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ResMed Shares Drop Following Weight-Loss Drug Trial Outcome

by Daisy

Shares of ResMed, a supplier of breathing technology, experienced a sharp decline after Eli Lilly, a pharmaceutical company, announced the results of trials for its weight-loss drug, tirzepatide, which showed a reduction in the severity of sleep apnea.

ResMed’s Australia-listed stock fell by 12% midway through Monday’s trading session, making it the worst performer on the S&P/ASX 200 benchmark index.

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Eli Lilly reported that late-stage trials of tirzepatide resulted in the resolution of sleep apnea in 43% of patients. When the drug was combined with positive airway pressure therapy, similar to the type provided by ResMed machines, the resolution rate increased to 51.5%.

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Analyst Mathieu Chevrier from Citi noted that this data challenges ResMed’s assumption that weight-loss drugs reduce the prevalence of obstructive sleep apnea by only 15%. He suggested that there could be potential upside risk to this number based on the trial results.

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While the trial supports the use of combination therapy, there is a concern that some patients may discontinue continuous positive airway pressure therapy over time, according to Chevrier.

Eli Lilly has submitted tirzepatide to the U.S. Food and Drug Administration for approval as a treatment for obstructive sleep apnea.

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