ResMed Inc. (RMD) Earnings Call Transcript & Summary

Hello, everyone. My name is David Low and I cover health care in Australia for JPMorgan. This afternoon, we've got Mick Farrell, CEO of ResMed. Glad to have you, Mick.

Thanks, David, and thanks, everyone, for joining us. You can read through our disclaimers on our website. And I'm here -- if you're a speed reader, then I'll move through ResMed at a glance. So ResMed is the global leader in respiratory medicine. ResMed stands for respiratory medicine. We're also the global leader in residential care. We make the smallest, the quietest, the most comfortable and most cloud connected and most intelligent therapies on the planet. We are the global leader in digital health solutions with over 22.5 million 100% cloud-connectable medical devices, selling in over 140 countries worldwide. And we have an asset that's a lot more valuable than our $25 billion market cap, which is 16 billion nights of medical data in the cloud. We liberate those data and then we use them to extract value for patients to improve patient outcomes directly with myAir. We improve business outcomes in the health care system for our customers, the providers and the physicians. And we lower the cost of delivering health care, lowering labor cost by up to 50% for people in our channel. We're growing at double digits in the volume of patients we treat every year and we're leading this market as the #1 leader in over 140 countries worldwide. So sleep apnea is a global epidemic. It impacts over 1 billion people today worldwide. They suffocate every night. Not everyone knows Greek for without breath, apnea, so I say suffocation. It shows what it is. People stop breathing, and the only reason they don't die acutely is because their neurovascular and cardiovascular systems surge of norepinephrine and adrenaline that wakes them up and their bed partner. Sorry for the people in the back, that was a little loud, but that's what the bed partner goes through every time there's an apnea. And to be clinically significant, there need to be 5 apnea suffocations per hour with any symptoms of sleepiness or 15 times per hour with no symptoms. That's every 4 minutes of sleep you need this in the U.S. In some of the countries, it's higher than that. We make the world's best noninvasive treatment for this, the lowest cost and the most efficacious. We're also in a number of other big markets, chronic obstructive pulmonary disease we treat directly with our noninvasive and life support ventilators as well as some neuromuscular diseases, Duchenne muscular dystrophy, and others. We also treat OSA combined with COPD in the overlap syndrome. We've got some brand-new cognitive behavior therapy technology, CBTI, for insomnia. CBTI is treating patients in Germany and Australia right now. It's early days. We basically take the psychologists, psychiatrists and put them into an app. And we've been able to move that at scale, and it's growing fast. It's a number of millions of dollars of revenues, early days. But when you overlap OSA and insomnia that is clinically called COMISA, and when we talk about adherence rates, I think one of the best ways we can drive adherence in our own space is with the technology we already have around combined insomnia with sleep apnea. I'll talk about that a little later. So look, we're here at the JPMorgan Healthcare Conference. We're all looking at these global issues, these global trends, but we have aging populations in most of the countries we're in and we have growing populations in most of the other countries that we're operating in. We have an acute shortage of respiratory therapists and sleep pulmonary doctors. This is across all of health care. Everyone is seeing this: no nurses, no therapists, no doctors for where you need them. And we're also seeing labor costs shoot through the roof, not just through inflation but through the scarcity of supply. And we're seeing that we don't actually have a health care system in the U.S. or globally. We have a sick care system where we wait until you're really sick and then we take care of you, with or without insurance, at an emergency room in a sick care system of a hospital or a high-intensity, high-cost environment. ResMed has north of 90% -- 95% of our revenues and profits outside the hospital. We think that's the future of health care. That's where we compete. That's where we win. And we think that's where most governments, most payer providers, most anybody who's looking at both the costs and management of the health care system, wants to move health care, is from the hospital and preferably to the home, definitely to a lower cost, lower acuity environment. So at ResMed, we transform the world with personalized, intelligent and life-saving therapy. And I'll show the data for that last statement. Our vision is actually to be a digital health concierge for the patient, an assistant that helps the patient get from sleep concerned consumer, "I might have a problem sleeping or breathing," through to, "I have a path to screening, to diagnostic, to prescription therapy," but most important to long-term management, lifetime management of a patient. We provide the highest efficacy at the lowest cost compared to all alternatives, including ones we've invested in or bought. We think there are some fantastic other therapies for sleep apnea, but you should start with the highest efficacy, the lowest cost, the lowest acuity first, and then work your way through. So we've invested in dental. We're investing in hypoglossal nerves. And we're investing in pharma, too. But we know the costs and we know the benefits of each. And we're investing across the spectrum. ResMed stands for respiratory medicine, not CPAP company, but it is the lowest cost and the most efficacious and so we always lead with that. While we're lowering the labor cost of setting up our therapy by 50%, we're also doing more than that. We're improving the efficiency for fixed health care systems, and we're driving adherence rates at the 90-day period, the 365 and 720 and beyond, higher and higher every day. We get up to 87% adherence on a device where you have to physically place this device on your face every night. That's higher than most pharmaceuticals achieved across the board, and we do it through digital engagement. I'll walk through some of our latest technologies on that. This slide shows our ecosystem at its highest level. This is where the 16 billion nights of medical data reside. But we put our digital health solutions into practice every day. We liberate their data to the cloud so that 7 million patients -- almost 6.9 million patients have downloaded our myAir app, and they can access their own data, personalized to them daily with the myAir score, and this is engaged with the same way a Fitbit is for daily exercise. And the Apple Watch and the Samsung and Fitbit themselves, now owned by Google, getting into sleep wellness and sleep architecture analysis is a huge -- I think it's a huge tidal wave of flow of patients that can come into our funnel as patients get to see -- well, consumers get to see these data before they're a patient. They get to see the data from their fitness app, their wellness app. They will start to recognize the signs and symptoms of this. And we're working with the big tech companies to turn that information they have in their supercomputers, the Samsung or the Apple phone or the watch, into actionable information that says, you have some risky breathing, you have some disturbed sleep, and here's a pathway to therapy. And ResMed's goal is to be there with the person as they walk through that. We have 25 million patient records in our Air Solutions system, and the physician and the provider can access that through our cloud-based system called AirView. But we also -- in the bottom right-hand corner of that cloud, we have 140 million patient care records for home medical equipment, for home health, for home nursing and beyond through brands like Brightree, MatrixCare and our latest acquisition, MEDIFOX DAN, in Germany. The bottom line is what we want to do is improve patient outcomes. We want to improve business process and clinical process efficiency. We want to lower costs to ultimately deliver the best health care at the lowest cost in the right environment. And I'll talk a little bit about our work in artificial intelligence and machine learning a little later, particularly some generative AI products that we've actually launched to market. So I've walked through some of these stats before. The one I'll focus on or the concept I'll focus on in this slide is interoperability. I see some folks in the audience who've run companies like Allscripts, and folks around the room, I know, David over there, took Cerner over to Oracle, and Judy at Epic. All of them talk about interoperability and all of them are credible at what they do in EMR and EHR records within the hospital system. But outside the hospital, it gets really, really dicey to find good data. ResMed is the global leader in starting to roll together outside hospital health care data. We've got 140 million patient records, but our goal around it is interoperability. On the bottom left of that screen, you see 125 API calls per second. That's engaging with Epic, with Cerner, with Allscripts, but it's also engaging with the National Health Service in Sweden or Finland or France, the NHS in the U.K., so that a physician can see the data in the system they're used to, where they're used to seeing it, how they're used to seeing it, combined with all the other data on that patient. And yes, we're going to get the ResMed brand there. We're going to get the myAir brand there, AirView brand there, but it's going to be data that can be actionable for the physician, and that's how they want it. By the way, the calls go both ways and the data comes back into our system, our ecosystem as well. So rather than do a video presentation and walk through a whole bunch of details on AI, I'm sure you've been overloaded by it in the conferences the last few months, I'll just focus on two examples of where we're using AI within ResMed's ecosystem and customer-facing ones. I'm not going to talk about the off-the-shelf stuff we're doing on supply chain and clinical outcomes that everyone is using. But the number one I want to talk about is provider outcomes, focused on an AI software product that we just launched into the U.S. market a couple of quarters ago. And it's called ComplianceCoach. And what it does is it helps the respiratory therapists, the sleep physician, the whole sleep management practice, to predict -- preemptively predict behavior of a patient, to focus their limited efforts with the labor costs or constraints in themselves, having no time left in the health care system, to deal with the highest impact opportunities that can deliver the best outcomes with the most at-risk patients. We're leveraging the learning over the ecosystem of 25 million patients. So everyone in this room is an individual, but you will have a lot of patterns. You will have a lot of patterns that you do and you behave by. And if we can predict those and find the patients that are highest at risk and get the efforts focused on them, whether it's a digital effort, a human effort or no effort, just that simple triage can save tens of millions of dollars for the health care ecosystem. And so we're at early stages of ComplianceCoach. But I can tell you the customers that have adopted it -- by the way, we're charging for this. It's Software-as-a-Service. It's one of the first SaaS plays within our core ResMed ecosystem. Obviously, we do that in Brightree, MatrixCare, MEDIFOX DAN. Their whole business is SaaS, but this is the first Software-as-a-Service in our core ecosystem. And I think it's doing incredibly well in the controlled product launch. We just went to Phase 2 on that. And actually, it's hard to keep up with the demand. And the beauty of this is it's not a physical product. I don't have to manufacture it, parts from Asia through a Singapore plant and ship it over or fly it over. This will scale at the speed of AWS and Microsoft Azure. The second example I want to talk about is patient outcomes. We have an in-market beta trial of a generative AI software product that acts as that digital patient concierge that I was talking about, digital consumer concierge. It helps a group of people we've identified and we call sleep concerned consumers, people who are engaged with looking at their sleep wellness data and are asking questions, whether it's to Google or to some other search engine or they're actively getting involved. And we help them find their way to Dawn. Dawn is the name that we gave to our generative AI product. And without going into too much detail, we'll help identify, engage and enroll millions of patients. We're test marketing this in Australia and New Zealand, but we think this could be something that could go to all 140 countries worldwide. It will help people on that path to better breathing, better sleep; help them find a path to screening, to diagnosis, to appropriate treatment, whether it's ours or a competing technology, and help them move in and out of the different technologies along their life journey, along their patient journey. And our goal is the best outcomes for the patient, the best treatment and the best long-term care. So watch this space. I think this is obviously moving faster in all industries. But as the market leader here, with $4 billion revenue, a $25 billion market, 16 billion nights of data, we believe we have really an obligation to be the leader in applying AI. We're not going to be the best at AI, but we're going to be the best at applying AI in the field of sleep medicine, respiratory medicine and residential care worldwide. So I'll spend just a couple of minutes on our latest platform, the AirSense 11. We're in tens of countries with this, but we sell in hundreds of countries. We're in 140 countries worldwide. And so the rollout of this has been slowed down a little because we launched during COVID and had some supply chain constraints that we all did on semiconductors and others. But I can tell you that this device is the smallest, quietest, most comfortable and most connected and most engaging therapy on the planet for sleep apnea. And that digital engagement is key. The only stat I'll draw your attention to on this slide is the sign-up for the app, the myAir. So what we're seeing in the AirSense 11 because it's got 2 [ icons ], it's got a digital screen and engage -- talks to the patient, engages with the patient, it encourages them to download the app, we get a 55% uptake of the patients on this using the myAir app. That compares to a 25% uptake on the AirSense 10. We look across med tech, getting 55% of patients to do anything in the channel, let alone download an app, put it on their phone and use it is incredible. And that's, I think, a factor that as we continue to launch AirSense 11 country by country and get that technology out there, that engaged technology, we're going to see more engagement of the patients in myAir. And what does that mean? Well, if the patients engage with this app that is coaching them, sending videos and it's personalized therapy and working how to best empower them to better sleep and better breathing, it means higher adherence. And there's not just a CEO saying this, I'll show you peer-review published data showing high adherence on myAir. And that leads to higher mask usage, and that leads to obviously better outcomes for the patient and for us. But it leads also to lower costs of the total health care system. And I'll talk about the dose response relationship between patient adherence and outcomes in a moment. So these are the data I was talking about. This is a peer-review published evidence, the N on this study is 85,000 in the bottom line and 42,000 patients on the top line there. But these are the largest published data to date on adherence. The baseline adherence on CPAP is around -- if you have an average model going through, an average provider, an average engagement with a clinician, you're going to get around 60% adherence. It's a pretty good therapy because of the symptomatic relief of sleepiness and moderation of symptoms. So 60% is sort of the baseline. But if you just add one thing, if you just have the physician use our cloud-based patient management system called AirView, that goes up to 70% adherence. Then if you just add one thing, that patient downloading that app, myAir, and engaging with that app, we're able to show up to 87% adherence to the patient at 90 days and maintaining. You can see it's actually increasing as it gets towards that 90 days. That's incredible, and it's market leading. But that also means that 13% of the patients aren't adherent and we have to help them find a path to dental sleep therapy in Western and Northern Europe where we make a product called Narval, or onto other therapies around the world, the substitute therapies that we all know about. And ResMed wants to be the concierge to help those 13%. But we also want to raise that 87% to 90%, 92%, 95%. There will be a limit. Not everybody is going to work with every therapy, but we think achieving that 87% adherence at this level is a great challenge to us to say what can we do more beyond that. And this is the only other peer-reviewed data I'll show from this, but this is the largest real-world data on CPAP mortality in sleep apnea. I used to be able to get up here and I would get close to saying CPAP is a case of life and death. But my lawyer, Dave Pendarvis, is in the front row so no, you don't. But now I'm -- well, Dave is not here, but he's on the golf course in Palm Desert. He retired. But my new lawyer, Michael, won't let me do that either until we had these data. This is N equals 176,000 patients. The p-value is less than 0.01. So I'm only 99% confident that CPAP is a case of life and death. This showed that within 3 years, the mortality difference is 39% on patients who are adherent to CPAP versus those who are not adherent. These were data across our ecosystem with the French publicly available information. So 39% increase in survival rate, it's pretty important to drive that adherence rate from 60% to 70% to 87%. For the doctor, for the patient, for the whole health care system, it's a case of life and death. In addition to being life and death, it's also economically valuable. There's actually a dose response relationship between every hour spent on CPAP treatment, if you're a sleep apnea patient versus not. And that dose response relationship is a 7% reduction in total health care costs for every hour on CPAP therapy. Now that limits out at 7 hours. You can't sleep for 12 hours and have 84% reduction in costs. But at 7 hours, it's 49%, 50% reduction in total health care system costs. And we've actually shown that. So it's not just use it, use it all night. And that's one of our biggest challenges, to drive that adherence rate up and make sure patients are engaging 365 days. So a topic that's obviously been incredibly prevalent across all of med tech, all of health care, has been the new GLP-1 class of medicines. And I do think this is another wave similar to the wave of high cholesterolemia drugs, of high blood pressure drugs. It will be a new class, like statins, like blood pressure meds, that will come to market over the coming decade. And obviously, we've had them in market for a decade in the first generation, and 2 or 3 years now of these latest generation GLP-1s. And there was a large correction on ResMed's share price in the last 6 months, and we really moved incredibly dramatically under an assumption of a bunch of myths. And I'll walk through some of the myths and how we're proving them wrong. But I think these data that we presented in our last earnings call were really to talk about, "Well, we're the world leader in this space. Let's get the epidemiology data that was peer reviewed and published in Lancet and which we worked on, and then let's take it forward a couple of decades and let's look at aging populations, growing populations. And then let's run some scenarios of different pharmaceutical impact scenarios." And we ran -- what's listed here is the high-impact scenario and just presented that. Today, the new part is we've got a mid-range scenario and the no-impact scenario. And if you ask me what I think the likely case scenario is, this shows a total available market in 2050 of somewhere between 1.2 billion and 1.4 billion. I would say the likely case scenario is actually between the blue and the red line. Somewhere in the sort of no real reduction -- I mean continued growth of the prevalence but just at a lower rate, in that sort of coming year period, and then moving up back in line with the rest of the lines here. So somewhere between the blue and the red, probably 1.35 billion patients. I think that's the most likely scenario given current adherence rates, costs and penetration rates of these pharma meds. But we put these three scenarios out there. And the whole point is there is no point on this curve -- and by the way, the line at the bottom is how many devices we have in market right now, 22.5 million cloud connected devices in market right now. And we grew that at 6% CAGR just to sort of keep in line with most of the sell-side models on the bottom. There is no point in any of those curves where the delta between our penetration and the total addressable market is less than 900 million patients in the high impact scenario. In the likely impact scenario, there's no point on any of the curves where it's less than 1 billion patients between what we've got treated and what's available. That's my whole point. This is an incredible market. Now I can see the skeptics in the room saying, "This is a static epidemiology model, what you need is the kinetics, right? Well, there'll be an air pocket. Will there be a change in the rate of growth in the short to medium term because of this?" And I'm going to address that in the next slide. But the bottom line here is there is a huge addressable market for ResMed now and over the next 3 decades and beyond. So this is my last slide on the clinical side, but I think this is really important. I've been challenged a lot to start putting out a whole bunch of information on GLP-1s, put out a whole pack, put out a whole bunch of information. I don't think so. I think we need to focus on science and real-world evidence and large Ns. So the N of this study is 529,000 patients. So we took 529,000 patients and looked at patients who are on GLP-1s, patients who are not on GLP-1s, and then overlap them, age, gender, complete match pair set, with our database and look longitudinally at these patients. So I want to address 3 myths on GLP-1. The first myth is that there will be less patients in the funnel, right? That's what the share price correction said. That's actually completely not true. We are seeing more patients in the funnel. People are being activated and engaged. You saw it in our last quarter's growth. I'm not here to talk -- I'm not going to preannounce December quarter or March or June, but you're going to see growth. More patients are coming into the funnel. So myth 1 is just untrue. There won't be less patients. There are more patients. Of the 1 billion I need to get to, a bunch of them are coming into these pills. They're seeing PCPs. If they have an AHI over 5 or 15 but no symptoms, they're getting a prescription. So there's more patients in the funnel. Myth number 2 is that the patients in the funnel are less likely to start CPAP, right? That was the myth. They're going to come in, but they're going to use it in GLP-1, they're not going to start CPAP. The purple square there, there's actually a 10% absolute higher start rate for a patient on a GLP-1 versus a patient not on a GLP-1 after that prescription is written. This is absolute. This is not relative. So if it was 70% of patients who got a script that showed up for that patient setup on the path in general market, it becomes 80% for a patient who's also on a GLP-1. So they're not only more in the system, they're more activated, they're more motivated and they used -- they start that path at a 10% higher rate, 1,000 basis points higher. The third myth, which is broken by the next 2 dot points there, is the myth 3 is that patients with the latest generation of GLP-1s will be more likely equipped to therapy than those not on GLP-1s. That's not true. These data, 529,000 patients, T equals 12 months, that 1-year post setup, they're 3% higher not just in adherence, in their resupply rates, that they actually order another mask and accessory. So if the average adherence -- again, if the average adherence rate and resupply rate was 70%, it's 3 absolute percentage points. It's 73% high. So 73% for a GLP-1 patient at that 12-month rate. And then, of course, at 24 months, it will get worse is the myth. No, it actually gets better. So if it was 75% on the general market, a patient using a GLP-1 latest gen is 75% adherence, 5% higher in terms of actually purchasing a mask, not just being adherent, but making that decision to purchase a mask. So what we've been saying is this isn't a headwind for us. We think it's a tailwind. I've got only 529,000 reasons of that. And by the way, we'll update this every quarter. It will be in the appendix on our quarterly updates in the epidemiology slide, and this T equals 0, T equals 12 months, T equals 24 months, to keep proving through science and data that we're actually seeing these class of drugs bring patients through. And just to cover the question before I get asked, 90% -- greater than 90% of these are the latest gen GLP-1s, so semaglutide and tirzepatide. I know we want to get to Q&A. This is my last slide. I think the financials I won't go through in detail because we'll be releasing those in a couple of weeks when we do our earnings call. But the bottom line is ResMed is positioned to win. We're the #1 provider. It doesn't give you the right to win, but it gives you a great starting point. We are growing the market. We're not going to accept single-digit growth for devices and high single digit -- mid-single-digit growth in devices and high single-digit growth in masks. Now that we're the market leader in all 140 countries, I have a very big incentive to start turning on the demand gen capabilities that we have through social media and other methods to get patients into the funnel. I think that the tidal wave of patients, the $1 trillion worth of market cap from these large pharmas coming in, is going to drive, for their own benefit, patients into the funnel, and we're going to be a big beneficiary of that. I think big tech coming in and putting sleep wellness across all their devices is going to drive patients into our funnel. But we're going to take it on our own to not only continue to drive with those big mega trends but also to capture that patient in our digital end-to-end ecosystem. And obviously, in the middle, we're driving digital innovation with a digital health leader in our space but we want to go beyond that. And the bottom line is we want to transform care, delivered preferably in the home but definitely in an out-of-hospital care setting, faster and better than anyone on the planet to drive better outcomes, lower costs and improve quality of life for the patients. So with that, I'll close with, in the last 12 months, we helped over 3 million people get a CPAP, an APAP, a bilevel or a ventilator. We helped over 25 million people get a full mask system, and we helped over 140 million people get a digital health solution for outside hospital care. And our goal is to grow that double digits, [ 24, 25 ], and help over 250 million lives in the year 2025. So with that, I'll hand back to Dave. We can -- I'll sit down here, we can do some questions.

Perfect. Great. Thanks, Mick. I might start with a couple of questions, and then we'll certainly throw it to the audience as well. So Mick, you've hit the GLP-1 question head on and with more data, and I think that will probably take us a little bit of time to digest. But just one question that you sort of addressed, but just to make it clear, the patients in that 0.5 million patient set, they're using the latest GLP-1s. Will that largely be diabetes patients then given obesity indications more recent?

Yes. So we've got -- look, my team who did this research didn't even want me to say greater than 90%, so I'm stretching the outlook, but we actually know exactly by drug what that is. Look, you guys know -- I mean, those of you who are following the pharma side, you guys know how many of those are in each of those classes and even the brand names of them. But yes, it's the Wegovys, it's the Mounjaros and all of the above, Ozempic and all of the above. It's the latest and greatest of all those. And look, as more varieties come to market, we're seeing more, we'll continue to track those data. I think the most important thing is people obviously bet last year this is a headwind. It's a tailwind, it really is, in terms of the patients coming in. And they're sticking on therapy and driving therapy more. And whether you're using it for diabetes or you're using it for a different indication, weight loss, it's still going to have the same effect of engaging you. And physiologically, it's the same chemical compound.

Okay. No, look, that is a great data set. And definitely, we'll look forward to those updates and probably something that I need to absorb a little bit. But one more question on GLP-1s before I let you move on. So we've got a pretty important clinical trial result coming probably this quarter, certainly this half. Does ResMed have expectations in that trial and what it will show?

Look, I think the investigators of that trial are the best to ask the question, but I mean, look, I've read the data that you have. We've run scenarios around it. I think what's programmed in there is 3 arms: a GLP-1 alone arm, a CPAP alone arm and a combination arm. I look to the primary investigator on -- one of the primary investigators on that is Professor Atul Malhotra from University of California, San Diego. And he was on a podcast recently with our Chief Medical Officer, and he was asked the question, "How do you think about weight loss treatment and CPAP treatment for sleep apnea? Is it A or is B?" And he sort of stepped back and said, "Why would you ask this question? I've been in this field for 30 years, and it's always been weight loss treatment and CPAP treatment for sleep apnea, A plus B." So there are 3 arms in that study: treatment A alone, treatment B alone and combination. It's pretty obvious that the best outcome is going to be a combination therapy, and it always has been. A physician -- before these drugs were available, diet exercise and sleep apnea, a 30% weight loss in the bariatric surgery; before that, it was 50% weight loss, patients still needing at 95% probability rates post bariatric surgery a positive airway pressure treatment. And the challenge is to make sure through that journey, patients are fully engaged in both there. And it's not just weight loss, it's diet. It's cardiovascular exercise. I mean if you take a pill that shrinks your stomach and you have a shot of bourbon and a bite of a burger, that's not good. And so it's really making sure that the diet, combined with the cardiovascular side, combined with the sleep apnea therapy and others, are going to be good. But what we're seeing is that these are bringing patients into the funnel. I really do hope the combination therapy is strong because that means a company with a market cap of $500 billion is going to be wanting to drive patients in for sleep apnea care and into the funnel. And yes, the likely case scenario is the combination therapy is the best. So they have an incentive not only to drive for their pill but then to say, "And while you're there, you should also get this because it will make your and my outcomes better." And a primary care physician is always going to follow the Hippocratic Oath or beyond to just do the right thing by the patient and make sure that if they have AHI north of 5 or north of 15, which vast majority of patients at the end of that study still will have an AHI above 5 and certainly 15 without symptoms, and they're going to need CPAP. And the combination therapy has been something we've done with pharma before, Lunesta, right? When a patient has insomnia, they're often prescribed a hypnotic like Lunesta or one of the other brand names out there. That's been used in combination with CPAP therapy for decades. And so it's not new to us. And I just think the myths turning them around to say headwinds are actually tailwinds is something that the market needs to catch up with where the science is, where we are and where the data are as we go forward.

Given we've hit that topic, there are questions in the audience, see if we could get a microphone. I'm going to get you -- wait for the microphone 1, 2, 3, please. Down the front here, please.

Yes. Let's do the GLP-1. More than 5,000 patients, you said 90% of them are on the newer GLP-1s. Did you see the difference if -- like separate the newer GLP-1s versus older GLP-1s, when they drive like more, I would say, patient adherence or patient awareness, do you see the difference between the older GLP-1 users and newer GLP-1 users?

Yes. So it was 529,000 patients, and it was more than 90% the latest generation. So I'm not sure -- we didn't do the breakdown analysis. I mean we all know the data that the older gen had less than like 10% or less weight reduction and the new gen are more like 10%, 20%, 30%. So my assumption would be the latest generation are the ones that drive more engagement and more adherence because the patient is actually getting a benefit. So I think the data will be stronger. We can absolutely look at that. But over time, I think the older gen will start to go down to be less and less a percentage of that pool and it will be more the patients on the latest gen. But what we are seeing is that these patients are far more engaged, and I think that will only increase with time as the drugs get better.

Mick, [ Cody ], I appreciate you being one of our biggest share leaders. I think sleep apnea is a huge issue. Reading between the lines, it sounds like you're alluding to possibly a focus on insomnia, digital therapeutics, maybe an end-to-end platform. Was that kind of the thought process in the Somnoware acquisition? Can you share a little bit more on the strategy behind it? And then I have a follow-up to that.

Yes. So the acquisition that's most applicable to our work in insomnia is actually Momentor, a company from Hildesheim in Germany. And so it was bunch of MD PhDs in the field of psychiatry/psychology who were treating insomnia through CBT Type 1 patient at a time, cognitive behavior therapy, and they're really successfully, actually so much better than, frankly, the hypnotics and other pharmaceutical therapies. And what they wanted to do is do it at scale. And so they wrote the software to do that. And so Momentor, the product is called Somnio. Somnio is available across Europe -- all across Germany, and it's part of DiGA, so it's government-driven. The government is actually paying for it already in market. We have to prove at month 24 the clinical and economic outcomes. And so we'll do that. And when we get that, we'll get clearance to then market across Germany. And we think that will expand across European Union. We're also doing a trial on the Somnio product in Australia and New Zealand. We just got clearance from TGA and we're going to do a trial through there where we've got an omnichannel market. And yes, we're going in as a pure play on treating insomnia as a psychologic neurological disease disorder. But then we're also looking at that overlap, obviously, with our core market and saying COMISA, co-morbid sleep apnea and insomnia, it's going to be of the 13% we can't quite get there, how many of them. It's the stress of the day. It's the standard insomnia, "I can't sleep" issue, combined with "I can't breathe" issue. And if you just treat the breathing and not the "I can't sleep" you're going to miss out on some. So I think there's an opportunity alone in sleep apnea, 800 million people. There's a big overlap with the 1 billion on OSA as well. But Somnoware can help us with that. Somnoware is more a patient management software for pulmonary and sleep physicians in the U.S. used by the VA and Kaiser and others. Incredible, it was moving upstream on that end-to-end digital concierge to help sort of the physicians a little bit further up the channel.