Inspire Medical Systems, Inc. · NYSE:INSP
Inspire Medical Systems — Investor Presentation (February 2019)
40 slides from Inspire Medical Systems's investor presentation, Feb 27, 2019
Slide 1: Inspire Medical Systems, Inc. February 2019
Inspire Medical Systems, Inc. s February 2019 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 contained in this presentation are forward-looking statements. In some cases, you can identify forward
Slide 3: Innovative Neurostimulation Solution for 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 4,600 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 • Andreas Henke – VP, Commercial Operations, Europe3 • John Rondoni – VP, Product Development, Operations & QA Tim Herbert Rick Buchholz Randy Ban
Slide 5: Obstructive Sleep Apnea 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 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 face or nasal mask that Drivers of CPAP Non-Compliance connects through a hose to a bedside air pump Mask Discomfor
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: 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 2-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 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
Inspirein ~1,470 Patients Across17 Studies SignificantBody of Clinical EvidenceEvaluating 13 (1) ____________________ Independent Company Sponsored Due to the inclusion of certain patients in multiple studies, some studies are not shown in the table because they do not add nottable certaininclusionm
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 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 15: Additional STAR Findings: Compliance and Quality of Life
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 16: Clinical Evidence 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 17: Independent Cleveland Clinic Comparison Study of Inspire vs. UPPP
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 38.9 28.8 88% Reduction
Slide 18: 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 508 Patients Registry study designed Apnea Hypopnea Index
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 Working with the FDA to expand indication in the 5th generation neurostimulator is in the development U.S. to patients as young as 12 years of age phase (including Down syndrome) Ins
Slide 21: 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 22: Reimbursement
Reimbursement
Slide 23: 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 • Over 330 commercial payors in the lead
Slide 24: Developing Positive Coverage Policies with Aetna & BCBS
Developing Positive Coverage Policies – Leveraging Momentum with Aetna & BCBS United Anthem Aetna Healthcare 14 BCBS Plans: 22.2 M California & 45.7 M HCSC Georgia ++ BCBS 38.7 M IL/TX 14.6M BCBS Cigna, Focus on local payments BCBS Others Humana Small Regional Plans 9 BCBS Plans: 17.4MM & others foc
Slide 25: Evidence Street Positive Technical Assessment
Evidence Street Complete Positive Technical Assessment Report summarized that the evidence is sufficient to determine that the Inspire therapy results in a meaningful improvement in the net health outcome for patients meeting the following selection criteria o Age ≥ 22 years in adults or adolescen
Slide 26: Market Access Team Prior Authorization Process and Approvals
Our Market Access Team is Highly Effective in Working with Patients and Physicians Case-by-Case Submissions, Reviews & Approvals Process Prepare/Submit an EMR Prepare/Submit an If denied Prepare/Submit an 1st If denied Prepare/Submit an 2nd If denied appeal Prior Authorization level appeal level app
Slide 27: 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 2018: 2,477 positive coverage policies longer term 2017: 1,506 • Q3 2018 includes a bolus of Aetna resubmissions following t
Slide 28: 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 2018: 1,230 approval, the process shifts to scheduling the placement 2017: 583 2016: 330 of the Inspire system Past Quarter Approvals 4
Slide 29: Commercial Development
Commercial Development
Slide 30: 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 31: 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 Sales Organization Sleep 46 Territory Managers (reps) in U.S. and 6 in Europe Centers Managed by Regional Sales Managers (9) S
Slide 32: 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 Building Regional Manager Team and FCRs to currently have 9 RMs (added 2 in Q4) Support Adding Field Clinical Reps (FCRs) to support implants Attend DISE, Find The Continu
Slide 33: The Great Balancing Act
The Great Balancing Act KEEPING CONTROL WHILE GROWING FAST What does it take to start, then grow a business into a successful public company yet maintain total control of product performance? 33
Slide 34: The Inspire Control System
The Inspire Control System Prevalence Pool 17M people in the US with End Goal: Strong OSA of which ≈25% could Incidence Pool be treated by using 500k new cases per Patient Outcomes!!! Inspire year who could be treated using Inspire Question 1: How Question 3: How Question 2: How Question 4: How Ques
Slide 35: Financials
Financials
Slide 36: Revenue and Gross Margins Since 2015
Revenue and Gross Margins Since 2015 ($ in Millions) Revenue Gross Margin 2015 – 2018 CAGR: 84.9% 2015 – 2018 Improvement: +1,520bps $50.6 80.1% 78.9% 76.2% $28.6 $16.4 64.9% $8.0 2015 2016 2017 2018 2015 2016 2017 2018 2019 Outlook: FY2019 revenues of $67M - $70M, up 32% - 38% YoY from FY2018 reven
Slide 37: Quarterly Revenue Since 2016
Quarterly Revenue Since 2016 ($ in Millions) $16.6 $13.1 $10.9 $10.0 $10.0 $7.3 $6.0 $5.2 $5.3 $4.7 $3.6 $3.0 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 151% 170% 89% 79% 69% 56% 91% 90% 81% 121% 80% 66% % YoY Revenue Growth 2019 Outlook: FY2019 revenues of $67M - $70M, up 32% - 38%
Slide 38: In 2018, Inspire Experienced Meaningful YoY Growth
In 2018, Inspire Experienced Meaningful YoY Growth YoY Revenue YoY Gross Profit YoY Growth: 77% YoY Growth: 80% $40.5 $50.6 $22.5 Territory Managers EQ4 2018 46 EQ4 2017 28 2017 2018 $28.6 YoY Gross Margin YoY Increase: 120bps 80.1% 78.9% 2017 2018 2017 2018 38
Slide 39: Our Growth Strategies
Our Growth Strategies Ensure strong and consistent patient outcomes globally through planned and controlled 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 Ins
Slide 40: 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 4,600 patients treated at over 245 medical Compelling Market centers across the U.S. and Europe Opportunity Evidence of Safety and 5-Year Long-Ter
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