Developer and marketer of medical equipments for treating sleep disordered breathing and other respiratory disorders, ResMed Inc. (RMD) announced the commercial launch of its latest mandibular repositioning device Narval CC in the US. The product was showcased for the first time in the American Academy of Dental Sleep Medicine annual meeting.

This Narval CC was first developed by France-based Labaratoires Narval, which was acquired by ResMed in 2009. Since its launch in France, Narval CC has enjoyed a market leadership as a substitute method for obstructive sleep apnea and snoring patients.

With the Labaratoires Narval acquisition, ResMed also provided a supplementary solution to match its broad range of positive airway pressure (PAP) solutions for snoring and obstructive sleep apnea patients.

ResMed is one of the leading players in the generators, masks, and related accessories market, for the treatment of obstructive sleep apnea (OSA) and related respiratory disorders. The company is focused on developing medical equipment for the diagnosis and treatment of sleep-disordered breathing.

The company remains hopeful about further business expansion considering the huge and underpenetrated OSA market. Also the latest research report, which showed that improper OSA treatment, can lead to heart disease, type 2 diabetes, obesity, chronic obstructive pulmonary disease and cancer directed to more general awareness in the market.

The company also remains encouraged with the launch of Narval CC as an alternative to the traditional PAP treatment, which many a time patients fail to continue with.

We remain encouraged with several recent strategic initiatives of ResMed including product launch and acquisitions. Moreover, ResMed is working on a continuous basis to expand its international operations. Earlier in May 2012, the company launched its first product in Japan named Omron Sleep Design HSL-101, a wireless sleep monitoring device.

The company has teamed up with CareFusion (CFN) in a 5-year exclusive distribution agreement, providing CareFusion the exclusive right to distribute the ResMed Stellar 100 and 150 non-invasive ventilators and their related accessories into the institutional healthcare market.

Based on a favorable product mix and growing demand in the sleep-disorder breathing market, ResMed reported 18% year-over-year increase in revenues in Americas while outside Americas, revenues increased 4% (up 7% at Constant Exchange Rate) in the third quarter of fiscal 2012. ResMed’s overall business remains relatively unimpaired by economic cyclicality.

The homecare industry is benefiting from an aging population and a trend toward greater availability of medical care service outside hospitals. For fiscal 2012, the Zacks Consensus EPS Estimate was $1.71 on revenues of $1.4 billion.

We believe that the under-penetrated silhouette of the Sleep Disordered Breathing (“SDB”) market with increasing patient and clinical awareness, lends resilience to ResMed. The company currently retains a Zacks #1 Rank, which translates into a short-term Strong Buy rating. Also, we have a long-term Outperform recommendation on the stock.

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