Inspire Medical Systems, Inc. · NYSE:INSP
Inspire Medical Systems — Investor Presentation (May 2020)
44 slides from Inspire Medical Systems's investor presentation, May 6, 2020
Slide 1: Inspire Medical Systems, Inc. May 2020
Inspire Medical Systems, Inc. May 2020 NYSE: INSP 1
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts are forward-looking statements. In some cases, you can identify forward-looking statements by terms su
Slide 3: 3 © Inspire Medical Systems, Inc. All Rights Reserved
3 © Inspire Medical Systems, Inc. All Rights Reserved
Slide 4: Current Impact of COVID-19 on Inspire Operations
Current Impact of COVID-19 on Inspire Operations . Q1 2020 revenue of $21.3M (31% growth over Q1 2019) was negatively impacted by the COVID-19 pandemic . Substantially all Inspire therapy procedures were postponed beginning the second week of March and numerous other cases, which received prior auth
Slide 5: Preparations for Post-COVID-19 Pandemic
Preparations for Post-COVID-19 Pandemic . Site Readiness . Maintain accurate list of all postponed cases and all approved cases . Establish Inspire as a priority procedure when scheduling restarts . OSA is disease state management and Inspire is an outpatient procedure . Surgeon payment increased an
Slide 6: Significant Business Progress Since IPO
Significant Business Progress Since IPO: Strong Foundation in Place to Drive Greater Penetration Broader . Continue to Increase Volume by Training and Opening New Centers Commercial . Drive Increased Utilization at Existing Centers Expansion Phase . Continue to Maintain High quality Patient Outcomes
Slide 7: Commercial Execution: Opportunity to Accelerate Interest and Conversions
Commercial Execution: Opportunity to Accelerate Interest and Conversions Our Direct-to-Patient Strategy Has Proven to Be Successful in Reaching and Educating Patients About Inspire Therapy… 1 Generating Interest 2 Qualifying Interest 3 Driving Conversion Selectively Expanding DTC Matching the Right
Slide 8: Inspire is an Innovative Neurostimulation Solution for Moderate to Severe OSA
Inspire is an Innovative Neurostimulation Solution for Moderate to Severe Obstructive Sleep Apnea (OSA) First and only FDA-approved neurostimulation Our History & Key Milestones technology for OSA 1990s: Medtronic (MDT) begins early work on the development of Inspire More than 8,200 patients tre
Slide 9: Strong Management Team
Strong Management Team Other Key Management Steve Jandrich Chief Compliance Officer & VP, Human Resources Andreas Henke SVP, European Operations Ivan Lubogo SVP, U.S. Sales Kathy Sherwood SVP, Global Market Access Martin Abrams VP, Marketing & Customer Experience Quan Ni, PhD VP, Research & Clinical
Slide 10: OSA is a Serious and Chronic Disease
OSA is a Serious and Chronic Disease OSA is Caused by a Blocked or Partially Blocked Airway • Blockage prevents airflow to the lungs • Results in repeated arousals and oxygen de-saturations • Severity of sleep apnea is measured by frequency of apnea or hypopnea events per hour, which is referred to
Slide 11: Current Treatment Options, Such as CPAP and Invasive Surgery, Have Significant Limitations
Current Treatment Options, Such as CPAP and Invasive Surgery, Have Significant Limitations Continuous Positive Airway Pressure (CPAP) is the Leading Therapy for OSA • Delivered through a mask that connects through a Drivers of Non-Compliance hose to a bedside air pump Mask Discomfort • Demonstrate
Slide 12: A Strong Market Opportunity Exists for an Alternative to CPAP
A Strong Market Opportunity Exists for an Alternative to CPAP that is Effective and Minimally Invasive Prevalence & Economic Costs Adults with Moderate to Severe OSA • Less: 65% CPAP Published literature Sleep apnea affects +100 million people Prescribed CPAP2 = Compliant estimates CPAP 1 worldwid
Slide 13: Inspire Therapy is a Proven Solution for Patients with OSA
Inspire Therapy is a Proven Solution for Patients with OSA Inspire System Inspire Procedure 3 Stimulation Lead 1 Pressure Sensing Lead Hypoglossal Nerve 2 Neurostimulator Remote control and three implantable components: Approximately a two-hour outpatient procedure Pressure sensing lead: detects w
Slide 14: Inspire Therapy is a Safe and Effective Solution
Inspire Therapy is a Safe and Effective Solution Mild Stimulation is a Clear Mechanism of Action Inspire Therapy Offers Significant Benefits Strong safety profile Effective and durable treatment Closed-loop system Strong patient compliance High patient satisfaction Minimally invasive out
Slide 15: Objective Measures Show the Impact of Inspire Therapy on OSA
Objective Measures Show the Impact of Inspire Therapy on OSA Polysomnogram Before and After Activation of Inspire System Inspire system turned on Airflow Breathing Oxygen Saturation OSA events No OSA events After activating the Inspire system, the patient exhibited a more regular breathing pattern,
Slide 16: Clinical Evidence
Clinical Evidence 16 © Inspire Medical Systems, Inc. All Rights Reserved
Slide 17: Significant Body of Clinical Evidence Evaluating Inspire in more than 2,100 Patients
Significant Body of Clinical Evidence Evaluating Inspire in more than 2,100 Patients, in 100+ papers Patients Clinical Studies Evaluated Stimulation Therapy for Apnea Reduction (STAR) 126 German Post-Market Study 60 ADHERE Patient Registry 1,017 Company Company Sponsored Pediatric / Down Syndrome 26
Slide 18: STAR Trial Met Both Primary Endpoints
STAR Trial Met Both Primary Endpoints & Showed Statistically Significant Reductions in AHI & ODI Significant Reduction in Severity of OSA Meaningful Levels of Compliance Post-Implantation Apnea-Hypopnea Index (Median) Oxygen Desaturation Index (ODI) (Median) 29.3 25.4 9.0 9.7 7.4 8.6 6.0 6.2 4.8 4.6
Slide 19: Additional STAR Findings Showed Meaningful Improvement in Quality of Life Metrics
Additional STAR Findings Showed Meaningful Improvement in Quality of Life Metrics Functional Outcomes of Sleep Questionnaire (Median) Epworth Sleepiness Scale (Median) Normalized daytime functioning = 17.9 11.0 Normalized daytime sleepiness = 10.0 18.2 18.4 18.8 18.7 14.6 6.0 6.0 6.0 6.0 Baseline 12
Slide 20: Summary of Inspire Clinical Studies
Summary of Inspire Clinical Studies German Post- ADHERE Patient TJUH and UPMC STAR Trial Market Study1 Registry1 Evaluation2 # of Inspire Patients 124 97 56 1,017 48 / 49 Time Following 12 5 Years 12 Months 12 Months 3 Months Implantation Months AHI – Baseline 29.3 29.3 28.6 32.8 35.9 / 35.3 AHI – T
Slide 21: Building the Depth of Clinical Data with ADHERE Patient Registry
We Intend to Continue to Build the Depth of Our Clinical Data with Our ADHERE Patient Registry ADHERE Patient Registry Our post-implantation study with the goal of collecting data on a group in excess of 5,000 patients Registry Results from 1,017 Patients Registry study designed to Apnea Hypopnea
Slide 22: Product and Indication Expansion
Product and Indication Expansion 22 © Inspire Medical Systems, Inc. All Rights Reserved
Slide 23: Continuous Product Development & Indication Expansion
We are Committed to Continuous Product Development & Indication Expansion Indication Expansion Product Pipeline Working with the FDA to expand indication in the 5th generation neurostimulator is in the development U.S. to patients as young as 13 years of age phase (including Down syndrome) Ins
Slide 24: Inspire Cloud: Longitudinal Care
Inspire Cloud: Longitudinal Care Longitudinal Care Care Team Inspire cloud Referral Network Inspire Cloud was launched at the AASM (American Academy of Sleep Medicine) annual meeting June 2018 ____________________ Not actual data; for illustrative purposes only. Monitors Adherence Strengthens th
Slide 25: Reimbursement
Reimbursement 25 © Inspire Medical Systems, Inc. All Rights Reserved
Slide 26: Focused on Coding, Payment, and Coverage
Our Team is Focused on All Aspects of Reimbursement, which Include Coding, Payment, and Coverage Coding Payment Coverage • Physician • Physician • Medicare • Facility • Facility • Commercial • Neurostimulator and stimulation • National Medicare average facility payment: • Over 430 commercial payors
Slide 27: Covered Lives Summary
Covered Lives Summary Positive BCBS Plans: 73M Total Covered Lives Large Insurance Plans • Wellmark • S. Carolina • Nebraska • Horizon • Idaho • Tennessee • United Healthcare: 41M • N. Carolina • Health Now NY • HCSC (Illinois, • Aetna: 22M • Premera • Federal Employee Plan Texas, etc.) • Regence •
Slide 28: Medicare Local Coverage Determination (LCD) Progress
Medicare Local Coverage Determination (LCD) Progress – All policy criteria consistent between MACs LCD Final LCD MAC Status Publication Noridian Final March 15, 2020 Novitas Final March 15, 2020 First Coast Final March 15, 2020 (Florida) National Govt. Services Final April 1, 2020 (NGS) Expected fin
Slide 29: Prior Authorization Metrics Improving with Positive Coverage Policy
The Prior Authorization Metrics are Steadfastly Improving with Every New Positive Coverage Policy Case-by-Case Submissions, Reviews & Approvals Process If denied If denied If denied Prepare/Submit an EMR Prepare/Submit an Prepare/Submit a 1st Prepare/Submit a 2nd appeal Prior Authorization level app
Slide 30: U.S. Commercial Prior Authorization Submissions
U.S. Commercial Prior Authorization Submissions • Steady increase in prior authorization submissions fueled Total Submissions by increased capacity, effective patient outreach 2020-Q1: 929 programs and reduction of fatigue/burden of obtaining 2019: 3,257 insurance approvals 2018: 2,477 • With positi
Slide 31: U.S. Commercial Prior Authorization Approvals
U.S. Commercial Prior Authorization Approvals • Continued increase in approvals per week as a result of Total Approvals positive coverage policies 2020-Q1: 761 • The median time to approval for 2019 submissions was 2019: 2,445 reduced to 25 days as compared to 90 days in 2018 2018: 1,230 • Majority
Slide 32: Commercial Development
Commercial Development 32 © Inspire Medical Systems, Inc. All Rights Reserved
Slide 33: Targeted Approach to Market Development and Patient Outreach
We have a Targeted Approach to Market Development and Patient Outreach Market Development Direct-to-Patient Outreach Machine Inspire has built a referral network with physicians across the treatment continuum Company Sponsored Public Relations Differentiated marketing engine capable of generatin
Slide 34: Sales Strategy Engages All Key Stakeholders
Our Sales Strategy Engages All Key Stakeholders Across the OSA Treatment Paradigm Holistic Approach to Engagement Across Key Stakeholders in the OSA Treatment Paradigm U.S. Sales Organization Sleep 82 Territories in U.S. and 8 in Europe Patients Centers Managed by 4 Area Vice-Presidents and 17 R
Slide 35: Keys To Driving a Strong Territory
Keys To Driving a Strong Territory Territory Manager Strategy New Centers and Territory Framing How TMs Spend their Time Leading with four Area Vice Presidents Building Regional Manager Team, increased to 17 in Q1 2020 FCRs to Support (added 3 in Q1 2020) Adding Field Clinical Reps (FCRs) to
Slide 36: The Great Balancing Act
The Great Balancing Act KEEPING CONTROL WHILE GROWING FAST Focus on the rapid scaling of commercialization while ensuring proper training to maintain control of high-quality therapy outcomes 36 © Inspire Medical Systems, Inc. All Rights Reserved
Slide 37: The Inspire Control System
The Inspire Control System Prevalence Pool 17M people in the U.S. with Incidence Pool OSA, of which 500k new End Goal: Strong ≈25% could be cases per year treated with who could be Patient Outcomes Inspire treated using Inspire Question 3: How Question 1: How Question 2: How Question 4: How Question
Slide 38: Financials
Financials 38 © Inspire Medical Systems, Inc. All Rights Reserved
Slide 39: Annual Revenue Growth
Annual Revenue Growth ($ in millions) $82.1 2016 – 2019 CAGR: 71.1% $50.6 $28.6 $16.4 2016 2017 2018 2019 Annual Gross Margin 76.2% 78.9% 80.1% 83.4% 39 © Inspire Medical Systems, Inc. All Rights Reserved
Slide 40: Quarterly Revenue
Quarterly Revenue ($ in Millions) $26.9 $20.9 $21.3 $18.0 $16.6 $16.3 $13.1 $10.9 $10.0 $10.0 $7.3 $6.0 $4.7 $5.2 $5.3 $3.0 $3.6 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 79% 69% 56% 91% 90% 81% 80% 66% 62% 65% 60% 62% 31% % YoY Revenue Growth 39 __________
Slide 41: Q1 2020 Performance
Q1 2020 Performance YoY Revenue ($ in millions) YoY Gross Margin YoY Growth: 31% YoY Increase: 220bps Territories EQ1 2020: 82 Q1 2020 Revenue Mix EQ1 2019: 53 $21.3 US OUS 84.6% 10% $16.3 90% 82.4% Q1 2019 Revenue Mix US OUS 12% 88% Q1 2019 Q1 2020 Q1 2019 Q1 2020 41 © Inspire Medical Systems, Inc.
Slide 42: Our Growth Strategies
Our Growth Strategies Ensure strong and consistent patient outcomes globally through planned and controlled expansion and robust physician training Promote awareness among patients, ENT physicians, sleep centers, and referring physicians Expand U.S. sales and marketing organization to drive ad
Slide 43: Significant First Mover Advantage
Our Innovative Inspire Solution has a Significant First Mover Advantage Inspire Therapy is Strongly Positioned FDA PMA approval since 2014 . More than 8,200 patients treated at over 375 medical Compelling Market centers across the U.S. and Europe Opportunity Significant payor experience . 165 mi
Slide 44: & Inspire
& Inspire Sleep Apne
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