American medical equipment company Resmed (RMD) saw its stock take a beating on Monday due to a new rival in the obstructive sleep apnea treatment space. The big news hitting RMD stock today is Eli Lilly (LLY) receiving approval for Zepbound as an obstructive sleep apnea treatment for obese adults. This marks the first and only instance of a prescription drug being designated as such a treatment by the Food and Drug Administration (FDA).
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A study of Eli Lilly’s Zepbound found it lowered sleep apnea disturbances by five times as much as a placebo. Additionally, patients lost an average of 45 lbs during the trial, or 50 lbs when combining Zepbound with PAP therapy, as compared to 4 lbs and 6 lbs with a placebo.
Why This Matters to RMD Stock
The reason the FDA approval of Zepbound as an obstructive sleep apnea treatment matters to RMD stock has to do with Resmed’s business. The company’s main focus is creating cloud-connected continuous positive airway pressure (CPAP) devices. These are used by obstructive sleep apnea patients to provide them with continuous air while sleeping.
Considering Zepbound can treat sleep apnea through a prescription, it makes sense that Resmed’s stock would suffer alongside its approval. This has RMD shares down 4.38% as of this writing. However, the stock is still up 39.22% year-to-date.
Is RMD Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Resmed is Moderate Buy based on five Buy, four Hold, and one Sell ratings over the last three months. With that comes an average price target of $247.14, a high of $283, and a low of $180. This represents a potential 4.16% upside for RMD shares.
