Dive Brief:
- Resmed said Monday it has closed the $340 million takeover of Noctrix Health, adding a device to treat restless legs syndrome to its portfolio.
- Noctrix received de novo authorization for the device, which noninvasively stimulates nerves to treat RLS, from the Food and Drug Administration in 2023.
- Resmed has bought Noctrix, which has an annual revenue run rate of about $24 million, because it believes Noctrix’s connections to physicians and home medical equipment providers can fuel growth.
Dive Insight:
Resmed disclosed the deal on its third-quarter earnings call in April. RLS affects about 17 million people in the U.S., Resmed CEO Mick Farrell said on the call, and most prescriptions for the condition are written by sleep physicians. Resmed’s existing portfolio of CPAP, APAP and bilevel therapies is also prescribed by sleep physicians.
Noctrix’s device, Nidra, flows through the same home and durable medical equipment delivery channel that Resmed uses for its sleep products, Farrell said. The overlaps informed the CEO’s belief that Resmed is the best owner for the asset and “can scale it faster than anyone.”
The acquired company’s revenue growth rate and gross margins are higher than Resmed’s, Farrell said. The CEO expects Nidra sales to accelerate as part of Resmed, predicting that “we’re going to help them get more market access, more reimbursement and grow faster than they are.” Because Nidra is early in the lifecycle, Resmed will need to invest in R&D, sales and marketing to support the asset, the CEO said.
Noctrix published data on the device in 2023, reporting a 45% response rate after four weeks. The sham treatment achieved a 16% response rate. The response rate on Nidra increased to 61% by the end of a four-week open-label extension to the study.
The trial enrolled patients with RLS symptoms that medications failed to treat. Dopamine agonists are the most commonly used first-line treatment, but long-term use of the medicines can cause symptoms to worsen. No drugs are approved for second-line use. Current therapies for RLS are “awful,” according to Farrell, who said the drugs have many side effects that create “a huge opportunity” for Nidra.
