ResMed turns GLP-1 weight loss drugs from threat into market expansion story

Fears that GLP-1 obesity drugs would shrink the pool of sleep apnoea patients needing CPAP therapy have given way to a fund manager consensus that the drugs are instead growing ResMed's addressable market by driving more people into the sleep channel.

16 Jul 2026 · 5 min read

Fund managers covering Resmed CDI (ASX: RMD) have spent the past year working through what initially looked like an existential threat to the CPAP business, only to conclude it may actually be a tailwind. SG Hiscock & Company captured the shift in thinking in July 2025, noting that as news around GLP-1 obesity drug take-up continues to wax and wane on the share price, the fund is increasingly of the view that GLP-1s are resulting in more people entering the sleep channel, adding to the addressable CPAP market rather than shrinking it, as ResMed increases direct-to-consumer marketing to build awareness around obesity and CPAP therapy together.

Our recent channel checks with clinicians highlight Resmed continues to be very well positioned to capitalise on the growth opportunity and is now unquestionably the market leader in the sector growing above market and what we consider a sustainable competitive advantage through its distribution and product offering.

SG Hiscock & Company, Monthly Report, July 2025

A competitor's troubles compound the market share gains

ResMed's leadership position has been reinforced by ongoing difficulties at its main rival. SG Hiscock & Company noted in August 2025 that ResMed continues to gain market share in obstructive sleep apnoea as Philips works through its ongoing product recall issues, with a strong FY25 result driven by gross margin expansion as the benefits of scale and the easing of Covid-era supply chain and procurement issues came through. Yarra Capital Management, holding an overweight position, added that GLP-1 drug producer Novo Nordisk cutting its full-year guidance had, somewhat counterintuitively, improved perceptions of ResMed's own growth prospects, with the fund arguing the stock's earnings multiple did not reflect the attractive double-digit earnings growth opportunity it saw ahead.

Solid operating metrics through a broader med-tech selloff

By November 2025, ResMed's operating performance had held up even as a broader sector selloff dragged on sentiment. Pendal Group reported revenue growing 8% in constant currency, with the all-important US Flow Generator machine growth strong at 8% and gross margin beating expectations, leading to EBIT and NPAT coming in 1% ahead of market with bottom-line growth in the mid-teens. ECP Asset Management framed ResMed as having the most near-term upside among med-tech names caught in the broader sell-off, pointing to roughly 9% year-on-year revenue growth and another step-up in gross margin supported by better manufacturing efficiency and lower component and freight costs.

For the thesis, we care most about operating leverage, margin rebuild, and widening the sleep funnel. ResMed is leaning into diagnosis-to-treatment conversion and adherence tools, which help more patients finish the journey rather than drop out.

ECP Asset Management, Article, November 2025

Manufacturing and policy risks remain on the watch list

Not every factor in the outlook is fully resolved. Pendal Group flagged that ResMed is increasingly moving some manufacturing to America, and that the upcoming round of competitive bidding for durable medical equipment needs to be watched, alongside risk around a Section 232 trade investigation, though the fund noted the company is typically not significantly impacted by tariffs due to the Nairobi Protocol covering medical devices. Clime Investment Management, meanwhile, took a more tactical approach in July 2025, moderating its position following very strong recent share price performance purely to realign position sizing within its portfolios rather than any change in fundamental view.

What managers are watching next

With ResMed's market leadership reinforced by competitor disruption and a broadening addressable market from GLP-1 awareness effects, the catalysts fund managers are tracking are the pace of software services and rest-of-world growth, which had been running slightly below expectations but was forecast to accelerate, the outcome of the upcoming competitive bidding round, and whether the ongoing shift of manufacturing to the US changes the company's largely tariff-insulated cost structure.