In 1981 Professor Colin Sullivan and colleagues at the University of Sydney described and developed nasal continuous positive airway pressure (CPAP), the first successful, noninvasive treatment for obstructive sleep apnea (OSA).
After publication of the initial successful results in Lancet, Sullivan, who had patented the technology, attempted to find a compatible partner to help commercialize the sleep technology. In 1986, Chris Lynch, who was then working with Dr. Peter Farrell, who was Managing Director of the Baxter Centre for Medical Research and also Vice President of R&D for Baxter Healthcare, Japan, met with Sullivan and recommended that Peter also meet with him to hear his story. The result was that in 1987 Farrell, on behalf of Baxter, invested in Sullivan’s technology to further evolve the prototype and subsequently undertake clinical trials of the CPAP device on a group of patients with severe sleep apnea.
In 1988, for a variety of reasons, Baxter decided not to enter the sleep apnea market and in 1989 Dr. Farrell founded ResMed in order to affect a management buyout of the Sullivan sleep technology from Baxter. After the MBO was completed ResMed proceeded to commercialize Sullivan’s prototype CPAP device to allow scalable device production and, therefore, effectively treat a critical mass of patients with OSA, the major manifestation of sleep-disordered breathing (SDB).
From its early operations, in late 1989, ResMed grew dramatically during the next 25 years. Revenues for the first fiscal year in 1990 were less than $1 million and there were only 9 employees. As of December 2014, RMD employs well over 4000 people globally, operates in 100 countries, has revenues of approximately $1.6 billion and the current market capitalization for RMD on the New York Stock Exchange is close to $7.5 billion.