ResMed acquires sleep and respiratory diagnostics software maker Somnoware

Still taking advantage of the fact that competitor Philips’ respiratory care business remains stanched by its ongoing CPAP machine recall, ResMed continues to carve out an even bigger foothold for itself in the shared space.

The latest land grab comes in the form of an acquisition. ResMed announced Wednesday that it will scoop up Somnoware, the maker of a software platform that gives clinics and doctors a single place to house their diagnostic and care management workflows for patients with sleep disorders and other respiratory conditions.

Though ResMed will integrate all of Somnoware’s staff and software solutions into its own business, the company said it plans to retain the “open and device-agnostic nature” of Somnoware’s technology, allowing it to still be used with diagnostic tests and treatment devices from a wide range of suppliers.

“We’re committed to driving wider adoption of Somnoware’s open and interoperable platform to help more people with [obstructive sleep apnea] or COPD get the diagnoses and treatment solutions they need,” Lucile Blaise, president of ResMed’s sleep and respiratory care division, said in the announcement, adding, “Improving patients’ experience and health outcomes is our common goal.”

ResMed didn’t disclose the financial terms of the deal but noted that the acquisition will have no material impact on its financial results.

Somnoware’s software is meant to be used by sleep labs and pulmonary function testing labs to streamline the process of scheduling diagnostic tests and analyzing results. From there, physicians can access the findings and order CPAP and BiPAP machines and other devices as needed, then track how patients use the devices and set follow-up appointments. All of those tasks are conducted through Somnoware’s platform, which can in turn be linked directly to each patient’s electronic health record.

That system “naturally complements” ResMed’s existing roster of digital respiratory healthcare tools, Bill Shoop, general manager of the company’s North American business, said in the announcement.

The newly acquired software from Somnoware will slot in just ahead of ResMed’s existing care management platforms: AirView, which connects to ResMed’s sleep and ventilation devices to help monitor patients’ respiratory conditions, and Brightree, which is aimed specifically at post-acute care providers—and which arrived under the ResMed umbrella in an $800 million acquisition in 2016.

In the two years since Philips began a recall of 5.5 million respiratory devices—the vast majority of which are CPAP machines—ResMed has stepped up to fill the resulting void with its own sleep apnea treatments.

It’s working: In its most recently reported financial results, covering the third quarter of its fiscal year 2023, ResMed broke a record set just a few months before to report its highest-ever quarterly revenues. They reached $1.12 billion for the period, nearly 30% higher than where they were a year prior.

That’s instilled quite a bit of confidence in the company. When asked about Philips’ imminent return to CPAP sales during a call with investors about the winning quarter, CEO Mick Farrell said, “I know we’ll be able to beat them when they come back in. … We’ll keep our share and grow it—and game on.”