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ResMed Rises as Royal Philips Recalls Sleep Apnea Devices

Needham analyst Mike Matson, who has a buy rating and $229 price target on ResMed, says the company will be helped by a Royal Philips recall.
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ResMed  (RMD) - Get ResMed Inc. Report shares rose on Monday after a rival to the medical-device maker, Royal Philips, recalled 3.5 million ventilation devices for treating sleep apnea.

Needham analyst Mike Matson, who has a buy rating and a $229 price target on ResMed, said the recall would help ResMed, though the exact effect is hard to calculate, Bloomberg reports.

ResMed shares recently traded at $228.92, up 4.7%. The stock has surged 24% over the past three months.

Some patients using the Philips ventilators might shift to RMD while their products are getting repaired, Matson said. He added that the repairs will likely take at least several months.

Users with certain insurance can substitute a ResMed device for their Royal Philips device, if that device is older than five years, he said.

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In other health-care news Monday, ITeos Therapeutics  (ITOS) - Get ITEOS THERAPEUTICS, INC. Report shares leaped after the drug creator said GlaxoSmithKline GSK would pay up to $2.1 billion for it to develop cancer drugs.

The Cambridge, Mass., company and Glaxo unveiled a deal to co-develop and co-commercialize EOS-448, a monoclonal antibody in Phase 1 development as a potential treatment for patients with cancer.

Under terms of the deal, ITeos will receive $625 million up front. ITeos will then be eligible to receive as much as $1.45 billion in milestone payments.

Last week, analysts upgraded Biogen  (BIIB) - Get Biogen Inc. Report after the Food and Drug Administration's cleared its Alzheimer's treatment, aducanumab.

Bernstein’s Ronny Gal lifted his rating on the Cambridge, Mass., company to outperform from market perform. He set his price target at $500.