Inspire(US:INSP)2020-11-03 04:23Financial Data and Key Metrics Changes - In Q3 2020, the company generated worldwide revenue of $35.8 million, a 72% increase compared to $20.9 million in Q3 2019 [8][47] - U.S. revenue was $33.1 million, up 78% from $18.6 million in the prior year [48] - European revenue increased 23% to $2.7 million [48] - Gross margin improved to 85.5% from 83.4% in the prior year, attributed to manufacturing efficiencies [49] - Operating expenses rose 56% to $40.5 million, primarily due to expansion efforts [51] - Net loss for Q3 was $10.4 million, compared to $8.2 million in Q3 2019 [52] - Cash and investments totaled $234.6 million as of September 30, providing a solid cash position for growth initiatives [53] Business Line Data and Key Metrics Changes - The company added 42 new U.S. implanting centers, totaling 370, exceeding prior guidance [14] - The average selling price (ASP) in the U.S. was $23,800, consistent with the prior year, while European ASP increased to $23,300 from $21,700 [48] - Medicare cases represented approximately 30% of all cases, with commercial cases at 65% and VA military cases at 5% [21] Market Data and Key Metrics Changes - The company experienced a strong rebound in patient flow and implant activity, returning to pre-COVID levels [9][10] - The number of visitors to the company's website increased by 15% year-over-year, reaching over 3.6 million [20] - The company established over 43,000 physician contacts via the website, a 39% increase year-over-year [20] Company Strategy and Development Direction - The company is focused on increasing patient flow at existing centers and opening new implanting centers [53] - There is an emphasis on expanding direct-to-consumer marketing efforts, with a 30% increase in spending in Q3 [71] - The company plans to continue enhancing its digital technology, including the Inspire Cloud project and the Inspire app [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business outlook for the remainder of 2020, increasing full-year revenue guidance to $110 million - $112 million [11][56] - The company is closely monitoring the impact of COVID-19 but has not seen any immediate suspension of cases [55] - Management highlighted the importance of maintaining a balance between opening new centers and increasing utilization at existing centers [68] Other Important Information - The company received regulatory approval in Australia and is progressing with reimbursement applications [39] - A new Category I CPT code for the Inspire procedure was approved, expected to improve reimbursement for surgeons [33][96] Q&A Session Summary Question: Congratulations on a phenomenal quarter, can you provide insights on center penetration and DTC advertising? - Management noted that they are still working through patient groups affected by COVID and emphasized the importance of increasing utilization at existing centers while continuing direct-to-consumer efforts [62][68] Question: Can you provide guidance for 2021? - Management indicated that they plan to be aggressive with hiring new centers and territories, supported by positive reimbursement trends [78] Question: What is the pathway forward with Anthem? - Management acknowledged Anthem's conservative stance but emphasized ongoing communication and the importance of building clinical evidence to support policy changes [86] Question: How much visibility do you have on Q4 given COVID spikes? - Management expressed confidence that hospitals and physicians have adapted to operate safely during COVID, with no current suspension of cases [100] Question: Can you quantify the volume from deferred procedures in Q3? - Management acknowledged a bolus effect from Q3 but emphasized strong growth from new patients and ongoing efforts to bring patients into the process [104][106] Question: What is the utilization difference between ASCs and traditional hospitals? - Management indicated that ASCs currently represent about 15% of total centers, with expectations for increased utilization as reimbursement improves [116]