Inspire Medical Systems, Inc. · NYSE:INSP
Inspire Medical Systems — Investor Presentation (September 2019)
39 slides from Inspire Medical Systems's investor presentation, Sep 4, 2019
Slide 1: Inspire Medical Systems, Inc. September 2019
Inspire Medical Systems, Inc. September 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: © Inspire Medical Systems, Inc. 3 All Rights Reserved INSPIRE CONFIDENTIAL
© Inspire Medical Systems, Inc. 3 All Rights Reserved INSPIRE CONFIDENTIAL
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 6,000 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 © Inspire Medical Systems, Inc. 12 All Rights Reserved INSPIRE CONFIDENTIAL
Slide 13: Significant Body of Clinical Evidence Evaluating Inspire in >1,500 Patients
Significant Body of Clinical Evidence Evaluating Inspire in >1,500 Patients Across 22 Studies1 Patients Clinical Studies Evaluated Stimulation Therapy for Apnea Reduction (STAR) 126 German Post-Market Study 60 ADHERE Patient Registry 508 Company Company Sponsored Pediatric / Down Syndrome 26 Inspire
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 (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 18.2 18.4 18.8 18.7 11.0 Normalized daytime sleepiness = 10.0 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 56 508 48 / 49 Time Following 12 5 Years 12 Months 12 Months 3 Months Implantation Months AHI – Baseline 29.3 29.3 28.6 34.0 35.9 / 35.3 AHI – Th
Slide 17: Continue to Build Clinical Data 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 508 Patients � Registry study designed to Apnea Hypopnea In
Slide 18: Product and Indication Expansion
Product and Indication Expansion © Inspire Medical Systems, Inc. 18 All Rights Reserved INSPIRE CONFIDENTIAL
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 © Inspire Medical Systems, Inc. 21 All Rights Reserved INSPIRE CONFIDENTIAL
Slide 22: 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 • 2019 National Medicare average • Over 375 commercial payors in the lead: C
Slide 23: Developing Positive Coverage Policies – Covering 142 Million Lives
Developing Positive Coverage Policies – Currently, 41 Policies Covering 142 Million Lives United Anthem 14 BCBS Cigna Healthcare Plans: (15M) (41M) California & Georgia ++ (40M) Humana HCSC BCBS (12M) BCBS Others (12M) Aetna IL/TX BCBS (15M) (22M) 25 Other BCBS Plans: MI, FEP, Highmark, Independence
Slide 24: 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: 1,457 (H1 ‘19) • Q1 2019 is revised as there were 34 additional submissions not i
Slide 25: U.S. Commercial Prior Authorization Approvals
U.S. Commercial Prior Authorization Approvals Many patients who are willing to work through the Total Approvals process are approved; shortly after approval, 2019: 1,024 (H1 ‘19) the process shifts to scheduling the placement 2018: 1,230 of the Inspire system. 2017: 583 2016: 330 Past Quarter Approv
Slide 26: Prior Authorization Metrics are 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 27: Commercial Development
Commercial Development © Inspire Medical Systems, Inc. 27 All Rights Reserved INSPIRE CONFIDENTIAL
Slide 28: 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 29: Our 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 Patients � 59 Territory Managers (reps) in U.S. and 7 in Europe Centers � Managed by Regional Sales Manager
Slide 30: 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; targeting FCRs to 13 RMs by the end of 2019 Support � Adding Field Clinical Reps (FCRs) to AttendAtten
Slide 31: 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 © Inspire Medical Systems, Inc. 31 All Rights Reserved INSPIRE CONFIDENTIAL
Slide 32: 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 33: Financials
Financials © Inspire Medical Systems, Inc. 33 All Rights Reserved INSPIRE CONFIDENTIAL
Slide 34: Quarterly Revenue
Quarterly Revenue ($ in Millions) 2019 Revised Outlook: FY2019 revenue of $73M - $75M, up 44% - 48% from FY2018 revenue of $50.6M $18.0 (Prior guidance of $69M - $72M following Q1 2019 results) $16.6 $16.3 $13.1 $10.9 $10.0 $10.0 $7.3 $6.0 $5.3 $4.7 $5.2 $3.6 $3.0 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Slide 35: Annual Revenue and Gross Margins
Annual Revenue and Gross Margins Annual Revenue ($ in millions) Annual Gross Margin 2016 – 2018 CAGR: 75.7% 2016-2018 Improvement: +390bps Guidance [$72-75] Guidance [81-83%] 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 $72M - $7
Slide 36: In Q2 2019, Inspire Experienced Strong YoY Growth
In Q2 2019, Inspire Experienced Strong YoY Growth YoY Revenue ($ in millions) YoY Gross Margin YoY Growth: 65% $18.0 YoY Increase: 200bps Territory Managers EQ2 2019: 59 82.8% EQ2 2018: 36 Q2 2018 & 2019 Revenue Mix $10.9 US OUS 13% 80.8% 87% Q2 2018 Q2 2019 Q2 2018 Q2 2019 © Inspire Medical Systems
Slide 37: 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 38: 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 6,000 patients treated at over 270 medical Compelling Market centers across the U.S. and Europe Opportunity � Significant payor experience � 142 mi
Slide 39: Inspire Sleep Apnea Innovation
& Inspire Sleep Apnea Innovation
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