Why a Pair of Eli Lilly Clinical Trials Sent ResMed Stock Tumbling [Video]

Shares of medical device maker ResMed (RMD) are tumbling in intraday trading Monday as markets react to a pair of Phase 3 clinical trials from drugmaker Eli Lilly (LLY) released Friday that could have an impact on ResMed’s future business.

Friday afternoon, Eli Lilly released data from two clinical studies that showed the capability of one of the company’s popular weight-loss drugs, Zepbound, to reduce the severity of sleep apnea without the need for a mask that is typically used to treat the disease.

Sleep apnea is ResMed’s primary area of treatment, according to its own earnings materials. The company sells medical devices like sleep apnea masks, and generated about $1.2 billion in revenue, mostly from device sales, in its most recent quarter.

ResMed said in its most recent earnings report that its data shows a positive correlation between patients who already use a GLP-1 weight-loss drug, like Zepbound or Novo Nordisk’s (NVO) Ozempic, …