Inspire Medical Systems, Inc. · NYSE:INSP
Inspire Medical Systems — Investor Presentation (November 2018)
37 slides from Inspire Medical Systems's investor presentation, Nov 13, 2018
Slide 1: Inspire Medical Systems Company Presentation November 2018
Inspire Medical Systems, Inc. s Company Presentation November 2018 NYSE: INSP
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: Inspire is an Innovative Neurostimulation Solution for Patients with Moderate to Severe OSA
Inspire is an Innovative Neurostimulation Solution for Patients with Moderate to Severe OSA Our History & Key Milestones First and only FDA-approved neurostimulation technology for OSA 1990s: Medtronic begins early work on the development of Inspire More than 3,800 patients treated with Inspire ther
Slide 4: Strong Management Team
Strong Management Team Other Key Management • Steve Jandrich – Chief Compliance Officer, VP, Human Resources • Kathy Sherwood – VP, Global Market Access • Howard Green – VP, Marketing 3 • Andreas Henke – VP, Commercial Operations, Europe • John Rondoni – VP, Product Development, Tim Herbert Rick Buc
Slide 5: Obstructive Sleep Apnea (OSA) is a Serious and Chronic Disease
Obstructive Sleep Apnea (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 h
Slide 6: Sleep Apnea is a Major Public Health Problem & Awareness is Building
Sleep Apnea is a Major Public Health Problem & Awareness is Building Metrics – Week of January 22, 2018 55,823 (+22%) 12,199 (+43%) Web Sessions Doctor Searches 548 (+42%) 202 (+59%) 184 (+25%) Calls Emails CHT Sign-Ups (+) represents change Week over Week 6 ____________________ Source: The New York
Slide 7: 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 Drivers of CPAP Non-Compliance Delivered through a face or nasal mask that connects through a Mask Discomfort hose to a bedside air pum
Slide 8: 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 Our Estimated Annual U.S. Market Opportunity Sleep apnea affects +100 million people worldwide (1) Approximately 17 million individuals in the Adults with Moderate t
Slide 9: Our Inspire Therapy is a Disruptive Solution for Patients with OSA
Our Inspire Therapy is a Disruptive 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 2-hour outpatient procedure Requires three small i
Slide 10: Inspire Therapy Overcomes Many of These Limitations with a Safe and Effective Solution
Inspire Therapy Overcomes Many of These Limitations with 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
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 Inspire system turned on 12:23:00 AM 12:23:30 AM 12:24:00 AM 12:24:30 AM 12:25:00 AM 12:25:30 AM 12:26:00 AM 12:26:30 AM 12:27:00 AM 12:27:30 AM 12:28:00 AM 12:28:30 AM 12:29:
Slide 12: Clinical Evidence
Clinical Evidence
Slide 13: Significant Body of Clinical Evidence Evaluating Inspire in ~775 Patients Across 10 Studies
Inspire in ~775 Patients ~775 in Inspire Across10 Studies Significant of ClinicalBody Evidence Evaluating 13 Independent Company Sponsored Publication Publication Publication 2018 2018 2018 2018 New York New Stimulation TherapyStimulation for Reduction Apnea (STAR) University of Pittsburgh Medical C
Slide 14: Overview of the STAR Trial
Overview of the STAR Trial Multi-center, prospective, single-group, Phase III pivotal trial 12 Month Results Publication: Evaluated 126 patients who had difficulty either accepting or New England Journal of Medicine adhering to CPAP 22 medical centers across the United States and Europe Trial
Slide 15: STAR Trial Met Both Primary Endpoints & Showed Significant Reductions in AHI & ODI
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 (Median) 29.3 25.4 9.0 9.7 7.4 8.6 6.0 6.2 4.8 4.6 Event
Slide 16: Additional STAR Findings Showed Improvement in Compliance and Quality of Life Metrics
Additional STAR Findings Showed Meaningful Improvement in Compliance and Quality of Life Metrics Inspire has Substantial Positive Implications …and has Resulted in Meaningful Impact to on Patient Compliance… Patients' Quality of Life Functional Outcomes of Sleep Self-Reported Device Use Questionnair
Slide 17: Inspire's Clinical Evidence has been Replicated Across Multiple Studies
Inspire’s Compelling Clinical Evidence has been Replicated Across Multiple Studies Company sponsored, multi-center post-approval study Apnea Hypopnea Index (Median) P<0.001 in Germany (N=60) 28.6 German Measurements: 2 months, 6 months and 1 year 67% Reduction Post-Market 9.5 Study Publication
Slide 18: Independent Cleveland Clinic Comparison Study of Inspire vs. UPPP
Recent Developments: Independent Cleveland Clinic Comparison Study of Inspire vs. UPPP Independent retrospective study conducted by multi- Pre vs Post Operative AHI for UPPP vs HNS Groups (Mean) disciplinary team of physicians from the Cleveland Clinic P= 0.02 P<0.001 (N=40) 40.3 29% Reduction 38.
Slide 19: Building Clinical Data Depth with Our 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 2,500 patients Registry Results from 301 Patients Registry study designed to be retrospective
Slide 20: Product and Indication Expansion
Product and Indication Expansion
Slide 21: Committed to 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 concept U.S. to patients as young as 12 years of age phase of development (including Down synd
Slide 22: Inspire Cloud: Longitudinal Care
Inspire Cloud: Longitudinal Care Care team Inspire cloud Referral network Inspire Cloud was launched at the AASM (American Academy of Sleep Medicine) annual meeting June 2018 • Monitors Adherence • Strengthens the Referral • Generates Complete Patient Network Therapy Reports • Creates Care Coordinat
Slide 23: Commercial Development
Commercial Development
Slide 24: We have a Targeted Approach to Market Development
We have a Targeted Approach to Market Development Inspire Approach to 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 generating
Slide 25: Our Sales Strategy Engages All Key Stakeholders Across the OSA Treatment Paradigm
Our Sales Strategy Engages All Key Stakeholders Across the OSA Treatment Paradigm Holistic Approach to Engagement Across Key Stakeholders in the OSA Treatment Paradigm Sales Organization 40 Territory Managers (reps) in U.S. and 6 in Europe Sleep Centers Managed by Regional Sales Managers (7) S
Slide 26: Keys To Driving a Strong Territory
Keys To Driving a Strong Territory 1. New Centers and Territory Framing How TMs Spend Their Time • Building Regional Manager Team and FCRs to currently have 7 RMs (added 3 in Q2) support • Adding Field Clinical Reps (FCRs) to support implants Find The Right Attend DISE, 2. Continuing adding Territor
Slide 27: Reimbursement
Reimbursement
Slide 28: Focused on All Aspects of Reimbursement: 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 payment • Approximately 300 commercial lead: CPT
Slide 29: Developing Positive Coverage Policies – Leveraging the Aetna Policy Decision
Developing Positive Coverage Policies – Leveraging the Aetna Policy Decision United Aetna Healthcare Anthem 14 BCBS Plans: 22.2 M California & 45.7 M HCSC Georgia ++ BCBS 38.7 M IL/TX 14.6 M Cigna, Focus on local payments BCBS Humana BCBS Small Regional Medicare 9 BCBS Plans: Others & others Plans f
Slide 30: Our Market Access Team is Highly Effective in Working with Patients and Physicians
Our Market Access Team is Highly Effective in Working with Patients and Physicians Case-by-Case Submissions, Reviews & Approvals Process Prepare/Submit an Prepare/Submit an If denied Prepare/Submit an If denied Prepare/Submit an If denied EMR appeal Prior Authorization 1st level appeal 2nd level app
Slide 31: U.S. Commercial Prior Authorization Submissions
U.S. Commercial Prior Authorization Submissions Key focus is to continue to grow individual patient prior Total Submissions authorizations while working with payors to develop 2018YTD: 1,838 2017A: 1,506 positive coverage policies longer term. 2016A: 960 Process driven by 12 person market access tea
Slide 32: U.S. Commercial Prior Authorization Approvals
U.S. Commercial Prior Authorization Approvals Many patients who are willing to work through the Total Approvals process benefit from an approval. Shortly after this 2018YTD: 835 approval, the process shifts to scheduling the placement 2017A: 583 2016A: 330 of the Inspire system. 32
Slide 33: Financials
Financials
Slide 34: 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 $28.6 78.9% 76.2% $16.4 64.9% $8.0 2015 2016 2017 2015 2016 2017 Quarterly Revenue Quarterly Gross Margin $13.1 $10.9 $10.0 $10.0 81.1% 80.8% 81.1% 79.0% 78.5% 76.4%
Slide 35: In Q3 2018, Inspire Experienced Meaningful YoY Growth
In Q3 2018, Inspire Experienced Meaningful YoY Growth YoY Revenue YoY Gross Profit YoY Growth: 80% (1) YoY Growth: 86% (1) $10.6 $13.1 $5.7 Territory Managers EQ3 2017 26 EQ3 2018 40 Q3 2017 Q3 2018 $7.3 YoY Gross Margin YoY Increase: 260bps (1) 81.1% 78.5% Q3 2017 Q3 2018 Q3 2017 Q3 2018 __________
Slide 36: 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 ther
Slide 37: Our Innovative Inspire Solution has a 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 3,800 patients treated at over 180 medical Compelling Market centers across the U.S. and Europe Opportunity Evidence of Safety and 5-Year Long-Ter
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