ResMed boss Mick Farrell expects the global rollout of COVID-19 vaccines to be gradual, paving the way for a recovery in healthcare outside pandemic management. His company remains confident it can take advantage of the rising tide of digital health in the coming months.
The medical device maker managed to post a 12 per cent profit jump despite seeing a slowdown in demand from hospitals for its ventilator products.
ResMed told shareholders on Friday morning revenues for the December quarter were up 7 per cent at $US800 million ($1.04 billion) on a constant currency basis. Net income increased 12 per cent to $US179.5 million, with chief executive Mick Farrell saying the numbers showed a “slow, steady, U shaped” recovery in demand for the company’s core sleep apnea products.
Mr Farrell told The Sydney Morning Herald and The Age he was optimistic the big pharma giants would be able to successfully distribute vaccines globally, but it would be a lengthy process.
“As vaccinations roll out and countries start to open up again, we expect healthcare to recover. But it’s going to take some time,” he said.
ResMed shares rallied over the course of 2020 as the business sold hundreds of millions of dollars worth of its ventilators into hospitals across the world struggling to cope with the coronavirus pandemic. The sales boom bumped its revenues up by $US40 million last quarter alone.
In a call to investors on Friday morning, Mr Farrell and his management team said those sales had now slowed down and had no material impact on profits in the second quarter. Instead, the firm is now waiting for a full rebound of its sleep apnea treatments business to pre-COVID-19 levels.
Mr Farrell said there had been solid improvements across the company’s 140 markets, though patient demand for sleep treatments was still not where it was before the pandemic.
“In China, where we saw the sharpest declines in the start of the crisis, we’re now back to seeing 70 to 75 per cent of pre-COVID patient flow coming back,” he said.
Patient demand in the US was back to between 70 and 90 per cent of pre-pandemic levels, depending on the area in question. Germany was up to 90 per cent of where it was prior to last year’s coronavirus shutdowns, he said.
ResMed is banking on demand continuing to recover, doubling down on investing in research and development over the next 12 months to expand its use of digital healthcare and sleep treatments outside hospitals.
“One thing that has happened has been the adoption of digital health, and I think that’s going to be a permanent shift,” Mr Farrell said.
The shift to more remote and at-home care could let ResMed “not only get back to where we were [pre-COVID] but beyond it,” he said.
ResMed shares spiked at $27.99 in early trading on Friday and traded 0.7 per cent higher at $27.60 at 1pm AEDT.
Source: Thanks smh.com