And yeah, I think as we move forward, we’ll learn more and we’ll keep updating as we go every quarter on our flow of patients that come into the funnel, how we’re seeing them and how we’re taking care of them through our own demand gen, through the demand gen that will be driven by this Big Pharma. And one that we didn’t get a question on, but I talked about on my prepared remarks there on Big Tech. I think the fact that there’ll be wearables on tens of millions, maybe hundreds of millions of people’s wrists, looking at oximetry, looking at nocturnal sleep, looking at nocturnal breathing and helping patients find out if they’re not sleeping well, they’re not breathing well. I think that might actually be a higher tidal wave than the Big Pharma tidal wave.
But we’ll watch that as we move forward, DAN. Thanks for the question, Brett.
Operator: Thank you. Next question is coming from Mike Matson from Needham & Company. Your line is now live.
Mike Matson: Yeah. So with the news that Coops [ph] is exiting the non-invasive ventilation market, is there an opportunity for ResMed to pick up some share in this category? And if so, can you maybe talk about how big you think that market is?
Mick Farrell: Yeah. Thanks for the question, Mike. And the competitor you mentioned is leaving the U.S. market for life support ventilation. They will still, at this point, I think, claim to be coming back with CPAP, APAP and Bilevel. So that Bilevels are non-invasive ventilation. They reach an area of non-invasive ventilation. So we expect them back in that market. Look, I think there are opportunities in ventilation. Obviously, we saw through the COVID crisis, there was a very large volume of ventilators sold into the world in 2020, 2021, 2022. We talked about even just in 2023, we’re lapping a quarter where there were large sales a year ago into China of ventilators. And so I think, if you like, the supply of ventilators into the market is quite high.
So there’s no huge sort of immediate opportunity by our competitor leaving life support ventilation in the U.S. But we are there to take care of our customers wherever they are, whatever country they’re in and whatever needs they have. For us, the more material growth is really around driving our CPAP, our APAP and our Bilevels with AirSense 11 and AirCurve 11. And the AirCurve 11, in terms of your question, non-invasive ventilation, has AirCurve S, AirCurve ST and AirCurve FTI. And at the highest level, it has an AirCurve ASV, which is the highest level of adaptive server ventilation. All these together form types of non-invasive ventilation to treat patients with COPD or neuromuscular disease that leads to respiratory insufficiency. And ResMed has the best platform in the planet to treat them.
We think it’s a huge opportunity. Many hundreds of millions of patients worldwide have COPD, neuromuscular disease and respiratory insufficiency and ResMed is there for them now and will be for them there in the future. It’s a long-term growth opportunity. It’s not a short-term pop. It’s a long-term growth opportunity for us to take care of these patients and help them sleep better, breathe better and our AirCurve platform is going to be fantastic to do that.
Operator: Thank you. Our next question is coming from Lyanne Harrison from Bank of America. Your line is now live.
Lyanne Harrison: Good morning, all. I might come back to the real-world data, Mick. Obviously, some good resupply improvements there, 300 basis points and 500 basis points. But is there anything you can share on the data or the trend for lower severity OSA patients, sort of the mild to moderate categories? And then also, secondly, on the data, whether we do this or a separate data set, what trend are you seeing in the percentage of patients who have ceased CPAP therapy as a result of weight loss drugs? Yeah. So it’s a good question, Lyanne, and there are sort of multiple parts to it. I’ll address it at a high level, which is to say, yeah, look, the real-world data is excellent. It’s the largest data set out there with 660,000 patients that have been prescribed a GLP-1 and are on positive airway pressure therapy and we’re really laser-focused on tracking that cohort very carefully.
We can and will look to, in the future, slice and dice it by AHI, 5 to 15, 15 to 30, 30 plus. We’ll look to slice and dice it by age, by gender, by geography and others. A lot of that will be for our internal work so that we can best drive social media marketing and know which patients to go after. For instance, the public information out there is that women are using GLP-1s more than men, and they’re more adherent to the GLP-1s than men are. The rate that people quit the GLP-1 therapy is a lot higher in men than women. And so we’re tracking a lot of that information publicly and we will, over time, release it. We haven’t seen at all a correlation or information around people quitting PAP therapy because of a GLP-1. It just doesn’t compute in the data we’ve got.
It’s the other way that it’s a huge tailwind for people coming in. Look, when we see — as we say, we get 87% adherence. We’re very proud of that. For the 13% that don’t get there, we look at all the reasons why. Is it claustrophobia? Is it insomnia, where they have a psychological condition where they can’t fall asleep and then they blame it on the CPAP mask when it’s really a fact of a need to have treatment or their insomnia, as well as or in parallel to or even before their OSA. So we’re looking at all types of reasons for that. But, look, we’ll continue to update you and the rest of the world as we do the slice and dice by HI, by age, by gender, to find the best way to help patients find the best path to therapy. But right now, we’re seeing a huge trend of more patients coming in, more motivated patients, and our challenge is to keep up with that and make sure that we can scale and help them get on that great digital health journey.
Operator: Thank you. Next question is coming from Steve Wheen from Jarden. Your line is now live.
Steve Wheen: Yeah. Thanks very much. I just had a question around the AirSense 11 and its availability and the pathway to it being kind of the platform that you 100% rely upon. If you could just give us an update as to how that looks for the remainder of this year and perhaps into 2025?
Mick Farrell: Yeah. Thanks for the question, Steve. I’ll start out with this fact that we’re still selling the S9 product in China right now. And so, getting rid of it completely, right, the AirSense 10, will take a while because there’s great markets around the world where technology is useful for a long period of time. But I think what you’re talking to is the materiality of the AirSense 11 becoming the primary in global markets. I can tell you this, the AirSense 11 is already the primary platform in our biggest market in the U.S. It’s already well into the majority and growing quickly. And no customer who wants to order from ResMed can’t get AirSense 11s, as well as AirSense 10s. We do limit sometimes the AirSense 11s, because there’s so many customers from small, large regionals to statewide groups to nationals and we’ve got to balance the flow to make sure every person has a fair chance to get an AirSense 11 and then we cover the difference with the awesome AirSense 10s.
So, we’re already over the majority in the U.S. As we look at other big markets around the world, you know, Germany, Japan, France, U.K., and beyond, the AirSense 11s are ramping very quickly and they’ll quickly get to the majority across those areas. As we look to more of the countries, hundreds more countries around the world than those top 20, our job is, as I said in the prep remarks, to get the regulatory clearances. Some of these countries require all separate paperwork and time and effort, and so we have to analyze how quickly we can do that and we are also working with authorities to see if we can get clearances that can be used across multiple regions. And so, Steve, we’re working very hard to get AirSense 11 in all countries and to the majority in all countries.
I hope that answers your question.
Operator: Thank you. Next question is coming from Saul Hadassin from Barrenjoey Capital. Your line is now live.
Saul Hadassin: Yeah. Thanks. Good morning. Just another quick one for Brett. Brett, just looking at the inventory balance, it came down quite significantly into the third quarter. It’s the lowest inventory has been, I think, since 2022. Just wondering where you think inventory goes from here. Do you think you need to start to sort of rebuild as it relates to sort of product demand or do you think you can drive that dollar value down further? Thanks.
Brett Sandercock: Yeah. Hi, Saul. I think, yeah, we had — I mean, the team’s been working hard on that for a while now, so you’re starting to see the results there in the balance sheet and in the inventory, which is great. We’re getting pretty close to our targets on inventory, so I’d say it’s — there could be modest reductions, there could be modest gains there. It’s more around making sure we’re balancing supply and demand now. So I’d say it’s pretty close to targets on kind of where we’re at now for the inventory.
Saul Hadassin: Thanks.
Operator: Thank you. Our final question today is coming from Matthew Taylor from Jefferies. Your line is now live.
Mike Toomey: Hi, guys. It’s Mike Toomey covering for Matt Taylor. Thanks for taking my question and fitting me in here. Coming back to Philips, I know you said you’re maintaining or growing share in the markets where they’re returning, but are you seeing any significant pricing pressure or pricing discounts from them and any thoughts on when they might return to the U.S. market based on the consent decree? Thanks.
Mick Farrell: Yeah. Thanks for the question, Mike. And no, look, what we’re seeing in the markets where that competitor’s returned is that they’re pricing for value and they’re trying to compete on value. And primarily as they come back from sort of zero percent share with new patients as they start in the market, they’re competing with the sort of Tier 2 and Tier 3 players, so a local player in Europe or a local player in Asia, and they’re not touching our share as the global market leader and global technology leader in this space. And the work that we’ve been able to do these number of years that they were out of each market is to really entrench ourselves because we’ve got the lowest cost, the highest efficacy, the best technology, and physicians love our digital data, patients love the engagement with myAir and the whole ecosystem creates that value.
So we really have seen, you know, as they come in, they’re pricing for value and competing with Tier 2, Tier 3 players in those markets. As to when they’ll re-enter from zero percent new patient share into the U.S. market, I don’t know. You can do your own analysis on consent decrees. This one’s a very severe one. It has a lot of inspectors, sort of five times the normal number of inspectors. I think five versus one and a lot of constraints on that. I look forward to great competition. We’ve got good competition from the players there now. When they come back, they’ll have to compete with them first and us after that. But, no, look, we were winning and taking share from that competitor in 2019 all the way from 2010 to 2019. We’ll continue to do that and beat them whenever they come back to market.
Thanks for the question.
Operator: Thank you. We’ve reached the end of our question-and-answer session. I’d like to turn the floor back over to Mick for any further closing comments.
Mick Farrell: Great. Well, thanks, Kevin, and thanks to all of our stakeholders for joining this call, especially our shareholders. The opportunity in front of ResMed is huge and largely untapped. It’s an incredible runway. We see more and more people coming into the healthcare system. This will benefit us as we help them sleep better, breathe better, and to live better and healthier and happier lives in over 140 countries. Thank you to 10,000 ResMedians, many of whom listened to this call and are also shareholders, for all that you do today and every day. With that, I’ll hand the call back to Amy and we can close it out.
Amy Wakeham: Great. Thank you, Mick, and thanks, everyone, for listening. We do appreciate your interest and your time. If you have any additional questions, please don’t hesitate to reach out directly. This concludes ResMed’s third quarter 2024 conference call. Kevin, I’ll turn it back to you to officially close us out.
Operator: Thank you. This concludes ResMed’s third quarter fiscal year 2024 earnings live webcast. You may now disconnect.
