Of course Resmed have their place as the frontrunner in the moderate-severe OSA arena, I don't doubt that at all. They have built a very successful company around it. Apparently there are quite a number who don't tolerate the machines that well and give up on it too. Anyway, there are many milder forms where it's not a necessary solution and there are other alternatives available.
I don't think you can just write off the sleep program as a losing David v Goliath battle. I doubt they are even aiming to be in direct competition to Resmed's machines but moreso in a complementary role as a solution to mild OSA and primary snoring. The way that I can see RNO bringing a new product to market with a similar profile to their existing would be using a form of expiratory positive airway pressure, which the FDA did approve as a treatment for OSA a few years ago. Might work, might not - have to wait and see what they come up with. I'm certainly not writing them off before I even see what they have to offer though.
Also, I have done the numbers and there is no way that total revenue would need to be $100m+ (which is what you're suggesting with "many millions of units"). My definition is pretty much literal. 500k units would generate enough to cover costs, even with the burn these boys put out.
I am curious how you think a company with such a lousy future, destined to be cash poor for many years and making wrong moves not only attracted huge talent in an ex-Nike VP and Chief Exec of Western Europe in Scrimshaw but also attracted the attention and backing of Ronald Dewhurst, ex senior MD of Legg Mason and before that, a head inside of JP Morgan's Asset Management. Are you saying MR and MJ can sell a story that well to people such as them when you see the truth?
RNO Price at posting:
3.0¢ Sentiment: Hold Disclosure: Held
