Jefferies Drops Price Target After ResMed (RMD) Heart Failure Trial Fails

Jefferies maintains a Hold rating on ResMed (NYSE: RMD), and lowered the price target to $52.00 (from $65.00), following SERVE Heart Failure trial. Analyst Raj Denhoy said that the trial showed an increase in cardiovascular mortality in low EF heart failure patients. "The finding all but ends the pursuit of HF as an indication for the technology and scuttles what had been a significant pipeline opportunity."

Denhoy commented on RMD, saying, "The unexpected result of the SERVE HF trial—that treatment with ASV showed no overall impact on overall mortality or hospitalization for heart failure and actually led to a statistically significant increase in cardiovascular mortality—all but sinks Resmed’s plans in this indication. Heart failure was the nearest and largest of the company’s next wave of opportunities: we had estimated the market at over 1mn patients in the US alone. The company could still try to carve out a niche in ejection fraction preserved HF patients (and these are being studies in the smaller CAT HF study) though the opportunity might not support the investment required and with the negative SERVE data, we think HF is likely over for RMD."

For an analyst ratings summary and ratings history on ResMed click here. For more ratings news on ResMed click here.

Shares of ResMed closed at $55.48 yesterday.

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