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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 submitted regulatory filings with the FDA, seeking a label expansion for the once-weekly injectable, and a decision was expected as early as later this year.
