Nice move today, though ideally the volume profile would have been stronger.

It seems to have found some support near its 200DMA, stabilised yesterday, and had a good move up today.

Agree @Solvetheriddle

In the battle between Eli Lilly and Resmed or more broadly GLP-1 drugs versus CPAP it is still very early days.

Eli Lilly (LLY) has a market cap of US$480b and Novo Nordisk (NVO) $US480b.   The Aussie champ, Resmed has a market cap of $US30b.  

The major reported drug side effects of nausea, diarrhea, vomiting, constipation and bouts of stomach pain and the need to address food intake will no doubt be a focus for the drug developers.  LLY and NVO (and others) are not going to give up and they will continue to develop, market and make cheaper the GLP-1 class of drugs.  

Give it five years and it is likely many of the side effect drug issues will be either overcome or at least ameliorated.  The market opportunity is just too big.

Like England there will always be a Resmed.  It just won’t be what it used to be. 

A US broker view--ive bolded the main point imo

To:

Solve the riddle

Wed, 26 June at 3:39 am

ResMed cut at Oppenheimer after Eli Lilly’s tirzepatide sleep apnea data

01:37 PM | Eli Lilly and Company (LLY) | By: Dulan Lokuwithana, SA News Editor

Oppenheimer downgraded respiratory device maker ResMed (NYSE:RMD) to Perform from Outperform on Tuesday, citing an “air pocket” for the stock in the wake of encouraging data for Eli Lilly’s (NYSE:LLY) weight loss therapy tirzepatide in obstructive sleep apnea (OSA).

The maker of CPAP (continuous positive airway pressure) machines continued to fall for the third straight session on Tuesday after LLY announced detailed results from its Phase 3 SURMOUNT-OSA program in which the GLP-1 receptor agonist reached the main goals with or without PAP therapy.

“This GLP-1 data, in our view, will necessitate a structural shift in patient preferences, referral patterns, and ultimately choice of therapy,” Oppenheimer analyst Suraj Kalia wrote, with a particular emphasis on tirzepatide’s effects on disease resolution.

“Disease remission outcomes in SURMOUNT-OSA have overshadowed mean AHI reductions, which were strong in their own right,” Kalia said, referring to SURMOUNT-OSA’s main goal, measured using the clinical measure called apnea-hypopnea index (AHI).

However, the analyst ruled out near-term effects and argued that it will take until at least H2 2025 for true impacts to materialize, as tirzepatide is still not indicated for OSA.

With the data readout, LLY said Friday it has already submitted regulatory filings with the FDA, seeking a label expansion for the once-weekly injectable, and a decision is expected as early as later this year.  

@thunderhead I appreciate the timely post on $LLY’s announcement. Otherwise I would have missed this. While I’m on holiday, I exited my entire RL position at the open yesterday.

The thing that did it for me was that endpoints were reached both with and without CPAP. So for a segment of the OSA population, there is the real prospect of being prescribed a pill and not CPAP. (One of the key risks in my thesis.)

The various posts yesterday on SM covered all the key points. Many of the arguments are not new. But, with the pattern of what happened with SP last year, this time I have decided to act differently. I’ve decided to step to the sidelines and then to evaluate what happens over time. If I consider the thesis is intact, I’ll likely get a lower re-entry point, as the short thesis gets a new lease of life over coming weeks.

What’s different this time? Stronger clinical data, but as importantly a market response even given the $RMD data from earlier this year that GLP-1s are driving more volume into the funnel (we didn’t have that data last time).

While the economics still favour CPAP, as others have said, this will likely be transient (albeit years).

To be clear, we may be some time from this impacting $RMDs operational performance and, for reasons gone over before, perhaps it never will. But as another StrawPerson said yesterday, these dynamics mean it’s not unreasonable to question whether $RMD is a bottom drawer stock.

I’ve not mentioned all the elements of the investment thesis that remain intact, and which are unchanged by the latest news. Indeed, it was quite a difficult call. But that is the advantage of being a retail holder in large caps. It is easy to get in and out. So, given the uncertainty, like many others I’ve chosen to exercise the option. (It may be just noise, but the option value is real.)

I will continue to monitor closely, with a view to getting back in. But I’d prefer to evaluate all the information dispassionately from the outside.

I’m not posting much on SM while on holiday, but as a previously outspoken $RMD bull, I thought it important to put my position on the record in a timely manner.

Disc: Not held