Inspire Medical Systems, Inc. · NYSE:INSP

Inspire Medical Systems — Investor Presentation (May 2022)

45 slides from Inspire Medical Systems's investor presentation, May 4, 2022

  1. Slide 1: Inspire Medical Systems, Inc. May 2022

    1 Inspire Medical Systems, Inc. May 2022 NYSE: INSP

  2. 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 statemen

  3. Slide 3: INSPIRE

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL 3

  4. Slide 4: Inspire – 1st Quarter Updates

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Inspire – 1st Quarter Updates Recent business highlights:  Generated $69.4 million of revenue in the first quarter of 2022, a 72% increase over the same quarter last year  Achieved gross margin of 85.6% in the first quarter

  5. Slide 5: 2022 Reimbursement Updates (effective January 1, 2022)

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL 2022 Reimbursement Updates (effective January 1, 2022) New CPT codes for Inspire are now in-place and active!! • Hospitals: the 2022 national average Medicare payment to the hospital is $30,063, which is intended to cover the h

  6. Slide 6: Focus on a Strong Start to 2022

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Focus on a Strong Start to 2022  Updated FY 2022 Guidance:  Revenue: $336M – $344M, representing 44% – 47% growth from FY 2021 revenue of $233.4M (up from previous guidance of $318M – $326M).  Gross margin: 85 – 86%  U.S. t

  7. Slide 7: Commercial Execution: Opportunity to Accelerate Interest and Patient Appointments

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Qualifying Interest Driving Patient Appointments Generating Interest Selectively Expanding DTC Advertising Commercial Execution: Opportunity to Accelerate Interest and Patient Appointments Our Direct-to-Patient Strategy Has Pro

  8. Slide 8: Inspire is an Innovative Neurostimulation Solution for Moderate to Severe OSA

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Inspire is an Innovative Neurostimulation Solution for Moderate to Severe Obstructive Sleep Apnea (OSA)  First and only FDA-approved neurostimulation technology for OSA More than 24,000 patients treated with Inspire therapy 

  9. Slide 9: Strong Management Team

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Strong Management Team Tim Herbert President, CEO & Founder  30+ Years of Experience Rick Buchholz Chief Financial Officer  25+ Years of Experience Randy Ban Chief Commercial Officer  25+ Years of Experience Phil Ebeling Chi

  10. Slide 10: OSA is a Serious and Chronic Disease

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL 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

  11. Slide 11: 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

  12. Slide 12: Untreated CPAP is a Burden on Healthcare Resources

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Untreated CPAP is a Burden on Healthcare Resources 12 • Untreated OSA patients had ~$20,000 higher total annual Medicare costs • CPAP intolerant patients had higher Medicare utilization than PAP tolerant ALASKA-Study – non-adhe

  13. Slide 13: 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

  14. Slide 14: 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 Inspire Procedure  Approximately a 90-minute outpatient procedure  Requires two small incisions  Patients typically recover quickly and resume n

  15. Slide 15: Inspire Therapy is a Safe and Effective Solution

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Inspire Therapy is a Safe and Effective Solution Mild Stimulation is a Clear Mechanism of Action  Strong safety profile  Effective and durable treatment  Closed-loop system  Strong patient compliance  High patient satisfac

  16. Slide 16: Objective Measures Show the Impact of Inspire Therapy on OSA

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Objective Measures Show the Impact of Inspire Therapy on OSA Inspire system turned on Airflow Breathing Oxygen Saturation No OSA eventsOSA events Polysomnogram Before and After Activation of Inspire System After activating the

  17. Slide 17: Clinical Evidence

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Clinical Evidence 17

  18. Slide 18: Significant Body of Clinical Evidence Evaluating Inspire in Thousands of Patients

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Significant Body of Clinical Evidence Evaluating Inspire in Thousands of Patients, in 190+ papers * Due to the inclusion of certain patients in multiple studies, some studies are not shown in the table because they do not add a

  19. Slide 19: STAR Trial Met Both Primary Endpoints and Showed Reductions in AHI and ODI

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL STAR Trial Met Both Primary Endpoints & Showed Statistically Significant Reductions in AHI & ODI Significant Reduction in Severity of OSA Apnea-Hypopnea Index (Median) 29.3 9.0 9.7 6.0 6.2 Baseline N=126 12 Month N=124 18 Month

  20. Slide 20: Additional STAR Findings Showed Meaningful Improvement in Quality-of-Life Metrics

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL 30% 5% 4% 3% 1% Baseline N=108 12 Mo. N=103 18 Mo. N=103 3 Yr. N=100 5 Yr. N=80 17% 86% 87% 81% 90% Baseline N=108 12 Mo. N=103 18 Mo. N=103 3 Yr. N=100 5 Yr. N=80 Additional STAR Findings Showed Meaningful Improvement in Quali

  21. Slide 21: Summary of Inspire Clinical Studies

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Summary of Inspire Clinical Studies STAR Trial1 German Post-Market Study1 ADHERE Patient Registry1 TJUH and UPMC Evaluation2 # of Inspire Patients 124 97 56 1,849 97 Time Following Implantation 12 Months 5 Years 12 Months 12 Mo

  22. Slide 22: Building the Depth of Clinical Data with ADHERE Patient Registry

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL We Intend to Continue to Build the Depth of Our Clinical Data with Our ADHERE Patient Registry Registry Results from 1,849 Patients  Registry study designed to be retrospective and prospective  60 centers are involved in regi

  23. Slide 23: Reimbursement

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Reimbursement 23

  24. Slide 24: AMA Grants Approval for New Category I CPT Code

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL AMA Grants Approval for New Category I CPT Code • Hypoglossal Nerve Stim no longer shares Procedure Codes with Vagus Nerve Stim for Epilepsy • Category I CPT code 64582 replaced previously used CPT code 65468 • Eliminated ‘New

  25. Slide 25: Medicare Local Coverage Determination Completed and In-Place

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Medicare Local Coverage Determination (LCD) Completed and In-Place - All coverage criteria consistent in all 50 states MAC Final LCD Publication Date Noridian March 15, 2020 Novitas March 15, 2020 First Coast (Florida) March 15

  26. Slide 26: Product Development and Digital Health

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Product Development and Digital Health 26

  27. Slide 27: Inspire Digital Health Definition

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Inspire Digital Health Definition Connected tools for sleep docs, surgeons, and patients that improve outcomes and reduce work. • Collaborative patient screening • Seamless, personalized care • Efficient therapy management 27

  28. Slide 28: Foundational Customer Needs

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Foundational Customer Needs Opportunities to Create Brand Preference 28 ENT Surgeon • Strong, Predictable Patient Outcomes • Speed and Ease of Implant Procedure • Strong, Predictable Patient Outcomes • Speed and Ease of Patient

  29. Slide 29: There are 6,000 Board Certified Sleep MDs in the U.S.

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL There are 6,000 Board Certified Sleep MDs in the U.S. Over 90% are aware of Inspire Less than 40% are currently referring for Inspire Training Age Practice Management & Mindset 63% Internal Medicine / Pulmonary 25% Psychology /

  30. Slide 30: What Sleep MDs Think About CPAP and Inspire

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL What they think about CPAP What they think about Inspire Patient Treated OSA Perceived to be: • Invasive • Costly • Complex Sleep MDs Need Familiarity/Confidence in the Therapy Pathway Insurance Procedure Programming Etc. 30

  31. Slide 31: CPAP History: A Proven Model

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL CPAP History: A proven model CPAP Invented Game changing new therapy Increased Comfort First nasal pillow Ease of Use Integrated humidifier Auto Adjusting First Auto PAP Smart, connected CPAP Anytime adherence & efficacy Remote

  32. Slide 32: Unified Patient Management Platform

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Unified Patient Management Platform 32 Inspire Cloud App Programmer Remote Cloud

  33. Slide 33: Digital Health Pipeline

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Digital Health Pipeline 2021 2022 2023 2024 Collaboration & Monitoring Connected Programming Remote Programming • Virtual Visits • Collaboration Cloud • Find a Doctor • ESS for Clinical Study • Patient Education • Digital Usage

  34. Slide 34: Market Development

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL 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 / EP1 Referrals Direct-to-Patient Outre

  35. Slide 35: DTC Program: Strategic Pillars

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL DTC Program: Strategic Pillars #3: Convert to Appointment #1: Drive Efficient Awareness #2: Educate & Segment IS.com #4: Convert Appointment to Implant Paid Media • Breakthrough Content • Playbook Testing Customized journeys “G

  36. Slide 36: Advisor Care Program (ACP)

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Advisor Care Program (ACP) Connecting Qualified Patients Directly to our Centers 36 Patient calls number on MD Listing Call connected to Inspire Advisor Inspire Advisor calls clinic; Connects patient with LIVE scheduler Turning

  37. Slide 37: Holistic Approach to Engagement Across Key Stakeholders

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Holistic Approach to Engagement Across Key Stakeholders in the OSA Treatment Paradigm U.S. Sales Organization  174 Territories in U.S. and 12 in Europe  Managed by 2 Zone Sr. Vice Presidents, 8 Area Vice Presidents, and 30 Re

  38. Slide 38: Territory Manager Strategy

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Territory Manager Strategy Keys To Driving a Strong Territory How TMs Spend their Time Find The Right Centers Attend DISE, Cases & Follow up Drive Patient Flow & Practice Readiness  New Centers and Territory Framing  2 Zone S

  39. Slide 39: 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 while ensuring proper training to maintain control of high-quality therapy outcomes The Great Balancing Act 39

  40. Slide 40: Financials

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL Financials 40

  41. Slide 41: Quarterly Revenue

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL $10.0 $10.9 $13.1 $16.6 $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 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 ____________________ Quarterly amounts a

  42. Slide 42: Q1 2022 Performance

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL $40.4 $69.4 Q1 2021 Q1 2022 YoY Revenue ($ in millions) YoY Increase: 72% YoY Gross Margin YoY Increase: 40bps Q1 2022 Performance 85.2% 85.6% Q1 2021 Q1 2022 U.S. Territories EQ1 2022: 174 EQ1 2021: 117 94% 6% Q1 2021 Revenue

  43. Slide 43: Annual Revenue and Gross Margin; Updated 2022 Guidance

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL $28.6 $50.6 $82.1 $115.4 $233.4 Guidance $336-$344 2017 2018 2019 2020 2021 2022 2017 – 2021 CAGR: 69% Annual Revenue and Gross Margin ($ in millions) Annual Gross Margin 78.9% 80.1% 83.4% 84.7% 85.7% Guidance 85 – 86% 43 Updat

  44. Slide 44: Our Growth Strategies

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL 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 referrin

  45. Slide 45: Compelling Market Opportunity

    © Inspire Medical Systems, Inc. All Rights Reserved INSPIRE CONFIDENTIAL 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.S. Compelling Market Opportunity Our Innovative

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