Australia has a strong track record in successful medical devices, with the likes of implantable hearing devices pioneer Cochlear and sleep-breathing disorders combatant ResMed becoming worldwide household names. Like much of the human healthcare industry, it can be a frustrating place to invest, as companies grapple with bringing their products to market successfully, and then, negotiating the crucial aspect of who will pay for it. But here are three examples on the ASX that are making a good fist of establishing their respective devices in world markets.
- SomnoMed (SOM, 74 cents)
Market capitalisation: $161 million
1-year total return: 74.1%
3-year total return: –8.6% a year
Analysts’ consensus price target: 99.5 cents (Stock Doctor, three analysts)
Sleep device maker SomnoMed provides treatment solutions for sleep-related breathing disorders including obstructive sleep apnoea (OSA), snoring and bruxism (teeth grinding). OSA is, of course, also the province of the highly successful ResMed – one of the Australian Securities Exchange’s (ASX’s) true global leaders – but SomnoMed believes it can differentiate itself from ResMed, primarily because its flagship product range, SomnoDent, involves a custom-fitted, comfortable oral device worn at night to treat mild to moderate OSA, that does not require a mask or tubing, is not fitted to a device, and does not make any noise. Instead, it resembles a sports mouthguard and is made precisely to fit the patient’s mouth shape and their teeth.
SomnoMed calls its system continuous open airway therapy (COAT). It is designed to keep the patient’s airway open by holding their lower jaw forward; it fits over the upper and lower teeth. It is comfortable, discreet and easy to use: SomnoMed says most patients have no problem wearing COAT all night every night.
In the first place, SomnoMed is targeting patients who can’t – or won’t – use the continuous positive airway pressure (CPAP) devices made by ResMed and others. SomnoMed is the world leader in oral appliances, which it says many OSA patients find more comfortable and less invasive.
OSA is a major medical problem: it is considered an under-diagnosed and modifiable cause of hypertension. More than one billion people around the world experience OSA, according to the National Centre of Biotechnology Information in the USA. SomnoMed says the global addressable market for OSA is worth $7 billion–$8 billion a year and is growing at a rate of 6%–8% a year.
Last year, SomnoMed launched Rest Assure, its first ever inbuilt technology-enabled oral appliance. Rest Assure has the potential to be a transformative product for SomnoMed, enabling inbuilt compliance and efficacy monitoring, and allowing personalised treatment data to be shared confidentially between clinicians and patients. While this technology is standard in the CPAP space, it has not been implemented in an oral appliance before.
Rest Assure was cleared by the US Food and Drug Administration (FDA) in October 2024 for compliance tracking; work is now underway for a US-based clinical trial in FY26 to support a planned FDA 510K submission for efficacy monitoring. A 510(k) is a pre-market submission made to the FDA to demonstrate that the device to be marketed is as safe and effective as a legally marketed device. SomnoMed expects that over time, the data collected by Rest Assure will demonstrate and establish the equivalent clinical effectiveness of COAT therapy and CPAP, driving prescriptions, increased reimbursement (where private insurance plans or government programs pay for medical services to patients) and ultimately, greater therapy market share for COAT among the large global population of patients suffering from sleep apnoea.
SomnoMed performed strongly in FY25, generating more than $100 million in revenue for the first time: revenue rose by 21.6%, to $111.5 million; underlying earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $9.2 million, ahead of the company’s guidance range of $7 million–$9 million; and underlying net profit was $2.5 million. Margins expanded to 8.2% (from 0.6% in FY24) as operating leverage flowed through, with profitability boosted as sales grow beyond a certain point.
There is risk around new product regulatory approvals, but broker Morgans – in the most up-to-date analyst report, released after the annual report – describes SOM as undervalued, even against its conservative assumptions.
- Nova Eye Medical (EYE, 14.2 cents)
Market capitalisation: $40 million
1-year total return: –23.2%
3-year total return: –15.3% a year
Analysts’ consensus price target: 50 cents (Stock Doctor, two analysts)
Adelaide-based Nova Eye Medical has brought to the market a comprehensive portfolio of novel glaucoma treatment options that span the entire disease process – enabling physicians to intervene earlier, and more often, in the treatment of glaucoma, a progressive disease that causes damage to the optic nerve. If not treated, glaucoma leads to gradual, irreversible vision loss and blindness.
Nova Eye Medical’s proprietary iTrack technology has been used to treat more than 100,000 patients globally. The original product was the original iTrack microcatheter, a device for performing canaloplasty, a minimally invasive (stent-free and tissue-sparing) surgical treatment for glaucoma that was introduced in 2008. The original iTrack was a pioneering tool for canal surgery, which involves clearing blockages in the eye’s drainage canal to reduce intraocular pressure (IOP) – the key factor in glaucoma.
If the eye’s drainage canal (Schlemm’s canal) becomes blocked, too much fluid stays in the eye and IOP rises. High IOP damages the optic nerve, leading to blindness. Typically, initial treatment for glaucoma involves eye drops or laser therapy; if these options become inadequate or unsuitable, glaucoma surgery may become necessary.
The iTrack was designed to treat glaucoma by using canaloplasty – a non-penetrating glaucoma surgery – to clear blockages in the Schlemm’s canal, the eye’s natural outflow pathway. Canaloplasty uses a microcatheter to dilate Schlemm’s canal and tissue called the trabecular meshwork to restore natural fluid outflow from the eye, lowering IOP.
NovaEye’s technology was later advanced into the iTrack Advance, which the company describes as a more user-friendly and surgically efficient version for both glaucoma and cataract surgeons. The device has an illuminated fibre optic tip and is designed to improve the efficacy of canaloplasty surgery in treating glaucoma; it can be used by ophthalmologists, a large new market, as well as cataract surgeons. The consumable iTrack Advance was launched in June 2022, with its first shipments to surgeons in Australia and Europe, followed by US FDA clearance and a broader US launch in 2023.
In FY25, Nova Eye’s iTrack sales grew in all regions: up 26% in the USA, up 17% in Germany (the company’s key European market), up 17% in China and up 14% in the rest of the world. Total sales rose 23% in US$ terms, to $18.8 million, meeting the company’s guidance. In the US market, Nova Eye notched its six consecutive half-year of sales growth: 76% of sales come from the US, with 10% from Germany, 6% from China and 7.5% from the rest of the world. Group earnings before interest, tax, depreciation and amortisation (EBITDA) was a loss of $3.5 million, and the net loss came in at $9.1 million; but the gross margin improved from 66% in the first half of FY25 to 70% in the second half, due to process improvements.
Nova Eye made an EBITDA improvement of US$2.1 million in the second half compared the with first six months of FY25. The company is still in a situation of cash outflow from operations, but in FY25 this was $6.2 million, down 21.5% on the $7.9 millions of outflow in FY24. Nova Eye’s cash in the bank was $5.1 million at 30 June 2025. The financial situation is improving, but Nova Eye is still short of profitability; the company has told shareholders it expects to break even at EBITDA level in the first half of FY26 (the six months to December 2025). Full-year FY26 sales revenue (excluding China) is expected to be in a range between US$21 million and US$24 million ($32 million to $37 million at current exchange rates).
Nova Eye is a speculative situation, but it is performing solidly in its key market, the USA, and the handful of analysts that follow the company are very bullish on the stock.
ImpediMed (IPD, 3.8 cents)
Market capitalisation: $77 million
1-year total return: –26.9%
3-year total return: –15.1% a year
Analysts’ consensus price target: 12 cents (Stock Doctor, four analysts)
Brisbane-based ImpediMed has brought some world-class technology to the market. ImpediMed’s bio-impedance spectroscopy (BIS) devices non-invasively measure a patient’s total body water and extracellular and intracellular fluid volumes – and tissue composition – to help doctors assess and treat chronic diseases. Fluid imbalance has significant clinical implications, and detailed knowledge of fluid levels can tell doctors a great deal, and quickly; the BIS measurement takes less than 30 seconds.
The flagship product is the SOZO digital health platform, which uses BIS technology to measure 256 unique data points over a wide spectrum of frequencies from 3 kHz to 1000 kHz. SOZO – which can be assessed remotely – allows doctors to easily and accurately assess changes in a patient’s condition, get earlier diagnoses, alert them to the need for intervention, through a non-invasive test. It is a software-as-a-service (SaaS) product, which generates ongoing revenue from subscribers.
ImpediMed’s main focus so far has been on lymphoedema (limb swelling caused by a lymphatic system blockage, most commonly due to cancer treatment, in particular, breast cancer), and heart failure.
In lymphoedema, ImpediMed has developed the proprietary L-Dex (Lymphoedema Index), which uses SOZO to compare extracellular fluid in the limbs, to indicate changes in fluid balance, and compare an at-risk limb to a healthy limb. This information gives doctors the patient’s L-Dex score, changes in which can give data for the early detection and management of breast cancer-related lymphoedema (BCRL). If detected, the progression of lymphoedema can be prevented – or even reversed, by wearing a compression sleeve. If not treated, it can become an irreversible, life-long debilitating condition that gets progressively worse. Early detection of lymphoedema using SOZO allows early treatment, which prevents progression to serious disease.
Not so long ago, doctors used a tape measure to measure the swelling; optical scanning has improved the diagnostic capability, but even it is a long way short of SOZO’s capability. ImpediMed offers the only technology using BIS to be cleared by the US FDA and CE-Marked for Europe (and Australian Register of Therapeutic Goods, or ARTG-listed for sale in Australia), enabling the company to legitimately position it as the standard of care for the early detection and management of BCRL, with improved breast cancer survivorship.
Similarly, SOZO fluid analysis for heart failure provides an objective measure of fluid overload in heart failure patients. It uses ImpediMed’s HF-Dex heart failure index which is a measure of extracellular fluid as a percent of total body water: the reading is analysed against guidelines and the appropriate fluid volume found in healthy people. HF-Dex also includes an assessment for patients with end-stage renal disease (ESRD).
ImpediMed has outlined expansion areas for the technology that include protein calorie malnutrition, oncology and clinically managed weight loss – these indications add to IPD’s confidence in the SOZO platform as a new ‘standard of care.’
ImpediMed has a lot going for it in terms of positive global clinical trial data, and widespread and increasing payor coverage in the US – where private insurance plans or government programs pay for medical services to patients – and sales of actual devices. The crucial statistic is growth of the SOZO installed base in the US. In the fourth quarter of FY25, 44 units were sold, boosted by a contract for nine units with Legacy Health, a six-hospital US health system: that brought the total units in the field to 1,139 (583 units in the US and 556 in the rest of the world.) In the US, the installed base grew by 115 units in FY25: broker Morgans expects 210 units to be sold in the current financial year.
ImpediMed is not yet profitable, but the company has told the market it expects to achieve cashflow breakeven in FY27. IPD has been a frustration for investors for quite some time, but analysts that follow the company think it looks to be good buying at this share price, on the back of growing sales and market acceptance. Morgans is the most bullish broking firm on the stock, with a price target of 14 cents.
