Some may have seen this , others may not have...Alex Waitlitz and part of an interview .......Patrick: Let's get into talking some specific stocks. One of the companies in your portfolio is Oventus (ASX:OVN), which produces a sleep apnea product, which puts it in competition with one of Australia's most successful companies ResMed (ASX:RMD). Could you tell us about the similarities or the differences between those two products, and what attracts you to the Oventus product?
Alex: Well, I think Oventus is really interesting story because the ResMed has been, as you said, a huge success. What we've learned through ResMed is how big a problem sleep apnea is and other sleep disorders, including snoring and so on. So as people are talking more about their health issues in today's world, it's coming out, it's even a bigger problem. The numbers are just huge in terms of people's discomfort and also the effect on GDP in terms of people's ineffectiveness at work when they don't sleep or haven't had a proper sleep that a lot of time off and a lot of under-performance. So it's a huge problem and it's a growing problem, people becoming more aware.
Now, ResMed has captured that market and done brilliantly, but with a machine that is very loud when you put the CPAP over your face, it's like wearing a mask, it's almost like you're an astronaut, having it confined there, it's very uncomfortable. It's hard to lug around. It's a big unit if you're travelling. The thing about Oventus, which is an Australian-based patented technology, it's the newest type of technology in an industry that's been doing the same thing for some 20 odd years. So as we've spent more and more time on the technology side, we're always looking for something that is a disruptor, something that can make a difference and address still a big market problem.
So Oventus is such a company. But being a very small company fighting against a giant and getting market share is a difficult process. So it requires capital, it requires patience, it requires education, it requires scientific confirmation of the effectiveness of this oral device that they've got. That takes a bit of time, and it's been a bit disappointing. Certainly COVID hasn't helped with a lot of the dentists and sleep clinics being actually closed. So they've had to adapt and then now teaching people how to get to fit out remotely with the kit that can be sent to you and training over a laptop or some other mobile device.
But we believe that the contrast is so significant relative to the cumbersome CPAP that it will capture some of the market. The market is so big that this company can be very valuable. So you've also got to put it into perspective. This company is only valued at something like 20 or 25 million Australian dollars. So what sort of sales and penetration would it take for this company to be a lot more valuable? We think even though it's taken a bit more time than we would've liked, we think the risks reward from a company like this is terrific, and it's going to do fantastically well for people's health and lifestyle enjoyment.
So I love those companies that can potentially have a great financial return and you're actually helping people's wellbeing. I think that's like the golden ticket, if you can do that. And if we can be a small part of that and help them on their journey, then I think the team attorney will be very proud of that outcome. But it's not there yet, but I think it's a company to watch.
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