amro update

ResMed Inc – Running off Big Pharma’s Hip

Over 82 million Americans currently rate themselves as poor sleepers…. Part of this problem is pure insomnia (nothing to do with RMD) and part is sleep aponea (closing of the air-pipe during sleep) for which RMD sells preventative sleeping masks.

The Big Pharma companies in the US are looking at sleeping pills as the next blockbuster drug for the US market and have undertaken massive advertising campaigns (up to US$600m pa) targeted at prime time tv markets.

How does a sleeping pill benefit RMD who sell sleep masks???

The nature of the advertising undertaken by Big Pharma doesn’t specify the drugs they are selling, it merely pumps out the line “If you are having trouble sleeping, see your doctor”

Now some of these patients will see their doctor and be prescribed sleeping pills for pure insomnia (no benefit to RMD). However, through seeing their doctor some of these potential 82 million poor sleepers will undoubtedly be diagnosed with Sleep Aponea (In steps RMD with their sleep masks!)

We believe there is potential for a 10% increase in diagnosis of sleep aponea in FY07 and FY08, on the back of this free advertising, which could in turn provide upside risk of up to 10.9% to our RMD valuations.
There’s nothing like a free ride boys and girls……. Get On!