ResMed Inc. (NYSE:RMD) Q2 2023 Earnings Call Transcript

Mick Farrell: Yes. Thanks for the question Matt. I’ll start and hand to Rob for further detail because it is a really important area for us. Look, if you think about — our competitor has been out on the market for 18 months and who knows. They’ve got to — we’ll find out probably later this week, they got an earnings call, maybe they’ll tell us what’s happened at the consent decree and give us some timing. Frankly, give the market some time it’d be good. We’ve run scenarios, they come back Monday February 1, July 1, we’ve also run scenarios that it’s January 1, 2024. And actually, in all those scenarios, ResMed grows and ResMed does really well, and ResMed does a really good job of taking care of the unmet patient need. So, if they come back earlier, come back Monday, we get a 60% plus or minus attach rate of our masks.

So, we get good GM contribution, great patient care in terms of the best masks in the planet going to them, and we’re able to drive that. Now, they’ll be starting from 0%, new patient share, they’re going to able to go and fight account-by-account. And they won’t be fighting against ResMed out the gate. They’ll be fighting against the Tier 2, 3, and 4 players that have come in to fill that part of the equation and they’re doing an okay job. And so they have to fight against the okay players. Then they have to fight against us, the market leader. But I look forward to them coming back actually in terms of the mask side of the business, it will be really good. The scenario where it’s further out, it’s later this calendar year or early next calendar year or beyond.

We’re okay with that too because we’re ramping up our supply, and we’re going to get closer and closer to meet all of customer demand in this. So, frankly, it’s not irrelevant, but it’s not a big perturbation of our long-term strategy and our long-term business. And we’ve got the scenarios and the little pivots that we need to have more masks or more demand gen in the different scenarios. So, I think investors and some analysts are thinking more about this — are worried — more worried about this than we are because we thought so much about it and have the scenarios and the playbook ready for all three of those scenarios and 2020 beyond. I look forward to this sort of people calling a binary. I see there’s a mild perturbation of the Monte Carlo sim that really doesn’t change in the long-term outcomes for ResMed and our patients is not changed in any of those scenarios.

But Rob, any further detail for Matt here?

Rob Douglas: Yes, Matt the only other thing I’d add is we sort of think of sort of market growth rate in terms of the patient lifetime journey through this condition — terrible condition, very serious and the biggest problem is awareness. And so you start off with how do you become aware of it. Does your primary care now to refer you to a sleep specialist? Can that specialist refer you to either home or lab testing? And then do you get a referral to a provider who’s got the capacity to look after you. And basically, staff capacity is even a big issue for them. And so — and then will that provide a look after long-term and keep the ReSupply programs. And our solutions are across all of those, but there’s bottlenecks in all of those parts of the patient lifetime — patient journey, if you like.

And as I say, we’re providing solutions across that and incrementally driving improvements across all of those. So, that provides a really good long-term outlook for steady growth in the business, as Mick was saying.

Operator: Thank you. Next question is coming from Michael Polark from Wolfe Research. Your line is now live.