SomnoMed hits high gear, sales records for sleep apnea appliances

SomnoMed (ASX:SOM) shares have surged after breaking sales records for its sleep apnea products in the North America, Europe and APAC/Japan regions during the 2013/14 financial year.

It also expects further acceleration of its growth during the 2014/15 financial year.

Shares in the company had hit an intra-day high of $1.84, up 15% from its close of $1.60 on 22 July 2014 and a fresh 12 month high.

Sales in the fourth quarter reached 11,973 units, the highest unit sales in the company's history.

Other records were set in all regions during the quarter.

For the first time North America reached 6,400 units in a three month period and set a new record, with sales of over 2,300 units in a single month; Europe exceeded quarterly sales of 4,300 for the first time and APAC/Japan sold over 1,250 units in a quarter for the first time.

Analysis

SomnoMed's results are an affirmation, if needed of the fast growth path ahead for the company in 2014/15.

We believe this is just the start for its oral devices given advantages over CPAP.

SomnoMed's oral appliance therapy for obstructive sleep apnea will snowball revenues.

Its products offer improvements over existing devices and a greater level of patient comfort which is one of the key aspects of treatment of sleep apnea.

Proactive Investors re-affirms our share price target guidance of $2.05 to $2.19 within 6-9 months.

The share price was $1.45 when we calculated our price target, it is currently trading $1.82.