The COVID-19 pandemic has put immense pressure on the availability of ventilators in healthcare systems around the world. The virus, which is spread through droplets or contact, has been shown to manifest into serious respiratory problems.
Ventilators are used to pump oxygen into patients that require respiratory support. Currently, there is a combined capacity of 2,300 ventilators in intensive cares units across Australia. Hospital systems are looking to boost their stocks as they anticipate a surge in patients requiring respiratory support.
As a result, the federal government is looking to help boost the stocks of ventilators and are also considering converting sleep apnoea machines for use in the pandemic. Here are 2 ASX shares that are doing their best to ramp up production of ventilators to help the fight against coronavirus.
ResMed Inc (ASX: RMD)
ResMed is a global leader in respiratory medical devices, particularly targeted towards the treatment of sleep apnoea. The company has modified its manufacturing plant and sleep apnoea production lines in order to meet the demand for ventilators and face masks.
ResMed has already received an order from the government for 1,000 invasive ventilators and is aiming to triple its production of regular ventilators and increase the production of face masks tenfold. ResMed has already signalled a substantial jump in demand for ventilators, especially in South Korea and China, and is working closely with hospitals around the world.
The ResMed share price has bucked the overall volatility of financial markets and is currently trading 9% lower than its all-time highs.
Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)
Fisher & Paykel is one of the largest manufacturers and distributors of products used in respiratory care. The company has reported a significant increase in global demand for respiratory humidifiers and consumables directly used in treating patients with coronavirus. As a result, the company has increased in its manufacturing output in Auckland and Mexico.
Despite the Level 4 alert status in New Zealand, Fisher & Paykel has been designated as an essential service which will allow its operations in New Zealand to continue. Fisher & Paykel recently upgraded its full-year profit projections to between NZ$275 million and NZ$280 million, up from a range of NZ$260 million to NZ$270 million.
Should you buy?
In my opinion, it would be a good idea to keep an eye on the share price of both Fisher & Paykel and ResMed. Once market volatility subsides, it will be relatively strong stocks like these that will be the next market leaders.
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Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.