Information - On 3 June 2020, SOM stock closed the day’s trade at $1.525, down by 1.613%. The market cap of the company was noted at $127.39 million with nearly 82.19 million outstanding shares on ASX. The last one-month return of the stock was noted at 44.86%.

DID YOU READ: Prescription of Mental Health Medications Surges Amid COVID-19

Oventus Medical Expands Lab in Lab Commercial Model to 51 Locations

Brisbane-based medical device company, Oventus Medical Ltd (ASX:OVN) is into the commercialisation of a distinctive treatment platform for sleep apnoea and snoring. The company has a collaborative Sleep Physician/ Dental strategy for streamlining access to treatment by patients. Oventus O2Vent devices manage the complete upper airway through a distinctive and patented built-in airway.

On 25 May 2020, Oventus Medical updated that Aeroflow Healthcare Inc., a fast-growing US Durable Medical Equipment provider, has executed its first Oventus Lab in Lab subcontract with US-based Regional Health Diagnostics, a neurological testing and sleep disorders centre operating 12 sleep lab locations across Tennessee, Georgia, Alabama, North Carolina and South Carolina.

Under the first subcontract, Regional Health Diagnostics will provide the Lab in Lab business model at two of its locations, initially. Scope exists to expand the agreement once the first two sites are operational.

Contract with Careica Health for Provision of Oventus Sleep Treatment Platform 

During mid-May 2020, Oventus announced to have signed an agreement with Careica Health for provision of Oventus Sleep Treatment Platform. As part of this agreement, patients will be referred from twenty-six homecare locations of Careica, covering the provinces of Alberta Saskatchewan, British Columbia and Manitoba to four-sites, which will run the lab-in-lab business model, initially.

With this agreement, the well-known SLEEP program of Careica has been extended and now includes O2Vent oral appliance therapy as an alternative for CPAP-intolerant people. After being completely implemented, each location anticipates making a minimum order of 20 O2Vent Optima devices, on a monthly basis. The agreement has a three-year term, with an automatic three-year renewal, unless any party elects not to renew the agreement no later than 180 days prior to the end of the term.  

Notably, with these new agreements, the total number of sites contracted under Oventus’ Lab-in-Lab model are now 51.

Stock Information - On 3 June 2020, OVN stock settled at $0.310 and the company had a market cap of $46.36 million with approximately 149.54 million shares outstanding. The last one-month return of the stock was noted at 19.23%.  

 


Disclaimer
The website https://kalkinemedia.com/au is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) or engage in any investment activity under discussion. We are neither licensed nor qualified to provide investment advice through this platform.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK