ResMed continues flashing the potentials of its gained capital from Philips’ 2021 recall by announcing another acquisition in only two months.
ResMed yesterday announced the acquisition of Leipzig, Germany-based company, mementor, which the company is hopeful will strengthen its overall sleep portfolio in the country. mementor, which was founded in 2014, owns the digital insomnia therapy solution, somnio.
The digital health application is Germany’s first and only app of its kind in the field of sleep medicine. Additionally, the system is compliant with the European Union’s data protection requirements under the General Data Protection Regulation. somnio has demonstrated effectiveness in two published clinical trials—one presented at World Sleep Conference 2022 and another published in Behavioural Cognitive Psychotherapy—showing sustained improvement in users’ sleep after two and 12 months.
According to a study in the Journal of Sleep Research, approximately 1 in 10 people are affected by clinically relevant insomnia. A study in Brain Sciences also reported that nearly 3 in 10 people have sleep apnea. Of these numbers, currently only a small percentage of affected people receive Germany’s S3 guideline recommended cognitive behavioral therapy to treat insomnia. mementor says it’s closing this gap in care with somnio.
With the acquisition, mementor has increased access to ResMed Germany’s broader network to help increase somnio adoption as a digital therapy alternative for insomnia. Currently, somnio is available in Germany through “app on prescription.” Both companies report that the acquisition will complement each other to increase awareness of disease and access to effective home treatments for insomnia.
“mementor is an ideal fit for ResMed Germany and, more important, millions of people across Germany who want to improve their sleep and overall health,” said Katrin Pucknat, president, ResMed Germany. “The founders have identified a large and neglected area of healthy sleep with an opportunity to help millions of people solve their chronic sleep issue with an easy-to-use digital at-home solution. We look forward to working with the team at mementor to help even more people in Germany achieve good, healthy sleep.”
ResMed Germany will integrate mementor as a separate business segment and will serve as a platform for further digital health developments in the field of sleep.
MD+DI previously reported that the “unlimited demand” for ResMed’s sleep apnea machines has given the San Diego, CA-based company the capital to get involved in more M&A. This unlimited demand is a result of Philips initiating a massive recall in 2021 of between three million and four million ventilators and sleep apnea devices because of the foam used to dampen the machines’ sound degrading “due to high heat and humidity and/or ozone-based cleaning, and emitting small particles to irritate airways.” The gases released by the degrading foam may also be toxic and carry cancer risk.
In a previous article on MD+DI, it was reported that Needham & Co.’s Mike Matson performed a scenario analysis to examine the potential benefits that ResMed could see from the Philips recall. The analyst ultimately concluded that the benefits could vary widely, but Needham & Co. did raise its price target on ResMed’s stock at the time from $229 to $267 based on the results. Additionally, Matson reported that ResMed could end up with market share gains ranging from $106 million to $372 million.
With the Philips recall, it seems ResMed has taken the helm and is capitalizing on its favorable position in the market.
“We believe that [ResMed] is likely to gain market share due to the recall,” Matson said in his June 2021 report. “[ResMed] has indicated that its devices have a different design and that it is not aware of any reports of safety hazards with its devices due to high heat and humidity and/or ozone-based cleaning. Philips has indicated that the repair process may take up to a year, and we believe that some portion of patients with the Philips devices may end up switching to [ResMed] devices either because they don’t want to go without treatment while awaiting the repairs, or they are eligible for a replacement through their insurance plans. And we believe that newly diagnosed patients may be more likely to end up with a [ResMed] device due to the potential shortage of the Philips devices.”