ResMed slips as Wolfe downgrades on GLP-1 threat from Lilly

ResMed (NYSE:RMD) shares fell Wednesday after Wolfe Research downgraded the MedTech, citing risks to the company’s CPAP (continuous positive airway pressure) device business from a potential label expansion for Eli Lilly’s (NYSE:LLY) GLP-1 agonist tirzepatide.

Wolfe Analyst Mike Polark lowered his recommendation to underperform from peer perform with a $180 per share target on RMD to reflect a 20x P/E multiple, which he said was significantly lower than the stock’s current multiple.

His downgrade comes after Eli Lilly (LLY) said in June that the injectable marketed as Zepbound for obesity met the main goals in a Phase 3 program for adults with obesity and obstructive sleep apnea.

Shares of California-based ResMed (RMD) fell at the time as the drugmaker added that a decision on a potential label expansion for tirzepatide against OSA could be expected as early as this year.

The revised multiple reflects “disruption risks to RMD’s business rise in 2025-2026 due to Lilly’s likely launch of an obstructive sleep apnea indication for its GLP-1 medication tirzepatide,” Polark added.

Additionally, the analyst cited a 50-physician survey in which 50% of doctors projected lower CPAP volumes due to GLP-1s, compared to 33% in last year’s survey.