Transformational Shifts for Medical Devices Companies: Lens on RMD, FPH

  • May 03, 2020 AEST
  • Team Kalkine
Transformational Shifts for Medical Devices Companies: Lens on RMD, FPH

As coronavirus infection sweeps all over the globe, the healthcare industry is struggling to acclimate to this new world order. While technologies like machine learning, artificial intelligence (AI), and Internet of Things (IoT) have been there for upgrading healthcare, the ongoing turmoil has prompted more significant digital transformation in the healthcare industry. Consequently, the usage of medical technological devices has gone up significantly.

The COVID-19 outbreak has created immense pressure on the international availability of medical devices as well as ventilators, which are necessary to pump oxygen into the collapsing lungs of a patient severely infected by SARS-CoV-2, the coronavirus that causes COVID-19. As the demand for ventilators, masks and other medical equipment is higher than usual in severely affected COVID-19 regions, this has generated a great opportunity in the medical devices industry.

DO READ: How Pharma & Healthcare Sectors are Supporting Economic Activities Across the Globe

In Australia, the medical devices and diagnostics industry has founded niche products like continuous positive airway pressure devices for sleep apnoea, 3D customised titanium implants, transdermal insulin delivery devices, and diagnostic technologies for sleep disorders, neurophysiology and cardiology.

ALSO READ: A Look at Medical Device Stocks in Australia

In this article, we will acquaint you with two ASX-listed medical device players - RMD and FPH

ResMed Inc Revenue Climbed by 16 per cent

A medical device and software Company, ResMed Inc (ASX:RMD) is engaged in the development of high-quality medical devices for providing a superior and better-quality life to patients of chronic obstructive pulmonary disease (COPD), sleep apnoea and other chronic diseases. ResMed sells its diagnostic and treatment devices in several nations via its subsidiaries and independent suppliers.

On 30 April 2020, the Company announced its results for the third quarter (ended 31 March 2020). The quick highlights are-

  • The revenue climbed by 16 per cent to US$769.5 million and up by 17 per cent on a constant currency basis
  • The Company reported GAAP gross margin of 58.4 per cent with a non-GAAP gross margin expanded 70 bps to 60.0 per cent
  • The net operating profit of ResMed climbed by 39 per cent and non-GAAP operating profit up by 31 per cent.

On Revenue front-

Revenue in the United States, Canada, and Latin America, excluding Software as a Service, grew by 12 per cent which is driven by the robust sales across the mask and device product portfolios, including the enhanced need for the ventilators amid the COVID-19 pandemic.

Revenue in combined EU, Asia, as well other markets increased by 27 per cent (constant currency basis) mainly driven by sales of masks and ventilators.

Due to the consistent growth in the Brightree as well as MatrixCare service offerings, the software as a Service (SaaS) revenue of RMD climbed by 12 per cent.

The Company exited the quarter with the cash flow of US$239.7 million from operations, compared to the net income in the current quarter of US$163.1 million. During the period, the Company paid dividends worth US$56.4 million.

Business and operational highlights-

AirFit F30i- ResMed introduced AirFit F30i, which is the Company’s first tube-up CPAP (full face) mask. The tube-up design of this mask makes it simpler for users to sleep in any position and under nose cushioning of mask avoids soreness and irritation on the nasal bridge. The quick-release elbow of AirFit permits the users to disconnect it quickly, and users can reattach the mask from its tubing.

Partnership with ATS Foundation- In collaboration with ATS Foundation, ResMed gave the 3rd US$100,000 research grant to research on how remote monitoring can assist in enhancing the management of COPD patients. The study intends to identify initial changes in the functioning of the lungs from everyday recordings and inform patients when to initiate more rigorous treatment or obtain medical attention.

COVID-19 resource page- Addition to this, the Company also launched a COVID-19 resource page with links to the latest information from global and regional health organisations as well as frequently asked questions about the use of ResMed’s devices concerning COVID-19 and information for healthcare professionals.

Moreover, ResMed stated that the Company continues to implement the long-term strategy, assisting customers across the globe with its digital health technology solutions and management software (out-of-hospital), empowering healthcare professionals to continue to cater patients suffering from COPD, sleep apnea, asthma, and for patients in out-of-hospital care settings.

It is noteworthy that as the Company progresses through the global COVID-19 crisis, it is delivering world-leading solutions to health authorities, governments, physicians, hospitals, providers, and the most crucially to the patients.

By the end of the trading session, on 1 May 2020, the shares of RMD climbed by 3.248 per cent from its last close to $24.160. The market capitalisation of RMD stock was reported at $33.85 billion, with 52-weeks high and low price of $26.660 and $14.550, respectively. RMD stock has generated a positive return of nearly 10.22 per cent in the previous six months.

Fisher & Paykel Healthcare Corporation Limited to Experience increased Medical Device demand Amid COVID-19

A medical equipment manufacturer listed in both Australia and New Zealand, Fisher & Paykel Healthcare Corporation Limited (ASX:FPH) is engaged in providing products to cater the respiratory system and is engaged in the marketing, designing, and manufacturing of these systems and products. FPH develops an array of groundbreaking medical devices that aid clinicians for advancing patient care and improving the outcomes.

Fisher & Paykel Healthcare has witnessed an upsurge in its sales and share price because of the COVID-19 crisis. Amid coronavirus outbreak, there is an additional requirement for the respiratory humidifiers and masks of FPH, while the decline in the New Zealand dollar indicates that the Company is getting funded more for them from overseas customers.

Notably, the Company is likely to experience heightened demand due to the increasing requirement of masks and other medical devices amid COVID-19 pandemic.

Moreover, FPH informs the market that its complete results for the year ended 31 March 2020 would be published on 29 June 2020, which were earlier decided to be published on 28 May 2020.

READ MORE: Fisher & Paykel Healthcare: A Star in Respiratory Care Devices Market

By the end of the trading session, on 1 May 2020, FPH shares climbed by 4.901 per cent from its last close to $26.540. The market capitalisation of RMD stock was reported at $14.54 billion, with 52-weeks high and low price of $31.470 and $14.000, respectively. FPH has delivered a positive return of nearly 39.09 per cent in the previous six months.


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