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 June 30, 2023.
Recent Business Highlights
- Generated revenue of $151.1 million in the second quarter
of 2023, a 65% increase over the same quarter last year
- Achieved gross margin of 83.9% in the second quarter of
2023
- Activated 72 new centers in the U.S. in the second quarter of
2023, bringing the total to 1,045 U.S. medical centers providing
Inspire therapy
- Created 19 new U.S. sales territories in the second quarter of
2023, bringing the total to 261 U.S. sales territories
- Submitted the Inspire V neurostimulator PMA supplement
application to the FDA
- Received FDA approval for Apnea Hypopnea Index (AHI) indication
expansion and increased Body Mass Index (BMI) labeling
- Received FDA approval for the SleepSync™ physician
programmer
"We are very pleased with our strong performance in the second
quarter. Our growth was driven by higher utilization at existing
sites and complemented by the addition of 72 new implanting centers
and 19 new U.S. sales territories," said Tim Herbert, President,
and Chief Executive Officer of Inspire Medical Systems. "Based on
our strong first-half results, we are raising our full year 2023
revenue guidance to between $600 million to $610 million,
an increase from our prior guidance of $580 million to $590
million."
"We achieved several important milestones in the second
quarter," continued Mr. Herbert. "Most importantly, we submitted
our Inspire V neurostimulation PMA supplement application to the
FDA for review. In addition, we received two key FDA approvals,
including an expanded indication, which increases the upper limit
of the AHI to 100 events per hour from 65 and raises the BMI
warning in the labeling to 40 from 32, and approval for our
SleepSync™ physician programmer. Finally, we continued to
strengthen our leadership team with the additions of Carlton
Weatherby as our Chief Strategy Officer and Charisse Sparks, M.D.
as our Chief Medical Officer. We are excited about the expertise
and skills these individuals bring to our executive leadership team
and are confident their contributions will position us for
sustained organic growth over the long term, fulfilling our mission
of serving the many patients with untreated OSA,” concluded Mr.
Herbert.
Second Quarter
2023 Financial Results
Revenue was $151.1 million for the three months ended June
30, 2023, a 65% increase from $91.4 million in the
corresponding period in the prior year. U.S. revenue for the
quarter was $144.7 million, an increase of 65% as compared to
the prior year quarter. Second quarter revenue outside the U.S. was
$6.3 million, an increase of 81% as compared to the second
quarter of 2022.
Gross margin was 83.9% for the three months ended June 30, 2023,
compared to 84.5% for the corresponding prior year period, with the
reduction primarily due to additional manufacturing costs of
sensors and lower yields prior to process enhancements, and higher
costs of certain component parts, partially offset by the price
increase that began in May of 2022.
Operating expense increased to $143.4 million for the
second quarter of 2023, as compared to $91.2 million in the
corresponding prior year period, an increase of 57%. 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 $12.0 million for the second quarter of 2023,
as compared to $14.5 million in the corresponding prior year
period. The diluted net loss per share for the second quarter of
2023 was $0.41 per share, as compared to $0.53 in the prior year
period.
As of June 30, 2023, cash, cash equivalents, and investments
increased to $467.1 million from $451.4 million on
December 31, 2022.
Full Year 2023
Guidance
Given the positive trends during the second quarter, Inspire is
increasing its full year 2023 revenue guidance to between
$600 million to $610 million, which would represent
growth of 47% to 50% over full year 2022 revenue of
$407.9 million. This compares to the prior revenue guidance of
$580 million to $590 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
remainder of 2023, as well as its guidance of 12 to 14 new U.S.
territories per quarter for the remainder of 2023.
Webcast and Conference Call
Inspire’s management will host a conference call after market
close today, Tuesday, August 1, 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/BIede3272c0bc748dea9cf8e0b4d643445.
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/94hmooq6. 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 June 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 Ended June 30, |
|
Six Months EndedJune 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
|
$ |
151,092 |
|
|
$ |
91,386 |
|
|
$ |
278,989 |
|
|
$ |
160,768 |
|
Cost of goods sold |
|
|
24,252 |
|
|
|
14,173 |
|
|
|
44,140 |
|
|
|
24,177 |
|
Gross profit |
|
|
126,840 |
|
|
|
77,213 |
|
|
|
234,849 |
|
|
|
136,591 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
30,821 |
|
|
|
14,534 |
|
|
|
56,340 |
|
|
|
26,404 |
|
Selling, general and administrative |
|
|
112,618 |
|
|
|
76,686 |
|
|
|
214,606 |
|
|
|
140,250 |
|
Total operating expenses |
|
|
143,439 |
|
|
|
91,220 |
|
|
|
270,946 |
|
|
|
166,654 |
|
Operating loss |
|
|
(16,599 |
) |
|
|
(14,007 |
) |
|
|
(36,097 |
) |
|
|
(30,063 |
) |
Other expense (income): |
|
|
|
|
|
|
|
|
Interest and dividend income |
|
|
(4,922 |
) |
|
|
(297 |
) |
|
|
(9,195 |
) |
|
|
(331 |
) |
Interest expense |
|
|
— |
|
|
|
494 |
|
|
|
— |
|
|
|
1,021 |
|
Other expense, net |
|
|
61 |
|
|
|
144 |
|
|
|
44 |
|
|
|
189 |
|
Total other (income)
expense |
|
|
(4,861 |
) |
|
|
341 |
|
|
|
(9,151 |
) |
|
|
879 |
|
Loss before income taxes |
|
|
(11,738 |
) |
|
|
(14,348 |
) |
|
|
(26,946 |
) |
|
|
(30,942 |
) |
Income taxes |
|
|
214 |
|
|
|
142 |
|
|
|
430 |
|
|
|
242 |
|
Net loss |
|
|
(11,952 |
) |
|
|
(14,490 |
) |
|
|
(27,376 |
) |
|
|
(31,184 |
) |
Other comprehensive loss: |
|
|
|
|
|
|
|
|
Foreign currency translation gain |
|
|
72 |
|
|
|
42 |
|
|
|
177 |
|
|
|
42 |
|
Unrealized (loss) gain on investments |
|
|
(1 |
) |
|
|
(45 |
) |
|
|
12 |
|
|
|
(188 |
) |
Total comprehensive loss |
|
$ |
(11,881 |
) |
|
$ |
(14,493 |
) |
|
$ |
(27,187 |
) |
|
$ |
(31,330 |
) |
Net loss per share, basic and
diluted |
|
$ |
(0.41 |
) |
|
$ |
(0.53 |
) |
|
$ |
(0.94 |
) |
|
$ |
(1.13 |
) |
Weighted average common shares
used to compute net loss per share, basic and diluted |
|
|
29,229,922 |
|
|
|
27,594,874 |
|
|
|
29,160,323 |
|
|
|
27,556,286 |
|
Inspire Medical Systems,
Inc.
Consolidated Balance Sheets
(unaudited)
(in thousands, except share and per share
amounts)
|
|
June 30, 2023 |
|
December 31, 2022 |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
467,051 |
|
|
$ |
441,592 |
|
Investments, short-term |
|
|
— |
|
|
|
9,821 |
|
Accounts receivable, net of allowance for credit losses of $917 and
$36, respectively |
|
|
63,500 |
|
|
|
61,228 |
|
Inventories, net |
|
|
20,840 |
|
|
|
11,886 |
|
Prepaid expenses and other current assets |
|
|
8,685 |
|
|
|
5,505 |
|
Total current assets |
|
|
560,076 |
|
|
|
530,032 |
|
Property and equipment,
net |
|
|
25,217 |
|
|
|
17,249 |
|
Operating lease right-of-use
assets |
|
|
21,368 |
|
|
|
6,880 |
|
Other non-current assets |
|
|
11,585 |
|
|
|
10,715 |
|
Total assets |
|
$ |
618,246 |
|
|
$ |
564,876 |
|
Liabilities and
stockholders' equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
39,961 |
|
|
$ |
26,847 |
|
Accrued expenses |
|
|
26,726 |
|
|
|
34,339 |
|
Total current liabilities |
|
|
66,687 |
|
|
|
61,186 |
|
Operating lease liabilities,
non-current portion |
|
|
22,054 |
|
|
|
7,536 |
|
Other non-current
liabilities |
|
|
146 |
|
|
|
146 |
|
Total liabilities |
|
|
88,887 |
|
|
|
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; 29,326,179 and 29,008,368 issued and outstanding at
June 30, 2023 and December 31, 2022, respectively |
|
|
29 |
|
|
|
29 |
|
Additional paid-in capital |
|
|
880,873 |
|
|
|
820,335 |
|
Accumulated other comprehensive income (loss) |
|
|
103 |
|
|
|
(86 |
) |
Accumulated deficit |
|
|
(351,646 |
) |
|
|
(324,270 |
) |
Total stockholders' equity |
|
|
529,359 |
|
|
|
496,008 |
|
Total liabilities and stockholders' equity |
|
$ |
618,246 |
|
|
$ |
564,876 |
|
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