Resmed’s fiscal year 2025 results highlight a focus on improving patient flow through the sleep care funnel. Creating a frictionless, seamless funnel is a concept that Resmed CEO and chairman of the board Mick Farrell returned to several times during the company’s earnings webcast.
With $1.7 billion in free cash flow available to potentially go toward additional tuck-in size acquisitions—on top of the recent ectosense, Somnoware, and VirtuOx acquisitions—Resmed appears to be systematically removing barriers that prevent patients from progressing from symptom recognition through diagnosis to treatment. The company’s coordinated approach targets junctures where patients typically face delays or drop out of sleep care.
Recent Acquisitions Clear Clogs
The COVID-19 pandemic created significant backlogs in sleep medicine, with sleep labs operating at capacity and struggling to expand in-lab testing capabilities. Farrell acknowledged this reality: sleep labs remain “amazing partners but they’re full,” he said during the earnings call, not expanding their in-lab testing capabilities post-COVID. This constraint has created extended wait lists that continue to impact patient care.
He outlined how three key acquisitions work synergistically as a portfolio that streamlines patient flow.
- Ectosense and the NightOwl Device: Resmed acquired Ectosense, which developed the NightOwl—a Food and Drug Administration-cleared fingertip-sized wearable home sleep test. “If there aren’t companies…driving home sleep apnea testing, smooth software, and scalable sleep apnea testing, then Resmed—as the global leader in this space—has to step in. So we’re doing that with that wearable home sleep apnea test from NightOwl,” Farrell said.
- Somnoware Software Integration: The acquisition of Somnoware brings specialized software for sleep and pulmonary physicians directly into Resmed’s ecosystem. Resmed retained Somnoware’s CEO as head of Resmed’s innovation and growth group. “As you look at our AirView software and our Somnoware software, watch this space as we start to bring those types of things together to create seamless and frictionless flow of patients through the funnel,” he said.
- VirtuOx for Scaled HST Services: VirtuOx will continue operating independently under its own brand, ensuring continuity for existing physician and provider relationships. VirtuOx accelerates the rate of people moving from symptom recognition to home sleep apnea testing, and it keeps more patients on the path to treatment.
“These businesses will help patients move through the sleep care funnel more efficiently,” Farrell said.
Expect more tuck-in acquisitions forthcoming from Resmed. “You will see us continue to selectively invest in our what we call digital sleep health concierge capabilities, including screening protocols, clinical tools, seamless workflows, and cloud-connected care pathways,” Farrell said.
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