Investors think this stock could be the next ResMed and sent it up over 90% after it won FDA approval

Nick Sundich Nick Sundich, December 4, 2023

Which stock will be the next ResMed? Investors seem to think it could be Compumedics (ASX:CMP), having sent it up over 90% this morning after obtaining the latest green light from the FDA.

 

Compumedics (ASX:CMP) share price chart, log scale (Source: TradingView)

 

Who is Compumedics and could it really be the next ResMed?

Compumedics has been listed since 2000 and sells technologies for sleep disorders, like ResMed does. Today is not the first time it obtained FDA approval for the technology, but this arguably the biggest in the company’s history. You see, the FDA gave the green light for Somfit which is a wearable device that can be used to diagnose sleep disorders through collecting data as patients sleep in the comfort of their own home.

CMP told shareholders there was an addressable market of US$110-180m in revenue and it would target 10-30% of this in the next 24 months. It has already hired sales staff in the USA to pursue commercialisation, and noted that it has already sold $1.2m of these devices in Australia, giving hope there is demand in the USA. The company also reaffirmed its FY24 guidance of at least $44m in revenue and at least $5m in EBITDA.

 

Great news, but execution will be the challenge

The experience of companies like 4D Medical (ASX:4DX) and Avita Medical (ASX:AVH) depict that there is no guarantee that a company is will have success (either in general commercial terms or from a share price perspective). Nonetheless, companies like ResMed have shown it is possible to succeed in the US market, and today’s FDA approval means it is a possibility – even if it is still small, it is at least an existent possibility.

 

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