Inspire Medical Systems, Inc. (NYSE: INSP) (Inspire), a medical
technology company focused on the development and commercialization
of innovative, minimally invasive solutions for patients with
obstructive sleep apnea (OSA), today reported financial results for
the quarter ended September 30, 2023.
Recent Business Highlights
- Generated revenue of $153.3 million in the third quarter
of 2023, a 40% increase over the same quarter last year
- Achieved gross margin of 84.1% in the third quarter of
2023
- Reduced loss per share to 29 cents compared to 60 cents in the
prior year period
- Activated 62 new centers in the U.S. in the third quarter of
2023, bringing the total to 1,107 U.S. medical centers providing
Inspire therapy
- Created 13 new U.S. sales territories in the third quarter of
2023, bringing the total to 274 U.S. sales territories
- Surpassed 50,000 patients treated with Inspire therapy
"We are pleased with our strong performance in
the third quarter, growing revenue 40% year-over-year. Our growth
continues to be driven primarily by higher utilization at existing
sites and was complemented by the addition of 62 new implanting
centers and 13 new U.S. sales territories," said Tim Herbert,
President, and Chief Executive Officer of Inspire Medical Systems.
"During the quarter, we achieved several important milestones,
including surpassing 50,000 patients implanted with Inspire therapy
and we also made significant progress with market access by
expanding coverage policies with several large national health
plans to include our recently expanded indications.”
“Early in the year, we implemented a pilot
program regarding prior authorization submissions by our customers,
and in tracking the results of the program, we observed a decline
in prior authorization submissions for patients seeking Inspire
therapy,” continued Mr. Herbert. “After recognizing this trend, we
reinvigorated our efforts to facilitate patient access to Inspire
therapy by more closely engaging with our customers with the prior
authorization submission process, including involving our corporate
prior authorization team to assure consistency and accuracy of
submissions. These challenges had a short-term impact on the number
of implant procedures early in the third quarter, but the increase
in patient prior authorizations at the end of the quarter
reinforces our confidence in the fourth quarter and beyond.
Therefore, we are increasing our full-year revenue to be in the
range of $608 to $612 million, up from $600 to $610 million,
representing a 49% to 50% increase compared to 2022.”
Third Quarter 2023 Financial Results
Revenue was $153.3 million for the three
months ended September 30, 2023, a 40% increase from
$109.2 million in the corresponding period in the prior year.
U.S. revenue for the quarter was $147.5 million, an increase
of 39% as compared to the prior year quarter. Third quarter revenue
outside the U.S. was $5.8 million, an increase of 99% as
compared to the third quarter of 2022.
Gross margin was 84.1% for the three months
ended September 30, 2023, compared to 81.9% for the corresponding
prior year period. Recall in the third quarter of 2022, we had
inventory obsolescence charges associated with new product launches
which negatively impacted gross margin.
Operating expenses increased to
$142.4 million for the third quarter of 2023, as compared to
$106.6 million in the corresponding prior year period, an
increase of 34%. This increase primarily reflected ongoing
investments in the expansion of the U.S. sales organization,
direct-to-patient marketing programs, continued product development
efforts, as well as increased general corporate costs.
Net loss was $8.5 million for the third
quarter of 2023, as compared to $16.8 million in the
corresponding prior year period. The diluted net loss per share for
the third quarter of 2023 was $0.29 per share, as compared to $0.60
in the prior year period.
As of September 30, 2023, cash, cash
equivalents, and investments increased to $467.2 million from
$451.4 million on December 31, 2022.
Full Year 2023
Guidance
Inspire is increasing and narrowing its full
year 2023 revenue guidance to between $608 million to
$612 million, which represents growth of 49% to 50% over full
year 2022 revenue of $407.9 million. This compares to the
prior revenue guidance of $600 million to
$610 million.
The Company is maintaining its full year 2023
gross margin guidance of 83% to 85%.
Inspire is also maintaining its guidance
relating to the opening of new U.S. medical centers of 52 to 56 per
quarter for the remaining quarter of the year, as well as its
guidance of 12 to 14 new U.S. territories for the fourth quarter of
2023.
Webcast and Conference Call
Inspire’s management will host a conference call
after market close today, Tuesday, November 7, 2023, at 5:00 p.m.
Eastern Time to discuss these results and answer questions.
To access the conference call, please
preregister
on https://register.vevent.com/register/BI1b19ca88a7ac4c3bb9f3432b25f72365.
Registrants will receive confirmation with dial-in details.
A live webcast of the event can be accessed on
https://edge.media-server.com/mmc/p/qv623ga2/. A replay of the
webcast will be available on https://investors.inspiresleep.com
starting approximately two hours after the event and archived on
the site for two weeks.
About Inspire Medical Systems
Inspire is a medical technology company focused
on the development and commercialization of innovative, minimally
invasive solutions for patients with obstructive sleep apnea.
Inspire’s proprietary Inspire therapy is the first and only
FDA-approved neurostimulation technology that provides a safe and
effective treatment for moderate to severe obstructive sleep
apnea.
For additional information about Inspire, please visit
www.inspiresleep.com.
Forward Looking Statements
This press release 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 statements, including, without
limitation, statements regarding full year 2023 financial outlook,
our expectations to activate new U.S. medical centers and add new
territories per quarter in 2023 and the impact of such additions,
and our strategy and investments to grow and scale our business. In
some cases, you can identify forward-looking statements by terms
such as ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘expect,’’ ‘‘plan,’’
‘‘anticipate,’’ ‘‘could,’’ “future,” “outlook,” “guidance,”
‘‘intend,’’ ‘‘target,’’ ‘‘project,’’ ‘‘contemplate,’’ ‘‘believe,’’
‘‘estimate,’’ ‘‘predict,’’ ‘‘potential,’’ ‘‘continue,’’ or the
negative of these terms or other similar expressions, although not
all forward-looking statements contain these words.
These forward-looking statements are based on
management’s current expectations and involve known and unknown
risks and uncertainties that may cause our actual results,
performance, or achievements to be materially different from any
future results, performance, or achievements expressed or implied
by the forward-looking statements. Such risks and uncertainties
include, among others, estimates regarding the annual total
addressable market for our Inspire therapy in the U.S. and our
market opportunity outside the U.S.; future results of operations,
financial position, research and development costs, capital
requirements and our needs for additional financing; commercial
success and market acceptance of our Inspire therapy; the impact of
COVID-19; general and international economic, political, and other
risks, including currency, inflation, stock market fluctuations and
the uncertain economic environment; our ability to achieve and
maintain adequate levels of coverage or reimbursement for our
Inspire system or any future products we may seek to commercialize;
competitive companies and technologies in our industry; our ability
to enhance our Inspire system, expand our indications and develop
and commercialize additional products; our business model and
strategic plans for our products, technologies and business,
including our implementation thereof; our ability to accurately
forecast customer demand for our Inspire system and manage our
inventory; our dependence on third-party suppliers, contract
manufacturers and shipping carriers; consolidation in the
healthcare industry; our ability to expand, manage and maintain our
direct sales and marketing organization, and to market and sell our
Inspire system in markets outside of the U.S.; risks associated
with international operations; our ability to manage our growth;
our ability to increase the number of active medical centers
implanting Inspire therapy; our ability to hire and retain our
senior management and other highly qualified personnel; risk of
product liability claims; risks related to information technology
and cybersecurity; risk of damage to or interruptions at our
facilities; our ability to commercialize or obtain regulatory
approvals for our Inspire therapy and system, or the effect of
delays in commercializing or obtaining regulatory approvals; FDA or
other U.S. or foreign regulatory actions affecting us or the
healthcare industry generally, including healthcare reform measures
in the U.S. and international markets; and the timing or likelihood
of regulatory filings and approvals. Other important factors that
could cause actual results, performance or achievements to differ
materially from those contemplated in this press release can be
found under the captions “Risk Factors” and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations“ in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2022, as updated in our Quarterly Report on Form
10-Q for the quarter ended September 30, 2023 to be filed with
the SEC, and as such factors may be updated from time to time in
our other filings with the SEC, which are accessible on the SEC’s
website at www.sec.gov and the Investors page of our website at
www.inspiresleep.com. These and other important factors could cause
actual results to differ materially from those indicated by the
forward-looking statements made in this press release. Any such
forward-looking statements represent management’s estimates as of
the date of this press release. While we may elect to update such
forward-looking statements at some point in the future, unless
required by applicable law, we disclaim any obligation to do so,
even if subsequent events cause our views to change. Thus, one
should not assume that our silence over time means that actual
events are bearing out as expressed or implied in such
forward-looking statements. These forward-looking statements should
not be relied upon as representing our views as of any date after
the date of this press release.
Investor & Media ContactEzgi YagciVice
President, Investor Relationsezgiyagci@inspiresleep.com
617-549-2443
Inspire Medical Systems,
Inc.Consolidated Statements of Operations and
Comprehensive Loss (unaudited)(in thousands,
except share and per share amounts)
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Revenue |
|
$ |
153,302 |
|
|
$ |
109,188 |
|
|
$ |
432,291 |
|
|
$ |
269,956 |
|
Cost of goods sold |
|
|
24,382 |
|
|
|
19,786 |
|
|
|
68,522 |
|
|
|
43,963 |
|
Gross profit |
|
|
128,920 |
|
|
|
89,402 |
|
|
|
363,769 |
|
|
|
225,993 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
29,144 |
|
|
|
20,993 |
|
|
|
85,484 |
|
|
|
47,397 |
|
Selling, general and administrative |
|
|
113,247 |
|
|
|
85,603 |
|
|
|
327,853 |
|
|
|
225,853 |
|
Total operating expenses |
|
|
142,391 |
|
|
|
106,596 |
|
|
|
413,337 |
|
|
|
273,250 |
|
Operating loss |
|
|
(13,471 |
) |
|
|
(17,194 |
) |
|
|
(49,568 |
) |
|
|
(47,257 |
) |
Other (income) expense: |
|
|
|
|
|
|
|
|
Interest and dividend income |
|
|
(5,495 |
) |
|
|
(1,350 |
) |
|
|
(14,690 |
) |
|
|
(1,681 |
) |
Interest expense |
|
|
— |
|
|
|
656 |
|
|
|
— |
|
|
|
1,677 |
|
Other expense, net |
|
|
224 |
|
|
|
101 |
|
|
|
268 |
|
|
|
290 |
|
Total other (income)
expense |
|
|
(5,271 |
) |
|
|
(593 |
) |
|
|
(14,422 |
) |
|
|
286 |
|
Loss before income taxes |
|
|
(8,200 |
) |
|
|
(16,601 |
) |
|
|
(35,146 |
) |
|
|
(47,543 |
) |
Income taxes |
|
|
340 |
|
|
|
246 |
|
|
|
770 |
|
|
|
488 |
|
Net loss |
|
|
(8,540 |
) |
|
|
(16,847 |
) |
|
|
(35,916 |
) |
|
|
(48,031 |
) |
Other comprehensive loss: |
|
|
|
|
|
|
|
|
Foreign currency translation loss |
|
|
(181 |
) |
|
|
(148 |
) |
|
|
(4 |
) |
|
|
(106 |
) |
Unrealized gain (loss) on investments |
|
|
122 |
|
|
|
(14 |
) |
|
|
134 |
|
|
|
(202 |
) |
Total comprehensive loss |
|
$ |
(8,599 |
) |
|
$ |
(17,009 |
) |
|
$ |
(35,786 |
) |
|
$ |
(48,339 |
) |
Net loss per share, basic and
diluted |
|
$ |
(0.29 |
) |
|
$ |
(0.60 |
) |
|
$ |
(1.23 |
) |
|
$ |
(1.73 |
) |
Weighted average common shares
used to compute net loss per share, basic
and diluted |
|
|
29,365,968 |
|
|
|
28,226,345 |
|
|
|
29,229,626 |
|
|
|
27,782,093 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inspire Medical Systems,
Inc.Consolidated Balance Sheets
(unaudited)(in thousands, except share and per
share amounts)
|
|
September 30, 2023 |
|
December 31,2022 |
|
|
|
|
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
329,897 |
|
|
$ |
441,592 |
|
Investments, short-term |
|
|
134,317 |
|
|
|
9,821 |
|
Accounts receivable, net of allowance for credit losses of
$1,376 and $36, respectively |
|
|
71,460 |
|
|
|
61,228 |
|
Inventories, net |
|
|
26,115 |
|
|
|
11,886 |
|
Prepaid expenses and other current assets |
|
|
7,802 |
|
|
|
5,505 |
|
Total current assets |
|
|
569,591 |
|
|
|
530,032 |
|
Investments, long-term |
|
|
2,961 |
|
|
|
— |
|
Property and equipment,
net |
|
|
32,249 |
|
|
|
17,249 |
|
Operating lease right-of-use
assets |
|
|
23,081 |
|
|
|
6,880 |
|
Other non-current assets |
|
|
11,612 |
|
|
|
10,715 |
|
Total assets |
|
$ |
639,494 |
|
|
$ |
564,876 |
|
Liabilities and
stockholders' equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
40,031 |
|
|
$ |
26,847 |
|
Accrued expenses |
|
|
29,964 |
|
|
|
34,339 |
|
Total current liabilities |
|
|
69,995 |
|
|
|
61,186 |
|
Operating lease liabilities,
non-current portion |
|
|
25,173 |
|
|
|
7,536 |
|
Other non-current
liabilities |
|
|
146 |
|
|
|
146 |
|
Total liabilities |
|
|
95,314 |
|
|
|
68,868 |
|
Stockholders' equity: |
|
|
|
|
Preferred Stock, $0.001 par value, 10,000,000 shares authorized; no
shares issued and outstanding |
|
|
— |
|
|
|
— |
|
Common Stock, $0.001 par value per share; 200,000,000 shares
authorized; 29,403,189 and 29,008,368 issued and outstanding at
September 30, 2023 and December 31, 2022, respectively |
|
|
29 |
|
|
|
29 |
|
Additional paid-in capital |
|
|
904,293 |
|
|
|
820,335 |
|
Accumulated other comprehensive income (loss) |
|
|
44 |
|
|
|
(86 |
) |
Accumulated deficit |
|
|
(360,186 |
) |
|
|
(324,270 |
) |
Total stockholders' equity |
|
|
544,180 |
|
|
|
496,008 |
|
Total liabilities and stockholders' equity |
|
$ |
639,494 |
|
|
$ |
564,876 |
|
Inspire Medical Systems (NYSE:INSP)
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