INSP - Earnings call transcript Q2 2022 | Inspire Medical Systems, Inc.

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Operator

Good afternoon. My name is Dylan, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Inspire Medical Systems Second Quarter 2022 Conference Call. [Operator Instructions] I'll now hand a call over to your first speaker, Megan Rowekamp, Director of Financial Reporting at Inspire.

You may begin the conference.

Megan Rowekamp

you. Thank all today's you participating for thank call. in And

without to these and Tim? contains it turn because law, to XXXX. live to call update and as cause information, Securities effects call as with place pleasure And is and President limitation, filed Executive information new SEC and of Officer. make Inspire, required See results federal the a the XXXX whether XXXX. events risks actual material Officer; today, me with the including, Herbert. assumptions. relating Form my to or results COVID-XX or report today, laws. our to investments are based available Rick A financial that our any statements, will Chief our Herbert, future otherwise. any securities Tim broadcast three filings for uncertainties press results operational of on obligation, improvements Financial meaning and uncertainties. All of Joining financial full-year statements, operations, copy or those X, and of and these are various access today, of materially differ. reliance or June conference release These quarterly management the Tim on in undue upon our forward-looking and statements description time-sensitive Buchholz, within website. outlook released over the revise except pandemic, market On speaks XX-Q you and could Commission, financial statements. financial forward-looking risks forward-looking months August including call, the not statements Exchange and our or six with ended we This that, of our involve should condition, in Accordingly, disclaims is XX, and financial Earlier on current for business, continued events the intention Chief the estimates projections the this by only

Tim Herbert

for everyone the update. our quarter Thank second XXXX joining for today call you, thanks Megan. business And

concerns. excited challengescommon do highlights abundant In to let's a With our revenue This an with on ambulatory negative including second well representing XX% staffing regarding generated review our us focus impact success to chain get supply that in team's are commitment med business centers, the scheduled quarter, To economic several end, same theORas growth work growth on Moreover, second overcame XXXX. across cases collectively increase quarter very and and million. goods at to going forward factors second strategy. or not issues, quarter the we Again, able We revenue to staffing strong finished challenges, to sector, worldwide period the on we last surgical to over COVID we executing the and really the our supply both tech in a results. patient. and quarter managing expect our of second have shortages, have these of process. continue we allows be resiliency compared as $XX.X We WIP of XX% report year, in this currently the a to

over to remainder $XXX $XXX of revenue guidance of we million XXXX a for in ahead, our of XX% of guidance confident previous year million are full of million. $XXX million. guidance year to represents from business outlook increasing an million XX% Looking to of are $XXX our Therefore, $XXX the the full revenue our XXXX increase XXXX. to This we range

every ensure one on Inspire’s each best remains and therapy. like our As that reiterate always, the I from possible that to would the to focus has outcome primary patients,

the the details into second quarter beginning capacity. get with surrounding Let's

of centers XXX implanting U.S. new XX added a we total quarter, centers. the with the During ending period

implemented analysis Now XX% new committees. additional several value ASCs of the quarter, guidance approvals from of And centers price is at centers a to of as made our centers. their increase end quarter, the required update -- we result the XX a all second the delay experienced while opening in during range, within U.S. which slight centers up

approach per existing centers focused capacity continue in to for as the growth forward. at new will access and existing at was the and quarter, patient’s to field well team a monitor XX add continue expect ensure opening that significant year, during increase We the quarter. centers of balanced and between remainder showed factor provide the to benefits improve centers, patients to to accounts moving XX of utilization continue utilization the as leading that increasing can and grow we is And will our on care. greatest centers The the we to the

bringing U.S. Regarding team, we sales new territories quarter total our the XXX. the sales created to XX in second

per While XXXX. this the to XX quarter was territories ahead to of of we our to remainder add new guidance, expect during XX continued

number ending clinical of by the the adding increased also second seven field XXX. with quarter We representatives

team the on QX, first which During we our outcomes our Presidents. XX teams sales of productivity. as area includes three, and managers This of when center in to and eight sales compared ongoing Vice strong and that changes optimize upon the patient remainder in training management we implemented and the expanded scale expansion now builds our increase will the continue to quarter U.S. regional year, leadership to we to focus

a Inspire patient moves improving resulting expect procedures increased the maintaining while year from in team and on as additional outcomes. We productivity

ASCs. CMS proposed XXXX announced hospitals Turning the to reimbursement. for well as rules payment physicians and for recently as

is have for the for year. And For remain is current hospital proposed the reimbursement physicians, to increase been to news the X% $XX,XXX. slightly other that the proposed good the nearly ASC proposed Inspire flat XXXX increased, reimbursement procedures by RV use to

existing to qualified assist to healthcare newly for Paramount our is making and Our improvements centers. with growth a connection a with continues on interested improving utilization sites ability provider. setting focus at activated utilization this targets to patients

primarily sleep.com website. programs inspire effective be outreach our interest Inspire very therapy, the in continue Importantly, to through generating in

approximately the year from Of And year, the contacts. half number or these to physicians Advisor or increase The had X.X community note, We our our Program with our visits, provider. program patients the we website directly expand and of healthcare Care calls physician does intend office of their Inspire year. now suitability participation appointment patient’s process to XXXX, therapy. approximately throughout centers. to XX% many of connect for ultimately visitors our leads the over streamline was through continue For growth to physician's referrals web approximately of with ACP, to XX,XXX in and are million, patients an talk and first will and confirm receiving qualified represent which activity health the advancements contacts directly from or serves able include to a emails to these Advisor physician which technology which make not to our Care include an a ACP XXX%

a strong our on, had procedure business international increased driven quarter volumes. Moving by

rates strength units revenue a quarter X% our the outside XXXX. the very in Germany, in U.S. While of were expect results about from in and up optimistic international unfavorable particularly the throughout remain positive sold resulted three the there European In in year second in procedures of X% over decrease increased response UK, prospects, were quarter. exchange on year of have the countries, additional the after to Netherlands and completed first we reimbursement identify this additional and centers XXXX. implants we decisions. the trained remainder QX to begun sites have In other follow train past European in in We

launch level. proper reimbursement recent there reimbursement Inspire the of for France, to Following in plan of the that broader authorities country-wide dialogue with continue in determine we therapy to interim, country. we In receipt Inspire continue to the therapy have for the

about excited We have screening along our on two now with Kong Singapore reimbursement news about centers have trained which also initial patients. The scheduling at quarter. work Japan additional Further, have the procedures to Lifeline, completed their scheduled. two initial during who currently first in we in Belgium, team are continue and received cases. completing we the Austria. excited several In multiple physicians we centers, our positive remain Hong opportunity, is of the have partner, And their second in procedures also others and procedures with Japan, including

Turning next remote the has and approved of to Sleep enables the Bluetooth portal. Academy the platform, patient branded through We for SleepSync, about Meeting Medicine the management this Health platform based R&D, formally American have enabled June, been we web patient at This introduced digital a monitoring second of and year. new the by new rollout patient very Inspire optimistic in therapeutic SleepSyncDigital our plan are generation half FDA. remote remote that commercial full

We introduced MRI for use FDA of step next upgraded received new to for tool programmer Health SleepSync programming. compatibility. Later important we connects physician This plan experiences MRI to patient SleepSyncDigital month, approval become year, expands for platform patient an and expect the approval monitor and the the will with review. and with outcomes. body to to access important Last submit future our will This FDA this programmer Inspire Neurostimulator scam. allowed Inspire tool for is the we patients. that that future and provide IV head barrier previously labeling diagnostic patients some We peace mind patients over MRI Inspire Most therapy. considering XXXX. applying Inspire of importantly, concern current that all had this for this Compatibility retroactive extremity know in to only MRI been a approval device key is full-body remote with providing full neck physicians was

the for silicone based improved approval and and implantation, We term manufacturability, reliability. enhanced also received stimulation performance leads, provide new system which long recently increased FDA sensing easier

to Inspire the an V inside Neurostimulator. and the to targeting leads eliminate term, the are sensor sensing new continue pressure will Xth incorporates the we respiration. neural The on We using measure our in U.S. stimulator the for launch later design for Inspire generation accelerometer XXXX. device of Longer work

design strong approval have into and late to testing We FDA in the with confidence are qualification target current continue moving XXXX. and

conduct the and therapy. we of increase Finally, Inspire benefit who number patients continue trials to can clinical to from research

AHI working of FDA indication the with hour. to AHI per The XX an As increase we Apnea-Hypopnea to events for XXX to upper our an with events per an current up to of have or patients the example, up indication patients include have hour. Index who approved limit of is been

In the a to patients the submitting current current a XX. with a addition, Body request be increase BMI data, with will to our with of XX. to for up And patients a we our to warning carries labeling warning BMI of FDA Index up to Mass

Just growth the this reducing designation, of key accepted our patient of that inspire. education continue we expected In has our outcomes breakthrough a we momentum significant time. focus experience these our summary, week, and confidence in to support review on FDA continued with indication all physician learned changes in and business device thereby the aspects

training new centers, Our existing campaign as demonstrated investment increasing by utilization well our core call in initiatives. The in well these capacity and DTC which expansion centers. focus at remains quarter, increasing for our and second we the center continued opening as our of XXXX support

to healthcare R&D many excited both during enhancing and outcomes highlight patients about second with remain experience our the provider’s inspire achievements commitment therapy. improving extremely future the Finally, We our the patient and quarter long-term, the drive are I'd With confident over appropriate and in the long-term that financials. Rick prospect to to review shareholder place turn our call value. strategy of to for we have like his that,

Rick Buchholz

our $XX.X increase XXXX. period. million of several at second including afternoon, an over of Total of and an U.S. centers, was direct in compared second growth XX% On good constant quarter million, $XX.X X% reflects the second in price an million consumer XXXX. $XX,XXX addition increase for to US On a to generated prior the to compared decreased second new $X.X grew quarter the for the of grew implanting marketing existing due million in you, in in revenue that average increase prior the everyone. year period in million QX the The million, The year, $XX.X May. began from Thank from quarter was centers. U.S. selling X% managers. to revenue factors, sequential on basis, in of year basis, $XX,XXX increase period. The reduction XXXX to the in a basis the a in currency the the revenue outside exchange revenue utilization $XX was higher quarter revenue quarter XX% reported XX% from prior currency Tim, first year U.S. year of $XX.X while and foreign number reflects territory expanded the XX% a increased price rates. The the

XXXX. U.S. to the ASPs expect steadily into of throughout climb remainder We and XXXX

XX.X% primarily quarter implemented ASP was by is compared unfavorable increase hospital sales in during to lower due for compared of industry, which systems, second price to U.S. challenges. second various we the across which given driven XX.X% XXXX, U.S. primarily the to is $XX,XXX Asia. decreased the component higher certain $XX,XXX. to year margin and parts, As with quarter, of the a approach period, ASP The to chain the supply in current was costs prior the our ASP outside exchange the common distributor in expect in Gross $XX,XXX quarter, the rates the

timing the of this the the and second the remote, the charge remaining As the the U.S. the and half obsolescence of introduction leads the a to Tim any, on which silicone in due occur may XXXX. patient leads of product remotes introductions sensing transitions any discussed, and will of patient time. in enabled outside of new is on and The the new amount at if stimulation uncertain Bluetooth remotes, inventory charges, U.S. new leads depend and potential and both

are the $XX.X operating the guidance of our programs, Longer cost and of sales costs. with XX%. and gross levels $X.XX our compared continued the in of business. areas period, quarter of second loss full in expenses $XX.X net share due along the number average lowering net per between drive higher compared million make XX% will XX.X that weighted corporate was million of compared second expect we per to number second investments and increased key share to direct in our development the gross quarter marketing quarter to for for the the quarter XX% was reflective the be million. -- prior million the an quarter of reason, this for term, XXXX. operating of XX.X the to in to for the was the increase is approximately XX%. guidance anticipate plan expenses shares expansion was margins certain to $X.XX efforts increase to year weighted ongoing outstanding of organization, about second XXXX. return second parts, XXXX were per Net the in to to This to $XX.X third for component For of we general quarter margin prior of The our million, shares The increase of $XX We consumer loss year million. continued product as share Total the average loss growth second quarter

$XXX million. XX, Moving our cash to investments the of as and balance June sheet totaled

EnsoData volumes $XX Our the focused payments. please million position of principle the $XX opening and performance implant trends strategic strong in and initial year-to-date remain questions? us million our existing With million recent cash prepared $X the remarks conclusion, strategy remainder includes concluded. training and outlook can call of cash This increasing in and debt usage allows announced for previously to implanting confidence centers procedure growth our investment at in our us with on provide are executing centers. In year. Dylan, up the that, new you open our strong for of

Operator

from Wells of comes first Biegelsen Larry Instructions] Fargo. ahead. line [Operator Please question the Our from go

Larry Biegelsen

hope another feeling quarter, Rick. Tim strong I better. Congratulations And and Rick, you're on really

for that announced on one on two just filings you one questions me, the guidance. and the Just

increase me context does follow-up. filings, I two have and the your I you -- let howmuch into just XX. XXX And significant. sounds in mean, hand,it do. BMI the to AHI datahave It with this could submitted you put So, you and for them pretty what sounds you Do start for the And to like us? one talk, have TAM?

Rick Buchholz

We're very excited it. about

that. X,XXX we is know, in plan had we're over on to platform. continuing of at of since and at ADHERE to approval we XXXX, which which X,XXX will enroll SleepSync patients be and to that the patients transition ADHERE you data registry the ADHERE cap ongoing X.X, time part Digital As we've FDA in the And now registry arelooking over back Healthcare

is this prior very the companies of excited authorizations, And patient get other that indication. with able because data. that And the work patients who with we that would they physicians but insurance are fought what we make remember did submit upper outside we outside tell options for limit, So, to approval. have? we do patients so the we would companies, We the be insurance those we when sure always for AHI to

we thepositivedesignation came BMI good significant FDA the as AHI PMA will a already, those to the let when is And the and than FDA than about registry all are ADHERE XX. And And collected us as higher the with years back that's amount the in with data. review have know time. just we higher patients of have The data provided final so FDA's formalizing that the carry with really XX, news already over well that data the the minimizes the supplements. we of reviewed thattheseapplications and

So very promising.

If and increase target but in the general, enrollment market. the be you overall this look items each STAR in at the we offset Trial, STAR expect there's that from that other, data could XX% several our a

so by with now what's therapy And thehealthcare encouraged have And really label of we're encouraging off is these included who getting some been policies. be very can patients that.

So pretty exciting.

Larry Biegelsen

Rick. thecomprehensive for response, you Thank

You've been at And something the the there over cadence growth the thanks thatdrives [anticipating] implies XX% about slow first or the howshould and second this down question, for midpoint about guidance XX% think environment half inQX? is but Is of we half in in justconservatism taking at the midpoint. the to questions. the the

Rick Buchholz

managers. philosophy centers that our and of expansion four by toward efforts Because ratio as just like about we of maintain really focused well commercialization changed manager. additional centersas on territory six adding haven't per territory we Yes, our to continued guidance, we're our adding to

our our last us guidancefor -- was with new as And we QX from as code of have nice the adding had ability for well well we yearas two year. the as in we toincrease has normally along centers, managers, existing new the implemented this stronger that Given a confidence year, that incision utilization see that a fact rest that dedicated territory increase the -- than QX. XX a given our approach

Larry Biegelsen

Rick, I'll do more drop. Thanks sorry, expect follow that QX some to we and see for expect, year -- up, pronounced questions. you one, up be let normally taking just or like me the this

Rick Buchholz

phenomenon Yes. seasonality but have year, I we reset before years. in past as QX, mean, you've QX same the how in especially then have the throughout our yes, seen deductibles in a strengthening and we that

Operator

ahead. JP Thank you. question the line And Marcus I from Robbie go show next from our comes Please Morgan. of

Robert Marcus

Any metrics around have Maybe of how now to the there? way news into any start, any much couple national since once way about recall impacting some at again, center came, growth. the a And good you’re program, you quarters do share? year think any that your put you've the a really way national numbers? utilization, up nice to put advertising up left is metrics point, you could program CPAP it's and size to tailwind is If how you CPAP recall this

Timothy Herbert

great. Sounds

was of the higher where one opening and Let's the to very our quarter, that. phenomena which go had during was new much back been is still perform centers COVID, sites guide COVID to of in the focus but able we XX environment. the also within strong, than places really to procedures be the really physicians centers, we've utilization, opening new second and a can And previously but which driven is service the of positive by team, have

a very, bolus but The then we into outreach rotating over earlier entire program into to bit first one saw programs off quarter the very we new phenomena And driven the web the still national quarter. ever. by the week where a quarter. drive week programs, the mentioned, of for third increase price here, States. then centers in a United -- and price couple now patient the national time mentioned, programs to on, -- we rotational couple time, big go continue And little the hits pushed of we the switching we a there year, a In newcenters right? awareness, the into around have third one as pushed the The So increase as strong. second

still we website. back people So kind basal over we've but to the to a X of rate, had million settled down come

very very, to invest need help with our the connected strong driven has for that really to interest, So get to continue physicians. and digital tools in those us patients

building We be with for treat then what programs, program. really the finally just complex like the more increasing pretty sleep up a and see to driving really capacity to opening centers, physicians And we SleepSync it's new the patients. capacity. able utilization, So national is

growth. whole continue a systemic it's running so going to to it's we program so the And that have drive

them we as to the the if doing which I through part being far we in and certainly the to think that we approved it know We're a we help see As near those can recall, therapy. future, everything certainly there of patients can for their I those for do we get are environment key patients to continue any operate. CPAP remains to time but resolved we'll insurance everything providers. get don't

Robbie Marcus

one we at doc the the Maybe that many there's docs we years so they as is but utilization many they hours do this hear in love do have could checks, consistently of a down go ton who of when things only many and terms of only follow-up, a product. road, to in day. so that, the the the room still There's centers,

available much can the can with we keep system? anything how as you within think issue open should forward? procedure the capacity five How increasing up else Inspire that So, do capacity shorter the to going the about not and

Tim Herbert

down Sure. we go minutes five, from three back when I And are significant technology getting from not look if we're mean, now two and increase XXX when to went it to to, in you with we we XX. down accelerometer. able only the improved incisions sensing take incisions, a to to Inspire

significant, not an a also time, OR reduction system sensing or We that together. are only eliminating but the in improvement time all And overall pressure operating lead in has reliability.

additional to ENT thereby XX cases that can So very single capacity time significant day. in minutes, if a another reduction, and allowing down that's OR even get to to able schedule improving surgeons we be

and improve to the surgeons we of And And as well time. of technology, the with training. need just to strong therapy. proficient. experience the to procedure practice techniques, the surgeons surgical And And more outcomes reduces Inspire. become being to as get strong to themselves, improve improve to still arguments That the that they continue so better economical said, support the be the more we allocate now as percentage a the reimbursement, and in patient improvements profile able with their that there's safety greater need

what's combining everything is to capacity road. to improvements down again, So drive continue together going in the

Operator

you. from Thank And our from of the of Steed line Bank comes question Travis show I next America.

Your line is open.

Travis Steed

Thanks for taking strong Don't the finish these question the and congrats really numbers. on in headwinds quarter. staffing

quarter, month? you a So guess, where I if on utilization QX, the think of utilization month way some May, and And kind anything to would piece, color then about to different from quantify saw to of kind on early great think goes April, get on any here? June, love you July,

Tim Herbert

year half have when are of the certainly we the we had remember February, first compounded but again. normal January out COVID gets with in Absolutely. and we the talked of of Well, coming we rebound challenges so during our this QX, last it call, about the earning seasonality,

And cases of the so those working and most from of second into year April. the were of lot the and half March spent we beginning February push of of through that deferred some a the

So busy April was month. a really

sales you cycles. know don't effect I tooth see in if to So we're saw see as going the

a QX. I think from patients built up consistent amount was how coming June was had quarter the it such on out only April, of we May, of busy across pretty because it

in far second as saw performance we goes, I strong the quarter. just utilization as think

probably We X.X X.XX was to XXXX. X.X which just expect up is the significantly quarter continue. that and just of mid it utilization, what we're in from And above second

quarter board new dramatic significant the with a number XXXX. since of centers the increased second number across a improvement So of

gaining to going can of OR physicians therapy's can increase utilization. do people our kind Inspire. time. Robbie dedicate by say in that we we to the that of But this to to practice we technique we also that a do really and technology the of of with question lot confidence we're drive continue a reduced need and percent how asked about So, improvements to helping

Travis Steed

than price steadily about No, climbing, it more quarter that's X% mentioned And increase, the helpful. you. this Thank like on looks but quarter. was up you last

And that understand sure the I as pricing through how so increase to practices put price make and want the have physicians with how the and just gone you through? conversations flows

Rich Buchholz

Right, May pricing with have We on do price customers. did Xst. of hey, we agreements Travis, the our increase all in it's Rick. But the U.S. formal

the the customers will impact eventually be pay but phased will that have in quarters. price, that So all higher will several over

And in was price price we increase it of our so the quarter, second introduced the increase. when to the about attributable revenue X%

Operator

Thank from you. Newitter ahead. from Rich Truist. show go our comes I question next And Please

Rich Newitter

the Hi, taking and quarter, congrats on impressive, guys. Really thanks for the questions.

higher talk color your So volume wondering your kind continuing inflection be accounts you about accounts. a little anything here. provide in older you onboards a higher utilization they couple some relative last this to could outpatient. step around ASC from of that is Are me. even utilization bit higher ramp, potentially Really use? maybe up that was that still could a the the And you've the solid of Or starting just is little or Is diverge push the so? And contributing? to then even I if just talk might driving to that's newer a and to rates like faster in of monthly maybe that finally to had and year

Tim Herbert

Perfect.

new We're centers. quartiles, think increasing of I we're increasing all right?

in quartiles of lot to mid of are to centers a and early grow. low works still strong territories quartiles to having patients. kind And progress there's stages accounts that the field so remember their that team they deep hard And productive focus are numbers. on on higher the accounts the very can helping out the continue so new very that the utilization, and continue but really upper And go at

centers four of very So quarter quarters the we was encouraged that And our numbers very we number real where opened not especially having we previously. all a by important. that that, within saw but when a high guidance, growth across we're had

As far as ASCs, we are seeing consistency there.

the can still think away good cases I got see they're propose national of of news having they not but that a makes implants. growing a with lot that. we still little earlier of big dealing we're but the focus effect later XX% a on our exceeding in the impact bit at forward going And you of year when a is just with moving takes $XX,XXX, X% average from the now reimbursement, really were there busier overall and ASCs quite the to XX% Medicare our when in decent in reimbursement really from COVID that were up overall centers, the CMS hospitals, increase year. We're

Rich Newitter

faster in my Just I'll of previously? for following a that than on that limiting potentially other the was What much -up how And a question maybe on Thanks. exactly? utilization, the Inspire that, to outpatient, patient is just of the does factor choosing do accelerating utilization you and MRI. kind

Tim Herbert

going have find have MRI just need We they to out. that know know their to They an them. future. consistently in We're patients

And physicians prevent to as comfortable we'll back on to to patients are so certainly aware implement they're that become procedure a will that a a going move moving forward. of little positive But and comfort diagnostics, we this be now, those and be really we and that or report bit mind worrisome it's certainly more for forward. but able patients that do having think about ease of and at

Rich Newitter

utilization? And ASC

Tim Herbert

continue will grow, utilization increased especially reimbursement. within ASC to

the think and do be quarter. number grow. but the the flat getting the that is it's we ASC, continue from the We maybe to COVID a a the think to but continue to in to little COVID push I bit quarter, up increase it's with utilization cases -- expect that will has a pretty because I centers consistent. first I of impact think to going to moved XX% lot And that of positive

Operator

from next our Thank show Please Block line you. comes from of Stifel. the I question go Jonathan ahead. And

Jonathan Block

ad look second at And quarter. it million, believe the I XX-Q think in first XX a I the was expense XX was in the Taking quarter. the million

you similar Just how a about of where I when DTC we maybe And the balance year? plus to ramping do importantly, business then do of million track. hundred out months? we that And think XX along look for that a talk see XX the follow-up Is this a going? got type ultimately, more

Rich Buchholz

our We're spent physicians investment because increase as as the about ‘XX, good with growing margin our of low and about product. high return just we're DTC advertising making on still and we're the of in Yes, XX%. XX we of is you're centers that was right, John, million, in awareness penetration investments was seeing all an well

going And the continue in number that so because, XXX be grow increase centers. make probably continue will but XXXX. to XX%, in will to be they'll we're again, investments those XX% to we're to closer to No, XX%

and roughly Our be X,XXX centers. ultimately to goal is next in X,XXX then in

we're that R&D investments, increased going continue have projects sales numerous so a in to growing of make fact the And despite different we're our lot made our to investments development organization those because DTC. and

We have leverage model. our in shown business

So make we'll those to continue investments.

Jonathan Block

quarters. got for the out maybe first You of physician contacts. these implants think you take, the I then the I two back I stats XX,XXX roughly half threw and Helpful And give Okay. or when U.S. so Tim the some year, it to right? numbers, first of or model walk in X,XXX

there's that context implants can impact go leakage, so in differently What's to what course exist on of but in increase ahead amount some maybe where down of conversion your said clearly? talk physician maybe guys. bottlenecks or Thanks up P&L of increasingly going and So the the would that just to a ever control or from a the opinion? the does So guys dialing to slightly you tremendous have us still be to your conversion, good do?

Tim Herbert

challenges offices. Couple and our deal take Yes, have when key somebody staffing phone They to waiting bottlenecks that don't there with are call. sitting very our ENT we we good have challenges, question. centers staffing just

almost as with of commercial within sleep therapy the XX reasonable for same a of ways to within the their a grow a number scheduling requirement need a to need time. two, of need physicians. for have those period number our lot out they're we goes a physicians Medicare, the appointment who initial with the their half that's scheduling we had notable payers. years. but not patients, a contact or to and surgical patients, are the And physicians patients, cases. which getting to appointments patients the continue the within to period very last to approval of well we the technology get better most offering And frustration get find So patients specific for is Ideally Number many days, as of is two, of study two longer lot time, of busy a are work

right their tool improve is So, we need test to manner. EnsoData, to own able to we currently in patients capacity be programs is studies auto sleep to scoring tools find conducted two two, improvements work with which Ognomy studies. labs in pilot of with show sleep studies very to which to using patients those get getting a running sleep now for timely their investment out, three sleep those examples, our states Number in in using a that to are

to need improving we technology. our So keep

lot appointment. a to sure communication of appointment. in far We other have patients as get tools with them they're of texting their to coming their and as ongoing make We aware

a team conversion. of on focuses that pipeline how that exact have whole So we to that improve

step Just step. by

Operator

I Goldman the And of ahead. go Amit Sachs. Thank our Hazan from from show Please you. line next question comes

Amit Hazan

clarify have a of Just kind been couple touched to points previously. on that already

anything the the that I'm quantify know out? had pop utilization, the first previously if that can to the called with very was for some or if I be to that on about on compatible had you that do done. were one strong patients The been something it's this sideline utilization it that side, waiting talked MRI sidelines in patients some wondering were there we there the quarter MRI on when comment

Rich Buchholz

And time the that I the patients we have five the running about. something process longer work capacity, need approval, running through feel talked can than our the MRI increase because about think the amount to and four like just next that patients in takes for months the and of with it cycle previous I more that's to like we got we it's probably months. think talk probably I is we quarter,

have half in second boost those as the seen not a through potential that come process but patients be the would yet, So will of the year.

Amit Hazan

to And It little an open color and sounds situation. it happened the belabor able the second centers to was it what the then, with bit in centers we it's of already couple like XQ to just just for that resolved the price were one, but due more issue. don't weren't a centers a have that on

Rich Buchholz

that on didn't There's a going couple phenomena tell. we there different

May is either procedures. up The do when physicians during And to we QX price first as one for analysis service been value go a centers continue on rampant, we didn't and review. in provide at hospitals, and level back and were the ASC opening to have community, another sites then discussed secondly, been who that quarter, avenues one touch to or second or QX, we to a did was already when increase the do through, their had we committee COVID needed of corporate

lot get those in relatively quarter. operational a will those in the here of resolved and So, get centers up third quickly we'll

Amit Hazan

something strangely you something So through persistent. not back going centers to represented? It's analysis. how you quantify and have expect that expect many just sounds Can be might to not value you

Rich Buchholz

in but up number we I still it's a don't think of opened the single XX, digits. probably it's that significant high

Operator

show of next from Research. Nephron I Thank Chris Please comes ahead. Pasquale go with you. our And line the question

Chris Pasquale

wall and great expanding AHI have would often procedure. to terms sounds BMI still least label some jump access. in think through the hoop XX ceilings DISE a raising like there's, step at a up involvement. and Tim get One you of I to when patients of is that lateral the the BMI

the eliminating that And see importance a do it So you some how are to you of at step? thinking point? pathway about

Rich Buchholz

Yes.

for any off you with the we don't talked for that circumference. circumference able patients We is not Cause to neck collapses. the That's indicative We a a of patients side larger a going the And just the pads the of neck probability that's they high those problem a neck. AHI. BMI as know just that concentric because of complete increase to with as think DISE being previously, be First concern. screened that are other AHI, those the have through therapeutic fat the benefit be options. about increases is on don't

you is cannot when the lay hypoglossal nerve get stimulated The be you lateral collapse what wall down, wall lateral collapse. stimulation. So with

while So part a probability, to did it's indication. our note show that's but it's sufficient This patients, of warning when this. have they help not patients formal challenge a them This just a certainly BMI. blanket to going have on level a those and you upper to higher higher lock for Want those a it's BMIs. up not the worth is changing a to We be FDA that because out make to get only greater the data warning. is the

from have just a the of higher given not They XX, hey, with prevented patient are a says, a that success don't above is therapy. So on information the data BMI therapy. lot patients we of having for

to any Now, can sleep that those that and we've been like to BMI. can able that can to just FDA XX XX to patients we screening outcomes endoscopy show fact patients needs because give have in data with treat the we proper with can show strong with they the be we up says increased and

Chris Pasquale

proposed that looks hypoglossal your so, the Thanks. code and And for if included like category. about if That's a stimulation helpful. that to you bump you level was creating rules that about outpatient It X And hypothetical responding focused team a included XX% and on procedures comment on a the success in this hospital did period? request nerve was during then something just Is front, of APC reimbursement for ASC the is one the here the are thinking through. potential there? new goes common one

Rich Buchholz

is. pretty see We'll a application organizationally to what the potential good together. It's that pull

Obviously increase that but right We're positive very currently in a price at we're really price five XX% provide will a importantly comfortable getting the increase. comments impact today. really where is has point our with now on more with APC hospitals, ASC. level We

business counting through. it, the and love on need not six. So that our a we We're that on we'd fact to see come not basing we're certainly level

successful point, up your to five, it We certainly business set to with to be we're closely. but have going track our level

Operator

next show the from Thank you. Piper line of And is question from comes Mr. your Sandler. I Adam Maeder open. Maeder, line

Adam Maeder

you and puts of was the the obsolescence one outlook of up. heard could I new Thanks. flesh some if to takes talk go can about but little and then and out and that with wanted a supply higher back quickly product target just could half you there, you Two gross first detail. to the transitions charges for implied in gross questions down reference to deeper the costs for then me, margin. get gross a you bit hoping of so second maybe margin step follow margin the a see how and with you think start more just Rick chain, kind some input or XX% at little

Rich Buchholz

Sure.

there's two to there that, Adam. parts So

And the points first the XXX basis specifically around components certain existing quarter, on ago. really costs higher So marginsXX.X%, a year second primarily of due our from system, to was lower that gross for our remote, remote. the

our In require addition some to, prices vendors higher of to paying some components, purchase commitments. for higher

impact also and so of trying we're the supply hand. a And maintaining managing challenges growing. continues to from that that's a XX days at of The good daily companies a inventory strategy not had in on other basis, of chain We've but safety it balances stock, target about really have level QX. uncommon our team for case, us, inventory our similar are that closely but monitor to

as kind And of our silicone of That's your second leads, That's part Bluetooth the guidance. approach specifically specifically question. so approval and new well around as of the new dates targeted for remote. really that's the our launch the

second be these inventory will quantities going that of we the off inventory the excess XXXX, are of these some half inventory plan As have we versions. write to in quantities existing products that transition sometime we older to

that why our products, to then, longer-term, we we'll And on roughly XX% of XX%, margin lowering that that return back gross previous XX%. gross with introduce to margin. that's so And specifically that's focused we why level And for around our we're for after those as we're expect XXXX guidance just guidance.

Adam Maeder

on the color funnel? potentially wanted kind thanks would procedure questions was from predictor about Tim, I kind helpful? study. can for taking of the on of a the off called And study again, of you a the congrats trial, trials.gov to that could question that I little bit to clinical more DISE awesome you Chris' the Just then, hoping the and on so it treatment noticed guys, quarter. study is be remove objective any share And piggy there's talk much

Tim Herbert

he Jordan was diagnose that able accomplished down have Dr. an looking office his in and have is drug-induced DISE or without setting a end to sedated to we a in a sleep either in tracking a a Miller his call patients, for and be could having procedure. ENT, technique was what he awake very Phoenix, state patient physician he them way, endoscopy

and technique based to he on patients. patients And which complete then now developed with would paper that not because became awake state. interested he, an the therapy, he this technique which have his So, about respond patients published in really a the with became hundred we a predictive dimensions concentric collapse of did airway of

to now with worked prove and we we Jordan it. need says, So

already XX able this conduct a ready XXX We've I sites be So to fifth patients. activating, currently we to start. site rolling think, opening study and patients, of four are have, sites to

a intent is need The sleep the that we're go already use quickly measure XX we to already. to of an close except think take it's than I study follow XX, through. patients because airway do the a then enrolled It's patients BMI awake the normal less significant. have almost who to to patients eliminate the of that's in dimensions the data And this calibrate state. going for for operation, endoscopy

them. DISE that The responsible, which being sleep that requirement help outcomes. requires a important step ensure patient does to done. into company, strong We, require Inspire can the on really endoscopy not Here, indication proper as one patient put from It the back therapy a has the of be this. anatomy FDA for

So, if change be to going we're to comfortable a we're able with out, make the coming there. trial

with So, such really relatively going make conduct. easy for the going benefit that the and to the of a it's to that's patients, second study half really progress strong we're a throughout to year be because strong study

Operator

ahead. from Thank line question you. Polark our Research. comes Wolfe showing last Michael from I'm go Please of the And

Michael Polark

curious less what an presume no as observe the the the on for different in. to south me move Good a Tim, evening. are than spectrum. have to you XXX. what in trial, AHI up Do there say limit Thanks AHI, data, is sneaking just I'm move raising north I you you benefit the up diminishing but with AHI the Question XX? so see safety as far? the STAR than in differently. see the What reduction of example, as returns data patients folks you just is the these of you I'm suggest scale, XX frame that

Tim Herbert

to tool more. they a actually Well, want mathematical just you matter of see It's what use.

in from of and is AHI, a need, reduction AHI gets absolute almost reduction, look at resultant high because XX% they right? get XX% share where actually so absolute reduction XX do you XX% higher, halfway You I'm that's back. gets than XX AHI they If about they're If starting into, at reduction than with XX% less percent number, right? you below the better only need -- XX%. XX, reduction who the have well needs there, baseline, the tough start XX well, sorry, of criteria, you I need to only it in to actually patient be to challenge less a get because you down the talking give they get such to a have if The the because how has responder you rates, as like much a a look you

look quality is at have above pretty is what that's well. significant. you think the benefit as of about a also patients but challenging just always So real challenging, the it having data how respond dramatic XX, rates is those we showed a improvement if the life and little Because a also from AHI that bit

and these So a reduction really patients AHI significant in benefit is it's are to what going strong have really a about. all getting

Michael Polark

is stimulation there assessment It with more last permanent there in market locality accepts well. both competitor for broadly hypoglossal Thanks how perspective have with small the Germany nerve kind two country as of the just numbers. ramp curious good is That numbers taking I reimbursement? up markets, If for any you Any have of I But one. you small is color. your choices efforts country, may, small where I'm market? that. as questions. you appreciate small competition, early that share the performing is and the if on

Tim Herbert

Absolutely, Mike. very Thank much. you

Germany that's one really choice Inspire. today, in think I and there's only

Company We just be we've XX,XXX long clinical focusing And and and have to the Germany. -- they're studies that referring the efficacious for conducting data can that over gather been a viable right in show patients. in you're patients now option growing to they on safe to established

too right we are we it's the therapy So, level Germany their research and in early highest clinical again, much, But which and Germany, guidelines little now is the Inspire thank and see focusing own and appreciate we're much guidelines. of don't presence bit sure from of making on that. today. a guidelines that a in very therapy recognized alone them conducting part those But inspiring of Mike, is SX cross-functional, it's in you they're

Operator

closing conference. This back over turn you. like session Herbert Thank to concludes remarks. now it the Tim Q&A the for to for any I'll

Tim Herbert

continued want to over, our but Asia. in joining remains business element success. I minutes for employees and efforts focused coming as outcomes. as all and to And further patients now and continued grateful the we're am the hard as as Inspire team's to team growing expanding unmatched the consistent know the y'all for successful and commitment to I of on their Inspire The dedicated for work, much. achieve to very the Europe, you we is in thank our today. U.S., most important I their thank Thank always, motivation remain patient well wish of teams employees healthcare our to call I enthusiasm,

with we healthy. look For of all safe updates continued the Please your stay and of Inspire, in to you support appreciate interest ahead. on in the months providing forward call, and and further

Operator

conference concludes call. this today's concludes This

Inspire Medical Systems (INSP) 3 Aug 222022 Q2 Earnings call transcript