Inspire Medical Systems, Inc. · NYSE:INSP
Inspire Medical Systems — Investor Presentation (November 2019)
40 slides from Inspire Medical Systems's investor presentation, Nov 12, 2019
Slide 1: Inspire Medical Systems, Inc. November 2019
Inspire Medical Systems, Inc. November 2019 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 contained in this presentation are forward-looking statements. In some cases, you can identify forward
Slide 3: 3 © Inspire Medical Systems, Inc. All Rights Reserved
3 © Inspire Medical Systems, Inc. All Rights Reserved
Slide 4: 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 6,500 patients tre
Slide 5: Strong Management Team
Strong Management Team Other Key Management Steve Jandrich VP, Human Resources & Chief Compliance Officer Ivan Lubogo Sr. VP, U.S. Sales Martin Abrams VP, Marketing & Customer Experience Andreas Henke VP, European Operations Quan Ni, PhD VP, Research & Clinical Affairs John Rondoni VP, Product Devel
Slide 6: 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 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 • Delivered through a mask that connects through a Drivers of Non-Compliance hose to a bedside air pump Mask Discomfort • Demonstrated
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 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 9: 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 10: 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 11: 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 12: Clinical Evidence
Clinical Evidence 12 © Inspire Medical Systems, Inc. All Rights Reserved
Slide 13: Significant Body of Clinical Evidence Evaluating Inspire in more than 2,000 Patients
Significant Body of Clinical Evidence Evaluating Inspire in more than 2,000 Patients Across 23 Studies1 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
Slide 14: 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 (ODI) (Median) 29.3 25.4 9.0 9.7 7.4 8.6 6.0 6.2 4.8 4.6
Slide 15: 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 16: Summary of Selected Clinical Studies
Summary of Selected 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 –
Slide 17: Building Clinical Data Depth 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 2,500 patients Registry Results from 1,017 Patients Registry study designed to Apnea Hypopnea
Slide 18: Product and Indication Expansion
Product and Indication Expansion 18 © Inspire Medical Systems, Inc. All Rights Reserved
Slide 19: 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 5th generation neurostimulator is in the development the U.S. to patients as young as 12 years of phase age (including Down syndrome) Ins
Slide 20: 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 21: Reimbursement
Reimbursement 21 © Inspire Medical Systems, Inc. All Rights Reserved
Slide 22: Focus 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 • 2019 National Medicare average • Nearly 400 commercial payors in lead: CPT
Slide 23: 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 24: Medicare Local Coverage Determinations
Medicare Local Coverage Determinations (LCDs) have published from 6 of 7 Medicare Administrative Contractors (MACs) • Novitas Solutions, First Coast Service Options (FCSO), Palmetto, CGS Administrators (CGS), National Government Services (NGS), and Noridian have all officiall
Slide 25: Prior Authorization Metrics Improving with Every New 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 26: U.S. Commercial Prior Authorization Submissions
U.S. Commercial Prior Authorization Submissions Continued focus on Prior Authorization Submissions Total Submissions • Q3 2018 included a bolus of Aetna resubmissions following the issuance of the coverage policy 2019 YTD: 2,269 • Q1 2019 is revised as there were 34 additional submissions not includ
Slide 27: U.S. Commercial Prior Authorization Approvals
U.S. Commercial Prior Authorization Approvals • The median time to approval has been reduced to 25 days in 2019 as compared to 100 days in 2018 Total Approvals • Mean time reduced to 51 days in 2019 vs. 125 2019 YTD: 1,696 days in 2018 2018: 1,230 • Majority of cases approved at first or Pre-D level
Slide 28: Commercial Development
Commercial Development 28 © Inspire Medical Systems, Inc. All Rights Reserved
Slide 29: 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 30: 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 Sleep Patients 66 Territories in U.S. and 7 in Europe Centers Managed by 4 Area Vice-Presidents and 13 Region
Slide 31: 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 FCRs to to 13 in Q3 2019 Support Adding Field Clinical Reps (FCRs) to AttendAttend DISE, D
Slide 32: 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 32 © Inspire Medical Systems, Inc. All Rights Reserved
Slide 33: 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 34: Financials
Financials 34 © Inspire Medical Systems, Inc. All Rights Reserved
Slide 35: Quarterly Revenue
Quarterly Revenue ($ in Millions) 2019 Revised Outlook: FY2019 revenue of $78M - $79M, up 54% - 56% from FY2018 revenue of $50.6M (Prior guidance of $73M - $75M following Q2 2019 results) $20.9 $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 $3.6 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Slide 36: Annual Revenue and Gross Margins
Annual Revenue and Gross Margins Annual Revenue ($ in millions) Annual Gross Margin 2016 – 2018 CAGR: 75.7% 2016-2018 Improvement: +390bps Guidance [$78-79] Guidance [82-83%] 80.1% $50.6 78.9% $28.6 76.2% $16.4 2016 2017 2018 2019 2016 2017 2018 2019 2019 Revised Outlook: FY2019 revenue of $78M - $7
Slide 37: In Q3 2019, Inspire Experienced Strong YoY Growth
In Q3 2019, Inspire Experienced Strong YoY Growth YoY Revenue ($ in millions) YoY Gross Margin YoY Growth: 60% YoY Increase: 230bps Territories EQ3 2019: 66 $20.9 83.4% EQ3 2018: 40 Q3 2019 Revenue Mix US OUS 11% $13.1 89% 81.1% Q3 2018 Revenue Mix US OUS 13% 87% Q3 2018 Q3 2019 Q3 2018 Q3 2019 37 ©
Slide 38: 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 39: 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 6,500 patients treated at over 266 medical Compelling Market centers across the U.S. Opportunity Significant payor experience . 145 million cover
Slide 40: Inspire Sleep Apnea Innovation
& Inspire Sleep Apne
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