@Goitre The AD109 results for Phase III were reported in May of this year.
Mick Farrell, CEO $RMD, was questioned about them at the 4Q results in August. He downplayed AD109 as a competitive threat. He sees it as an incomplete therapy, overshadowed by GLP-1s, and unlikely to disrupt PAP’s role as the frontline standard of care. Instead, he framed it as part of the broader ecosystem of adjunct or fallback therapies where ResMed still intends to “own the relationship” with the patient.
In further detail:
Competitive Threat from Apnimed AD109
Farrell was asked directly about oral drugs for sleep apnea, specifically Apnimed’s positive Phase 3 result for AD109.
He described AD109 as a “third-tier” therapy, behind ResMed’s gold-standard PAP (CPAP, APAP, bilevel) and its silver-medal mandibular repositioning devices (dental).
He argued that GLP-1 drugs (e.g., Zepbound) are a stronger competitor than AD109. In his view, GLP-1s have “taken the wind out of the sails of Apnimed” because they not only reduce apnea-hypopnea index (AHI) by about 50%—similar to AD109—but also deliver cardiometabolic and weight-loss benefits that AD109 cannot match
Positioning of AD109
Farrell said AD109 and similar drugs “only half treat the apnea”, leaving significant residual disease.
He suggested they are more likely to be used in combination with gold-standard PAP therapy, not as standalone replacements
ResMed’s Strategy
ResMed intends to maintain relationships with patients regardless of therapy type—PAP, dental, drug, or implant.
Farrell emphasized that many patients who fail alternative therapies eventually return to PAP, quoting Professor Jean-Louis Pépin: “The best alternative to failing positive airway pressure therapy is positive airway pressure therapy again.”
My View
I have agonised as much as many on the implications of the competitive threats for CPAP, whether from GLP-1 or the AD109 class of compounds. Much has been written on this platform.
Clearly, Mick has a vested interest in downplaying the threat. But for the moment it appears that as long as the pharmaceutical treatments remain only partly effective, they are being prescribed in combination with CPAP (it is there in black and white in the treatment guidelines). I believe the real threat is not so much from AD109, but from potential future drugs, perhaps as yet undiscovered. Imagine a drug that reduce AHI by, say, 85% across 50%+ of the population. Now that would be problematic!
Additionally, and for now, $RMDs data indicates that the presence of pharmaceutical treatments is driving more patients into the treatment funnel, and $RMD gets to benefit from that.
There seem to be both tailwinds and headwinds at play here, and I don't think anyone can yet say with much confidence how this will play out over the next 3, 5 and 10 years.
To @PhilO 's point, I think it is indeed $RMD's goal to own the sleep quality / breathing quality space, using and building out from all their capabilities. I think they are unlikely to acquire a competitor with a drug that is only partly effective.
So, for now, I am just keeping a close eye on the quaterly sales volumes. While variable from period to period, there is no indication at the moment that we are seeing any decline. On the contrary, the growth in the latest period was one of the strongest for a while.
For sure it is one to keep an eye on, but for now I believe that $RMD can sustain double-digit earnings growth for the foreseeable future alongside the emerging pharamceutical therapies. It is important not to be complacent, but I will let the numbers continue to do the talking.
Disc: Held in RL only