Inspire Medical Systems, Inc. · NYSE:INSP
Inspire Medical Systems — Q4 2023 Earnings Presentation
34 slides from Inspire Medical Systems's earnings presentation, Feb 6, 2024
Slide 1: Inspire Medical Systems, Inc. February 2024
1 Inspire Medical Systems, Inc. February 2024 NYSE: INSP
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 statement
Slide 3: Company Overview
Company Overview • Inspire is the first and only FDA-approved neurostimulation technology for Obstructive Sleep Apnea (OSA) with significant first-mover advantage • Innovative, closed-loop, primary cell solution with ~11-year battery life • ~90-minute, safe, convenient, minimally invasive outpatient
Slide 4: Obstructive Sleep Apnea is a Serious and Chronic Disease
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Obstructive Sleep Apnea 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 sle
Slide 5: Current Treatment Options, Such as CPAP and Invasive Surgery, 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
Slide 6: 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
Slide 7: Inspire Has Similar Outcomes as CPAP, and Lower Symptoms & Disease Burden
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Inspire Has Similar Outcomes as CPAP, and Lower Symptoms & Disease Burden Population: New UAS (n=117) and CPAP (n=110) pts Follow-up: 12 months Inclusion of both arms • Sleepiness Symptoms • AHI between 15-65 • Predominant OSA
Slide 8: 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 Three implanted devices and patient remote: Pressure sensing lead: detects when the patient is attempting to breathe Neurostimulator: houses the el
Slide 9: Continuous Data Collection and Outcomes Monitoring
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Continuous Data Collection and Outcomes Monitoring • Collect real-world, international outcomes data • Eligibility – ALL patients receiving Inspire therapy • ADHERE Registry - 5,000 enrollments at 62 medical centers (enrollment
Slide 10: Inspire Patient Experience Report - Safety
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Inspire Patient Experience Report - Safety Inspire System Survivability to Revision by Implant Year Inspire System Survivability to Explant by Implant Year 10 90% 91% 92% 93% 94% 95% 96% 97% 98% 99% 100% 0 6 12 18 24 30 36 42 4
Slide 11: Inspire focus is to maintain strong Patient Outcomes
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Inspire focus is to maintain strong Patient Outcomes 33.0 7.8 10.2 0 5 10 15 20 25 30 35 Baseline (n=1,963) 6-mo Titration Study (n=1,852) 12-mo All Night Study (n=890)M ed ia n A HI (e ve nt s/ ho ur ) Apnea Hypopnea Index (AH
Slide 12: SleepSync Digital Health Platform Accelerates Growth
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL • Electronic medical records (Future) • Sleep coaching, telemedicine, and efficient home sleep apnea testing SleepSync Digital Health Platform Accelerates Growth Enhanced by Strategic Integrations Growing Inspire Value • Expand
Slide 13: Three Key Areas Will Drive Our Success In 2024 & Beyond
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Three Key Areas Will Drive Our Success In 2024 & Beyond 13 Patient Flow Capacity Outcomes • New Website (www.inspiresleep.com) launched in Dec 2023 will significantly improve Patient Education & Lead Capture • Refined Direct-to
Slide 14: Quarterly Revenue
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL $16.3 $18.0 $20.9 $26.9 $21.3 $12.2 $35.8 $46.0 $40.4 $53.0 $61.7 $78.4 $69.4 $91.4 $109.2 $127.9 $151.1 $153.3 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Quarterly Reven
Slide 15: Annual Revenue and Gross Margin; 2024 Guidance
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL $28.6 $50.6 $82.1 $115.4 $233.4 $624.7 2017 2018 2019 2020 2021 2022 2023 2017 – 2023 CAGR: 67% Annual Revenue and Gross Margin ($ in millions) Annual Gross Margin 78.9% 80.1% 83.4% 84.7% 85.7% 83.8% 84.5% 2024 Guidance: • FY20
Slide 16: Steady Cadence of New Center Adds
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL 7 10 12 18 15 15 15 22 20 19 21 33 28 15 42 55 47 63 68 81 73 51 58 61 68 72 62 78 Q 1 17 Q 2 17 Q 3 17 Q 4 17 Q 1 18 Q 2 18 Q 3 18 Q 4 18 Q 1 19 Q 2 19 Q 3 19 Q 4 19 Q 1 20 Q 2 20 Q 3 20 Q 4 20 Q 1 21 Q 2 21 Q 3 21 Q 4 21 Q 1
Slide 17: 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 (implanting centers and sales reps) while ensuring proper training to maintain control of high-quality therapy outcomes The Great Balancing Act
Slide 18: Q4 Business Highlights
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Q4 Business Highlights (As of December 31, 2023) • Generated $192.5 million of revenue in the fourth quarter • 40% increase over the same quarter last year • Achieved gross margin of 85.4% in the fourth quarter • Reported first
Slide 19: Our Growth Strategy
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Our Growth Strategy Through planned and controlled market expansion and robust physician training Ensure Strong Clinical Outcomes 1 By enhancing interconnectivity, simplifying the care pathway, and closely tracking outcomes Imp
Slide 20: No mask. No hose. Just sleep.
No mask. No hose. Just sleep.”
Slide 21: Appendix
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Appendix 21
Slide 22: Consolidated Statements of Operations & Comprehensive Income (Loss)
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Consolidated Statements of Operations & Comprehensive Income (Loss) (Unaudited)(In thousands, except share and per share amounts) 22
Slide 23: Condensed Consolidated Balance Sheets
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Condensed Consolidated Balance Sheets (Unaudited)(In thousands) 23
Slide 24: Strong Management Team
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Randy Ban Chief Commercial Officer Bryan Phillips SVP, General Counsel & Chief Compliance Officer Tim Herbert President, CEO & Founder Strong Management Team Ezgi Yagci Vice President, Investor Relations Rick Buchholz Chief Fin
Slide 25: Product Development and Digital Health
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Product Development and Digital Health 25
Slide 26: Supporting Patients on their Path to Inspire Implant
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Supporting Patients on their Path to Inspire Implant Fine- tune ActivationInspire Advisor Care Program (ACP) DISE/ Prior Authorization Patient education using the InspireSleep.com website Community health talks Physician Consul
Slide 27: The Patient Journey
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Inspire Patient THE PATIENT JOURNEY Awareness Education Consultation Implant Life w/ Inspire Confirm Sleep Study Fine- tuneActivationImplantPrior AuthDISE Conduct Online Search Attend Appt. Schedule an Appt. with IS Dr. Obtain
Slide 28: Patient Engagement Conversion Initiatives
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Patient Engagement Conversion Initiatives Improving Patient Engagement Conversion Initiatives Increasing ENT Capacity to Further Grow Utilization SleepSync Patient Management System increase Utility • Digital scheduling has sho
Slide 29: Market Development
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Market Development 29
Slide 30: Commercial Organization
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Chief Commercial Officer Commercial Organization U.S. Sales Team Patient Outcomes Team Territory Managers Field Clinical Reps Area Business Managers Sleep Support Specialists Surgical Trainers Care Pathway Specialists 30
Slide 31: Sales Area Structure
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL 9 Area Vice Presidents Sales Area Structure Area Business Managers (ABM) Regional Managers (RM) Territory Managers (TM) Field Clinical Reps (FCR) • One per area • Open new accounts • 3-5 per area • Coaching • C-Suite Engagement
Slide 32: Health Economics: Untreated OSA Cost Burden
Health Economics: Untreated OSA Cost Burden • Untreated OSA patients had ~$20,000 higher total annual Medicare costs • CPAP intolerant patients had higher Medicare utilization than PAP tolerant ALASKA-Study – non-adherent patients have greater chance of mortality (n>176,000)2 PAP non- adherent PAP a
Slide 33: Environmental, Social and Governance (ESG)
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Environmental, Social and Governance (ESG) ENVIRONMENTAL Committed to operating our business responsibly and minimizing our impact on the environment wherever possible. • By 2025, we aim to implement a formal environmental qual
Slide 34: Our Intellectual Property Portfolio
© Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Our Intellectual Property Portfolio (as of December 31, 2023) Covers aspects of our current Inspire system and future product concepts 80 issued U.S. patents (expiring between 2029 and 2041) and 81 pending U.S. patent appli
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