Peter Farrell, founder and executive chairman of ResMed, joined a short and storied list Wednesday as the 12th person inducted into Connect’s Entrepreneur Hall of Fame.
Farrell, who founded the sleep-disordered breathing medical device company in 1989 and grew it to the $6.5 billion market cap it has today, took the honor in stride, giving much of the credit to his colleagues and employees.
“Clearly, 85 percent of a business is the people, and I’m standing up here representing a wonderful team of people,” he said at the luncheon presentation at Estancia La Jolla. “People of integrity, intelligence, energy — it’s been a real pleasure to work with them.”
Geni Cavitt, San Diego media personality and former San Diego Council District 7 director of communications, served as interviewer, and said what many of the more than 300 in the room already knew — Farrell created not only a device, but an entire industry.
“People have told me today that you’re probably the only one they know who created a disease,” Cavitt said jokingly.
While Farrell created and brought to market a useable device to treat sleep apnea, a little-discussed condition before the start of ResMed (NYSE: RMD), he made it clear that the original premise wasn’t his. He recounted his introduction to sleep breathing disorders and their very early solution from Colin Sullivan of the University of Sydney Medical School in Farrell’s native Australia.
Farrell met Sullivan in June 1986 to learn about the man who was “treating snoring sickness with a reverse vacuum cleaner.” He said he remembered watching a video of a man sleeping and having apnea episodes, and could see his blood pressure and heart rate sharply drop with each one.
“[Sullivan] said to me ‘Do you think that’s good for him?’ And I said ‘Well, Colin, why don’t you move to the next question,’” Farrell said. “So then he stuck a Darth Vader mask over the guy connected to an Hitachi blower which he sourced in Japan — you could have run your swimming pool on it — and it sounded like a freight train. And I said ‘What’s going on here?’ And he said ‘We’re taking room temperature air, we’ve got a filter to keep out the cockroaches, and we bring the air in and send it up through this tube — there was a big tube that looked like an inverted toilet seat.”
Farrell said he wasn’t sold on the concept until Sullivan told him he suspected 2 percent of the population suffered from such sleep disorders.
“I was coming from Baxter, where the prevalence of kidney disease was roughly, give or take, 0.2 percent, and we had a billion-dollar business,” Farrell said. “Well, as an MIT-educated engineer, I went — ‘That’s $10 billion!’”
After Baxter took too long to capitalize on the concept, which they had invested in after Farrell’s realization, Farrell and a few others scraped together $2 million to buy it back from Baxter, and eventually ResMed was born.
Though he takes pride in his professional accomplishments, of which there are many, Farrell is also well known for his philanthropic work through the Farrell Family Foundation, but said he is most proud of his three children. One of his sons, Mick, took over as CEO of ResMed in March.
“I’m proud of them,” Farrell said. “They’re on their own; they’ve got nice families, so I guess if I had to put one stake in the ground that’d be it.”
Past Connect Entrepreneur Hall of Fame honorees are Irwin Jacobs, Walter Zable, Ivor Royston, William Rastetter, J. Robert Beyster, Neal Blue, Linden Blue, Peter Preuss, Gene Ray, Howard “Ted” Greene and Ron Taylor.
9001 Spectrum Center Blvd.
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|10/15/2015||Farrell, Michael J||5,975||Sell||$330,716|
|10/15/2015||Farrell, Michael J||5,975||Exchange||$92,732|
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