Inspire Medical Systems, Inc. · NYSE:INSP
Inspire Medical Systems — Investor Presentation (September 2018)
36 slides from Inspire Medical Systems's investor presentation, Sep 5, 2018
Slide 1: 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 2: Inspire is an Innovative Neurostimulation Solution for Patients with OSA
More than 3,400 patients treated with Inspire therapy First and only FDA-approved neurostimulation technology for OSA Alternative for the estimated 35 – 65% of non-CPAP compliant patients ~$10bn annual U.S. market opportunity Innovative, closed-loop, minimally invasive solution Safe, comfortable and
Slide 3: Strong Management Team
Strong Management Team Tim Herbert President, CEO & Founder 30+ Years of Experience Rick Buchholz Chief Financial Officer 15+ Years of Experience Randy Ban SVP, Sales and Marketing 20+ Years of Experience 3 Other Key Management Steve Jandrich – Chief Compliance Officer, VP, Human Resources Kathy She
Slide 4: OSA is Caused by a Blocked or Partially Blocked Airway
OSA is Caused by a Blocked or Partially Blocked Airway Obstructive Sleep Apnea (OSA) is a Serious and Chronic Disease 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, w
Slide 5: Sleep Apnea is a Major Public Health Problem & Awareness is Building
Sleep Apnea is a Major Public Health Problem & Awareness is Building ____________________ Source: The New York Times, Science Daily, CBS This Morning, The Washington Post and Pioneer Press. Metrics – Week of January 22, 2018 55,823 (+22%) Web Sessions 548 (+42%) Calls 12,199 (+43%) Doctor Searches 2
Slide 6: 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 Invasive Surgery Uvulopalatopharyngoplasty (UPPP) Maxillomandibular Advancement (MMA) Delivered through a face or nasal mask that connect
Slide 7: 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 Our Estimated Annual U.S. Market Opportunity Sleep apnea affects +100 million people worldwide (1) Approximately 17 million individuals in the U.S. with moderate to severe OSA Annually, ~2 million
Slide 8: Our Inspire Therapy is a Disruptive Solution for Patients with OSA
Our Inspire Therapy is a Disruptive Solution for Patients with OSA Remote control and three implantable components: Pressure sensing lead: detects when the patient is attempting to breathe Neurostimulator: houses the electronics and battery power for the device Stimulation lead: delivers electrical
Slide 9: Inspire Therapy Overcomes Many of These Limitations
Inspire Therapy Overcomes Many of These Limitations with a Safe and Effective Solution Strong safety profile Effective and durable treatment Closed-loop system Strong patient compliance High patient satisfaction Minimally invasive outpatient procedure ~11-year battery life (without recharging) Utili
Slide 10: Polysomnogram Before and After Activation of Inspire System
Inspire system turned on Airflow Breathing Oxygen Saturation No OSA events OSA events - 100 – - - - 97.5 – - - - 95 – - - - 92.5 – - - - 90 – - - - 87.5 – - - - - 0 – - - - - -100 – - - - - - - 0 – - - - - - - - - 0 – - - - - - - - - - 0 – - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Slide 11: Objective Measures Show the Impact of Our Inspire Therapy on OSA
Objective Measures Show the Impact of Our Inspire Therapy on OSA Polysomnogram Before and After Activation of Inspire System system turned on Airflow Breathing SSAAAAMAAINAA SANA Nyeteesenndl Oxygen Saturation No OSA events " After activating the Inspire system, the patient exhibited a more regular
Slide 12: Significant Body of Clinical Evidence Evaluating Inspire in ~775 Patients
Company Sponsored Significant Body of Clinical Evidence Evaluating Inspire in ~775 Patients Across 10 Studies Stimulation Therapy for Apnea Reduction (STAR) 126 German Post Market Study 60 ADHERE Patient Registry Thomas Jefferson University Hospital (TJUH) & University of Pittsburgh Medical Center (
Slide 13: Overview of the STAR Trial
Overview of the STAR Trial Trial Design Primary Endpoints Secondary Endpoints AHI: Reduction in AHI from baseline to 12 months of more than 50% along with final AHI being less than 20 events per hour ODI: Reduction in ODI of more than 50% from baseline to 12 months Evaluation of impact to a patient’
Slide 14: 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 Apnea-Hypopnea Index (Median) All p values <0.001 vs. baseline results in median Events per Hour Meaningful Levels of Compliance Post-Implantation Oxygen Desatura
Slide 15: Additional STAR Findings Showed Improvement in Compliance and Quality of Life
Additional STAR Findings Showed Meaningful Improvement in Compliance and Quality of Life Metrics Inspire has Substantial Positive Implications on Patient Compliance Functional Outcomes of Sleep Questionnaire (Median) All p values <0.001 vs. baseline results Epworth Sleepiness Scale (Median) Normaliz
Slide 16: Inspire's Clinical Evidence has been Replicated Across Multiple Studies
Inspire’s Compelling Clinical Evidence has been Replicated Across Multiple Studies German Post-Market Study Company sponsored, multi-center post-approval study in Germany (N=60) Measurements: 2 months, 6 months and 1 year Publication: The Laryngoscope in 2017 Therapy compliance: average 39 hours per
Slide 17: Independent Cleveland Clinic Comparison Study of Inspire vs. UPPP
Recent Developments: Independent Cleveland Clinic Comparison Study of Inspire vs. UPPP Cleveland Clinic Comparison Study of Inspire Therapy and UPPP Independent retrospective study conducted by multi-disciplinary team of physicians from the Cleveland Clinic (N=40) N=20 enrolled in HNS N=20 enrolled
Slide 18: ADHERE Patient Registry
We Intend to Continue to Build the Depth of Our Clinical Data with Our ADHERE Patient Registry Registry Results from 301 Patients Registry study designed to be retrospective and prospective 10 hospitals in the U.S. and Germany part of registry Registry enrolled 301 patients between October 2016 and
Slide 19: Product and Indication Expansion
Product and Indication Expansion
Slide 20: Continuous Product Development & Indication Expansion
We are Committed to Continuous Product Development & Indication Expansion Indication Expansion Product Pipeline 5th generation neurostimulator is in the concept phase of development Inspire Cloud, which is still in development, is being designed to allow physicians to monitor patient compliance and
Slide 21: Inspire Cloud: Longitudinal Care
Inspire Cloud: Longitudinal Care Inspire cloud Care team Referral network Monitors Adherence Generates Complete Patient Therapy Reports Insight into Center-Wide Therapy Outcomes Strengthens the Referral Network Creates Care Coordination Hub Fits into existing sleep clinic workflows Inspire Cloud was
Slide 22: Inspire Cloud launch
inYspire eS Gaby = 4 <> Corsvire cous — Ezy Inspire Cloud was launched at the AASM. (American Academy of Sleep Medicine) annual meeting June 2018 ke ype * Monitors Adherence * Strengthens the Referral * Generates Complete Patient Network Therapy Reports * Creates Care Coordination Hub * Insight into
Slide 23: Inspire Approach to Market Development
Inspire Approach to Market Development We have a Targeted Approach to 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 / EP (1) Referrals Direct-to-Patient Outre
Slide 24: Our 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 Focus on building long-lasting physician relationships Support physicians through all aspects of a case Identify new regions with hi
Slide 25: Keys To Driving a Strong Territory
Keys To Driving a Strong Territory 1. New Centers and Territory Framing * Building Regional Manager Team and currently have 7 RMs (added 3 in Q2) * Adding Field Clinical Reps (FCRs) to support implants 2. Continuing adding Territory Managers * Ended Q2 with 36 Territory Managers * Continuous cadence
Slide 26: Focused on Reimbursement: Coding, Payment and Coverage
Our Team is Focused on All Aspects of Reimbursement, which Include Coding, Payment and Coverage Coding Physician Facility Payment Physician Facility Coverage Medicare Commercial Neurostimulator and stimulation lead: CPT code 64568 for Cranial Nerve Stimulator Sensing lead: CPT code 0466T (Category I
Slide 27: Payor Review Cycles and Coverage Policies
Review Cycles – most major providers have a scheduled annual review for policies Focus is to provide updated dossier, guidelines, experiences to encourage a deep dive review Continue to build on already strong clinical dossier and physician support Leverage internal staff as well as multiple contrac
Slide 28: Market Access Team Prior Authorization Track Record
____________________ Reflects data submitted from January 2017 – December 2017. Our Market Access Team is Highly Effective in Working with Patients and Physicians Prior Authorization Approval Track Record following a complete appeal review cycle Approval typically takes approximately 2-3 months +1,5
Slide 29: U.S. Commercial Prior Authorization Submissions
Process driven by 12 person market access team Total Submissions 2018YTD: 1,178 2017A: 1,506 2016A: 960 U.S. Commercial Prior Authorization Submissions Key focus is to continue to grow individual patient prior authorizations while working with payors to develop positive coverage policies longer term
Slide 30: U.S. Commercial Prior Authorization Approvals
Total Approvals 2018YTD: 468 2017A: 589 2016A: 331 U.S. Commercial Prior Authorization Approvals Many patients who are willing to work through the process benefit from an approval. Shortly after this approval, the process shifts to scheduling the placement of the Inspire system. 32
Slide 31: U.S. Commercial Prior Authorization Approvals
Ve U.S. Commercial Prior Authorization Approvals asp Many patients who are willing to work through the Total Approvals process benefit from an approval. Shortly after this 2018YTD: 468 approval, the process shifts to scheduling the placement oon a of the Inspire system. Past Quarter Approvals H H 2
Slide 32: Revenue and Gross Margins Since 2015
Revenue and Gross Margins Since 2015 ($ in Millions) Annual Revenue Annual Gross Margin 2015 – 2017 CAGR: 88.8% +1,400bps Improvement Quarterly Revenue Quarterly Gross Margin 89% 79% 69% 56% 91% % YoY Revenue Growth 81% ____________________ (1) Represents the YoY growth / change based on Q2 2018 act
Slide 33: In Q2 2018, Inspire Experienced Meaningful YoY Growth
In Q2 2018, Inspire Experienced Meaningful YoY Growth YoY Revenue YoY Gross Profit YoY Growth: 81% (1) YoY Gross Margin YoY Growth: 89% (1) YoY Increase: 360bps (1) ____________________ Note: All revenue figures in millions of dollars. The quarterly revenue and gross margins for 2017 are unaudited.
Slide 34: Our Growth Strategies
Our Growth Strategies Ensure strong and consistent patient outcomes globally thru deliberate expansion and robust training Promote awareness among patients, ENT physicians, sleep centers and referring physicians Expand U.S. sales and marketing organization to drive adoption of our Inspire therapy Le
Slide 35: Our Innovative Inspire Solution has a Significant First Mover Advantage
Our Innovative Inspire Solution has a Significant First Mover Advantage... FDA PMA Approval Since 2014 More than 3,400 patients treated at over 180 medical centers across the U.S. and Europe Evidence of Safety and 5-Year Long-Term Sustained Efficacy Consistent results across four sponsored and more
Slide 36: Our Innovative Inspire Solution has a Significant First Mover Advantage
Our Innovative Inspire Solution has-a Significant First Mover Advantage... inYspire ‘Compelling Market Opportunity 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. 7 In
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