JHVEPhoto Barron's said this week that ResMed ( NYSE: RMD ) trades at a compelling valuation after the stock sold off last month in reaction to positive data for Eli Lilly's ( NYSE: LLY ) GLP-1 therapy, tirzepatide, in obstructive sleep apnea, a condition targeted by the MedTech company. In late June, Lilly ( LLY ) said tirzepatide, marketed as Zepbound for obesity, met its main goal in a Phase 3 program for OSA, and the pharma giant anticipates a potential label expansion later this year. ResMed ( RMD ), which markets masks and CPAP (continuous positive airway pressure) machines for OSA, lost more than 11% in reaction, while Philips ( PHG ), its main rival in the market, remained flat.
In its latest edition, due on Monday, Barron's argued that San Diego, California-based MedTech remains attractive despite the selloff. The publication noted that its products, usually covered by Medicare, offer a "decent value," as some "last many months." Even their prices range from under $100 to just over $1,000, compared to about $1,000 or more required for a monthly supply of GLP-1 drugs which include tirzepatide and Novo Nordisk's ( NVO ) semaglutide.
Additionally, the company caters to an untapped market, treating "tens of millions" out of nearly a billion individuals estimated to be suffering from mild to severe OSA globally. Regarding valuation, ResMed ( RMD ) trades roughly in line with the S&P 500, despite historically trading at a premium to the market. ResMed ( RMD ) itself consid.