Inspire Medical Systems, Inc. · NYSE:INSP

Inspire Medical Systems — Investor Presentation (January 2021)

49 slides from Inspire Medical Systems's investor presentation, Jan 7, 2021

  1. Slide 1: Inspire Medical Systems, Inc. January 2021

    1 Inspire Medical Systems, Inc. January 2021 NYSE: INSP

  2. Slide 2: Disclaimer

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL 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 statemen

  3. Slide 3: INSPIRE

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL 3

  4. Slide 4: Focus on a Strong Start to 2021

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Focus on a Strong Start to 2021!!!  Q4 and full-year 2020 numbers in audit, did not see a significant impact from COVID and no change to previously announced guidance (Earnings call will be on Tuesday, February 23, 2021 whereb

  5. Slide 5: We continue to closely monitor COVID-19

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL We continue to closely monitor COVID-19 including the increases over the holiday season: We have experienced cancelations or delays in cases in 2021 in select states (Northeast and Southeast), but do not currently see signifi

  6. Slide 6: Significant Business Progress Since IPO

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Significant Business Progress Since IPO: Strong Foundation in Place to Drive Greater Penetration Clinical Phase Regulatory Phase Reimbursement Phase 1 Broader Commercial Expansion Phase  PMA approval from the FDA in 2014  Cli

  7. Slide 7: Commercial Execution: Opportunity to Accelerate Interest and Conversions

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Qualifying Interest Driving ConversionGenerating Interest Selectively Expanding DTC Advertising 2.3 4.5 2018 2019 Commercial Execution: Opportunity to Accelerate Interest and Conversions Our Direct-to-Patient Strategy Has Prove

  8. Slide 8: Inspire is an Innovative Neurostimulation Solution for Moderate to Severe OSA

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Inspire is an Innovative Neurostimulation Solution for Moderate to Severe Obstructive Sleep Apnea (OSA)  First and only FDA-approved neurostimulation technology for OSA More than 10,500 patients treated with Inspire therapy 

  9. Slide 9: Strong Management Team

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Strong Management Team Tim Herbert President, CEO & Founder  30+ Years of Experience Rick Buchholz Chief Financial Officer  25+ Years of Experience Randy Ban Chief Commercial Officer  25+ Years of Experience Phil Ebeling Chi

  10. Slide 10: OSA is a Serious and Chronic Disease

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL 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

  11. Slide 11: Current Treatment Options Have Significant Limitations

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Current Treatment Options, Such as CPAP and Invasive Surgery, Have Significant Limitations Ina Uvulopalatopharyngoplasty (UPPP) Maxillomandibular Advancement (MMA) • Several variations of sleep surgery • Success rates vary wide

  12. Slide 12: A Strong Market Opportunity Exists for an Alternative to CPAP

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL A Strong Market Opportunity Exists for an Alternative to CPAP that is Effective and Minimally Invasive  Sleep apnea affects +100 million people worldwide1  Approximately 17 million individuals in the U.S. with moderate to sev

  13. Slide 13: Inspire Therapy is a Proven Solution for Patients with OSA

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Inspire Therapy is a Proven Solution for Patients with OSA Inspire System 1 2 3 Inspire Procedure  Approximately a two-hour outpatient procedure  Requires three small incisions  Patients typically recover quickly and resume

  14. Slide 14: Inspire Therapy is a Safe and Effective Solution

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Inspire Therapy is a Safe and Effective Solution Mild Stimulation is a Clear Mechanism of Action  Strong safety profile  Effective and durable treatment  Closed-loop system  Strong patient compliance  High patient satisfac

  15. Slide 15: Objective Measures Show the Impact of Inspire Therapy on OSA

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Objective Measures Show the Impact of Inspire Therapy on OSA Inspire system turned on Airflow Breathing Oxygen Saturation No OSA eventsOSA events Polysomnogram Before and After Activation of Inspire System After activating the

  16. Slide 16: Clinical Evidence

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Clinical Evidence 16

  17. Slide 17: Significant Body of Clinical Evidence

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Significant Body of Clinical Evidence Evaluating Inspire in more than 2,100 Patients, in 100+ papers 1. Due to the inclusion of certain patients in multiple studies, some studies are not shown in the table because they do not a

  18. Slide 18: STAR Trial Met Both Primary Endpoints

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL STAR Trial Met Both Primary Endpoints & Showed Statistically Significant Reductions in AHI & ODI Significant Reduction in Severity of OSA Apnea-Hypopnea Index (Median) 29.3 9.0 9.7 6.0 6.2 Baseline N=126 12 Month N=124 18 Month

  19. Slide 19: Additional STAR Findings Showed Meaningful Improvement in Quality of Life

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL 30% 5% 4% 3% 1% Baseline N=108 12 Mo. N=103 18 Mo. N=103 3 Yr. N=100 5 Yr. N=80 17% 86% 87% 81% 90% Baseline N=108 12 Mo. N=103 18 Mo. N=103 3 Yr. N=100 5 Yr. N=80 Additional STAR Findings Showed Meaningful Improvement in Quali

  20. Slide 20: Summary of Inspire Clinical Studies

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Summary of Inspire Clinical Studies STAR Trial German Post-Market Study1 ADHERE Patient Registry1 TJUH and UPMC Evaluation2 # of Inspire Patients 124 97 56 1,017 48 / 49 Time Following Implantation 12 Months 5 Years 12 Months 1

  21. Slide 21: ADHERE Patient Registry

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL We Intend to Continue to Build the Depth of Our Clinical Data with Our ADHERE Patient Registry Registry Results from 1,017 Patients  Registry study designed to be retrospective and prospective  51 centers are involved in regi

  22. Slide 22: Reimbursement

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Reimbursement 22

  23. Slide 23: AMA Grants Approval for New, Category I Procedure Codes

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL AMA Grants Approval for New, Category I Procedure Codes • Hypoglossal Nerve Stim will no longer share Procedure Codes with Vagus Nerve Stim for Epilepsy • No more ‘New Technology’ Cat III codes for Inspire (T-Codes) effective J

  24. Slide 24: Covered Lives Summary

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Covered Lives Summary Large Insurance Plans • United Healthcare: 41M • Aetna: 22M • Humana: 17M • Cigna: 16M • Anthem: 40M – continue to obtain individual prior auth approvals Positive BCBS Plans: 82M Total Covered Lives • Well

  25. Slide 25: Medicare Local Coverage Determination Completed and In-Place

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Medicare Local Coverage Determination (LCD) Completed and In-Place - All coverage criteria consistent in all 50 states MAC Final LCD Publication Date Noridian March 15, 2020 Novitas March 15, 2020 First Coast (Florida) March 15

  26. Slide 26: Prior Authorization Process and Approval Track Record

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL If Denied Prepare/Submit a Prior Authorization If Denied Prepare/Submit a 1st level appeal If Denied Prepare/Submit a 2nd level appeal Prepare/Submit an EMR appeal (External Medical Review) 97% 2% 1% Approved Denied at EMR Dism

  27. Slide 27: U.S. Commercial Prior Authorization Submissions

    16 21 20 17 21 23 34 38 43 48 51 49 56 57 62 76 71 44 95 209 268 258 225 270 303 445 488 558 619 661 639 722 735 812 988 929 566 1,233 - 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 1,300 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q

  28. Slide 28: U.S. Commercial Prior Authorization Approvals

    U.S. Commercial Prior Authorization Approvals Q ua rt er ly T ot al A pp ro va ls Q ua rt er ly W ee kl y A ve ra ge A pp ro va ls 5 7 6 8 10 10 10 15 16 19 29 30 34 45 52 58 59 42 80 59 96 72 103 126 133 134 190 213 249 373 395 443 579 672 751 761 541 1,039 0 200 400 600 800 1,000 Q1'16 Q2'16 Q3'16

  29. Slide 29: Product Development and Digital Health

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Product Development and Digital Health 29

  30. Slide 30: Inspire Digital Health Definition

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Inspire Digital Health Definition Connected tools for Sleep Docs, Surgeons, and Patients that improve outcomes and reduce work. • Collaborative patient screening • Seamless, personalized care • Efficient therapy management 30

  31. Slide 31: Foundational Customer Needs

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Foundational Customer Needs Opportunities to Create Brand Preference 31 ENT Surgeon • Strong, Predictable Patient Outcomes • Speed and Ease of Implant Procedure • Strong, Predictable Patient Outcomes • Speed and Ease of Patient

  32. Slide 32: There are 6,000 Board Certified Sleep MDs in the US

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL There are 6,000 Board Certified Sleep MDs in the US Over 90% are aware of Inspire Less than 40% are currently referring for Inspire Training Age Practice Management & Mindset 63% Internal Medicine / Pulmonary 25% Psychology / N

  33. Slide 33: What they think about CPAP and Inspire

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL What they think about CPAP What they think about Inspire Patient Treated OSA Perceived to be: • Invasive • Costly • Complex Sleep MDs Need Familiarity/Confidence in the Therapy Pathway Insurance Procedure Programming Etc. 33

  34. Slide 34: CPAP History: A proven model

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL CPAP History: A proven model CPAP Invented Game changing new therapy Increased Comfort First nasal pillow Ease of Use Integrated humidifier Auto Adjusting First Auto PAP Smart, connected CPAP Anytime adherence & efficacy Remote

  35. Slide 35: 2021 Inspire System

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL 2021 Inspire System Bluetooth USB: flash drive Hospital PC or Web Browser Inductive Telemetry Bluetooth Inspire Cloud Internet Mobile App Sleep Diagnostic Cloud Sleep Diagnostic Device 35

  36. Slide 36: Digital Pipeline

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL 2020 Q2 Q3 Q4 2021 Q2 Q3 Digital Pipeline 2020/2021 2020/2021 • Patient education tracking • Collaborative patient screening • Virtual patient check-in 2021 • Digital monitoring of usage • Browser-base interface • Possible inte

  37. Slide 37: Our Framework For Center Development

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Our Framework For Center Development 37

  38. Slide 38: Market Development

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Market Development Direct-to-Patient Channels / Self-Referred Inspire Program Core Team Sleep Practice Refer and Manage Sleep Practice Referrals Dental Practice Referrals Cardiac Practice / EP1 Referrals Direct-to-Patient Outre

  39. Slide 39: DTC Program: Strategic Pillars

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL DTC Program: Strategic Pillars #3: Convert to Appointment #1: Drive Efficient Awareness #2: Educate & Segment IS.com #4: Convert Appointment to Implant Paid Media • Breakthrough Content • Playbook Testing Customized journeys “G

  40. Slide 40: Advisor Care Program (ACP)

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Advisor Care Program (ACP) Connecting Qualified Patients Directly to our Centers 40 Patient calls number on MD Listing Call connected to Inspire Advisor Inspire Advisor calls clinic; Connects patient with LIVE scheduler Turning

  41. Slide 41: Holistic Approach to Engagement Across Key Stakeholders

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Holistic Approach to Engagement Across Key Stakeholders in the OSA Treatment Paradigm U.S. Sales Organization  98 Territories in U.S. and 9 in Europe  Managed by 4 Area Vice-Presidents and 18 Regional Sales Managers  Support

  42. Slide 42: Territory Manager Strategy

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Territory Manager Strategy Keys To Driving a Strong Territory How TMs Spend their Time Find The Right Centers Attend DISE, Cases & Follow up Drive Patient Flow & Practice Readiness  New Centers and Territory Framing  Leading

  43. Slide 43: Keeping Control While Growing Fast

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL KEEPING CONTROL WHILE GROWING FAST Focus on the rapid scaling of commercialization while ensuring proper training to maintain control of high-quality therapy outcomes The Great Balancing Act 43

  44. Slide 44: Financials

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Financials 44

  45. Slide 45: Quarterly Revenue

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL $3.0 $3.6 $4.7 $5.2 $5.3 $6.0 $7.3 $10.0 $10.0 $10.9 $13.1 $16.6 $16.3 $18.0 $20.9 $26.9 $21.3 $12.2 $35.8 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 60% 31%62% -32% 72%79% %

  46. Slide 46: Q3 2020 Performance

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL $20.9 $35.8 Q3 2019 Q3 2020 YoY Revenue ($ in millions) YoY Increase: 72% YoY Gross Margin YoY Increase: 210bps Q3 2020 Performance 83.4% 85.5% Q3 2019 Q3 2020 Territories EQ3 2020: 98 EQ3 2019: 66 89% 11% Q3 2019 Revenue Mix U

  47. Slide 47: Annual Revenue and Gross Margin

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL $16.4 $28.6 $50.6 $82.1 Guidance [$110-112] 2016 2017 2018 2019 2020 2016 – 2019 CAGR: 71.1% Annual Revenue and Gross Margin ($ in millions) Annual Gross Margin 76.2% 78.9% 80.1% 83.4% Guidance [84 - 85%] Revised 2020 Guidance

  48. Slide 48: Our Growth Strategies

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL 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 referrin

  49. Slide 49: Compelling Market Opportunity

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Large and growing prevalence of OSA Significant economic cost of untreated OSA Urgent clinical need for an effective alternative to CPAP ~$10bn annual market opportunity in the U.S. Compelling Market Opportunity Our Innovative

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