Inspire(INSP) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported worldwide revenue of $91.4 million for Q2 2022, representing a 73% increase compared to $53 million in Q2 2021 [30] - U.S. revenue for Q2 was $87.9 million, an increase of 78% from $49.4 million in the prior year [30] - The company raised its full-year 2022 revenue guidance to a range of $354 million to $362 million, up from the previous guidance of $336 million to $344 million, indicating a growth of 52% to 55% over 2021 revenue of $233 million [8][30] - Gross margin decreased to 84.5% from 85.8% in the prior year due to higher costs of certain components [32] Business Line Data and Key Metrics Changes - The company added 52 new U.S. implanting centers in Q2, bringing the total to 785 centers [9] - Utilization at existing centers showed a significant increase, contributing to revenue growth [10] - The average selling price (ASP) in the U.S. increased to $24,100 from $23,900 in the prior year [31] Market Data and Key Metrics Changes - International revenue decreased by 3% year-over-year to $3.5 million, primarily due to unfavorable exchange rates, although units sold outside the U.S. were up 8% [16][30] - The company remains optimistic about European prospects, particularly in Germany, and has trained additional sites in the Netherlands and the UK [17][18] Company Strategy and Development Direction - The company focuses on increasing utilization at existing centers and expanding capacity by opening new centers [27] - The introduction of the SleepSync digital health platform aims to enhance remote therapeutic monitoring and improve patient outcomes [20] - The company is working on the design for its 5th generation Inspire Neurostimulator, targeting FDA approval in late 2023 [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business outlook for the remainder of 2022, citing strong performance and recent implant trends [38] - The company does not expect COVID-19 to negatively impact its business going forward [7] - Management highlighted the importance of improving patient access to care through outreach programs and technology advancements [15] Other Important Information - The company received FDA approval for full-body MRI compatibility, which is expected to alleviate concerns for patients considering Inspire therapy [22] - The company is also working on increasing the upper limit of its indication to include patients with an Apnea-Hypopnea Index (AHI) of up to 100 events per hour [25][26] Q&A Session Summary Question: What data have you submitted regarding the AHI and BMI changes? - The company has collected data from over 3,000 patients in the ADHERE registry and expects a 20% increase in its overall target market due to these changes [42][45] Question: What is the outlook for Q3 revenue growth? - The company maintains a conservative approach to guidance, expecting a stronger Q4 than Q3, driven by continued expansion and increased utilization [47][49] Question: How is the national advertising program impacting utilization? - The national programs have driven significant web traffic, with over 7 million visitors, and are expected to continue increasing awareness and utilization [53] Question: What are the implications of the new MRI compatibility? - The company believes that the MRI compatibility will provide peace of mind for patients and may lead to increased utilization in the future [70] Question: What is the expected impact of the proposed reimbursement changes? - The company is optimistic about the proposed 4% increase in ASC reimbursement, which is expected to positively impact future growth [68][94]