ResMed (NYSE: RMD): Pioneering Innovative Sleep Disorder Solutions

ResMed (NYSE: RMD): Pioneering Innovative Sleep Disorder Solutions

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Respiratory companies have been struggling with a major challenge for many years. Continuous positive airway pressure has been shown in numerous studies to be effective in improving sleep apnea and preventing a host of co-morbidities such as obesity, congestive heart failure and chronic obstructive pulmonary disease. But the buy-in from patients is notoriously lacking.

Designers and developers have made both iterative and innovative improvements, without demonstrably moving the needle on changing patient behavior. For the most part, compliance rates hover around 50 percent. Creating a difference is ResMed (NYSE: RMD). The company has taken on the challenge of helping users become more compliant, the ecosystem more cost-effective and customers more loyal through a model of connected health.

San Diego–based ResMed’s quest to improve patient compliance began over a decade ago, explained the CEO of the company, Mick Farrell. “We started our first digital health experiments with UC San Diego in 2002 and learned a lot over a decade.” That work lead to a reinvention of the company in 2012, with 100% cloud-connected medical devices across all of its sleep apnea therapy platforms. Since then, the company has made impressive strides. That success changed the thinking around connected medical devices, blazing the trail for other medical device makers to follow.

The Force Behind the Innovations

The major force behind ResMed’s success has been Farrell who has called out two key acquisitions that helped ResMed make the transition: Umbian, a digital health provider for sleep apnea management, in 2012; and Brightree, a provider of software-as-a-service for out-of-hospital care management, in 2016. Their combined technology led to ResMed’s release of the “world’s largest remote patient monitoring network, AirView,” said Farrell.

But the history of ResMed goes beyond that. In 1981 Professor Colin Sullivan and colleagues at the University of Sydney described and developed nasal continuous positive airway pressure (CPAP), the first successful non-invasive treatment for obstructive sleep apnoea (OSA). After publishing the successful results in Lancet, Sullivan, who had patented the technology, sought a compatible partner to help commercialise this life-changing technology. In 1986 he approached Chris Lynch, Managing Director of the Baxter Centre for Medical Research and Vice President of R&D for Baxter Healthcare, who in turn reached out to his Baxter co-worker Dr. Peter Farrell.

In 1987 Farrell, on behalf of Baxter, invested in Sullivan’s technology to further evolve the CPAP prototype and undertake clinical trials on a group of patients with severe sleep apnoea. In 1989, after Baxter decided not to enter the sleep apnoea market for a variety of reasons, Farrell founded ResMed (short for “Respiratory Medicine”) to buy Sullivan’s sleep technology from Baxter and to commercialise his prototype CPAP device to allow scalable device production – in other words, to bring CPAP to the world at large.

Way Ahead of their Time

Since then, ResMed has delivered on Farrell’s promise: making CPAP masks, CPAP machines and in-home life support ventilators more comfortable, quieter and easier to use. It has also become the world leader in remote and self-monitoring software, with more than three million patients worldwide remotely monitored by clinicians. The software is shown to increase patients’ therapy adherence rates and clinicians’ business efficiencies.

AirView captures nightly sleep data from more than four million sleep apnea and COPD patients via the cloud. Their combined technology led to ResMed’s release of the “world’s largest remote patient monitoring network, AirView,” said Farrell. AirView captures nightly sleep data from more than 4 million sleep apnea and COPD patients via the cloud. Umbian’s U-Sleep features have helped improve the AirView offering by introducing “AirView Action Groups,” in which patients are automatically grouped by therapy issue via smart algorithms, enabling clinicians to efficiently manage patients “by exception.”

We started our first digital health experiments with UC San Diego in 2002 and learned a lot over a decade

Brightree helps customers improve both the clinical and business performances of sleep disorder devices. “Leveraging deep neural networks and sophisticated virtuous feedback loops of learning to discern actionable insights is the key to success,” he explained. The AirView platform captures 1.5 billion nights of medical sleep and respiratory care data, enabling analysis of large patient populations to glean insights that influence standards of care and patient outcomes.

At the Forefront of Easy User Adoption

Although data collection alone would make ResMed a stand-out organization, there are tricky issues at play when it comes to gaining access to that data. That’s where user-focused design comes into play. Every Air Solutions device is cloud-connected out of the box. Data from the cloud can be seen the next morning by the patient or (with the patient’s permission) a doctor, enabling the monitoring and support of patients without an office visit. And it appears to work. A November 2017 study of 128,000 patients published in the journal CHEST showed that sleep apnea therapy users whose nightly use was remotely and self-monitored via ResMed’s AirView and myAir platforms, respectively, were more than 87 percent adherent on therapy.

The decisions ResMed made on how to best collect, store and share data with patients and caregivers led to better outcomes. And patients get immediate feedback from their device, including prompts to order new supplies or replace parts and assessments of sleep improvement. All that helps build loyalty. The third leg is cost, and that’s where ResMed solves one of the stickiest issues in the medtech space: Reimbursement. Although every payer is different, all want proof of compliance. For example, Medicare requires that a patient use CPAP for more than four hours per night on 70% of nights during a 30-day consecutive period during the first three months of use. Farrell said myAir and AirView improved that number to 87 percent.

Towards a Orderly Future

ResMed has plans to expand its connected health solutions worldwide, leveraging data for actionable insights and, according to Farrell, “exploring ways where all this smart data can take us next”—particularly when it comes to using artificial intelligence models through machine learning and predictive models. And the CEO has his eye on therapeutic areas beyond sleep apnea and COPD; he’s asked his team to consider possible applications in cardiovascular disease, Type II diabetes and other severe chronic diseases.

Nick Vassilakis, founder & CEO of remote patient monitoring company Astute, noted that integration of sensors and data into a unified platform, “to get a more holistic view of a patient’s overall wellness,” is a significant challenge. Farrell understands that realizing his vision will require an entire ecosystem, with the pharma, medtech and software industries combining to “bend the rising healthcare cost curve together.”

“Everyone wants healthcare data streamlined and in one spot, and that’s what we are doing as a company,” he said, and he sees ResMed playing a role by giving patients a single app for sleep, exercise and nutrition.

“We see big tech companies like Apple creating consumer facing health applications and Google/Verily looking to create an ecosystem. Most recently we have seen Amazon talking about getting into the delivery space,” he explained. ResMed’s Air10 sleep apnea devices and Astral and Stellar in-home ventilators can already connect to the devices’ built-in cloud connection, he added, noting that the company plans next to connect its portable oxygen concentrators to the cloud. And although Farrell wasn’t willing to discuss his plans beyond that, it’s clear that ResMed plans to continue to lead the connected space.

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Top 10 Sleep Disorder Care Solution Companies - 2019

ResMed (NYSE: RMD)

San Diego, CA

Mick Farrell, CEO, ResMed (NYSE: RMD)

ResMed has pioneered innovative sleep disorder solutions that treat and keep people out of the hospital, empowering them to live healthier, higher-quality lives. The company’s cloud-connected medical devices transform care for people with sleep apnea, COPD and other chronic diseases. The company’s comprehensive out-of-hospital software platforms support the professionals and caregivers who help people stay healthy in the home or care setting of their choice. By enabling better care, the company improves quality of life, reduce the impact of chronic disease and lower costs for consumers and healthcare systems in more than 120 countries