Inspire Medical Systems, Inc. (NYSE:INSP) Q4 2023 Earnings Call Transcript

Tim Herbert: We watch everybody. We know that the market that we have created and the market that we are developing, both in the US and international is quite attractive. We know it’s one of the largest markets available in the medical technology industry. And of course, we’re going to give people pursuing different approaches. And while you mentioned one company coming up, there are several others who are in very early stages of development. We’re not resting on what we currently have as technology. And we’ve already mentioned a little bit about Inspire V here on this call. But in past, we’ve talked about Inspire VI and VII and continuing to grow the indications and be able to treat other groups with obstructive sleep apnea.

Not to mention our ability to manage these patients longitudinally through our SleepSync Digital Health system. So, yes, we’re very well aware of all the competition out there. We know the challenges with some of the technology out there today. We know some may be putting out some data, and we don’t rest on our clinical evidence. In fact, the clinical evidence of our product today is superior to the evidence that we were approved on with the STAR trial. So, we’ll continue to take care of our patients and continue to do everything to grow the adoption of Inspire.

Brett Fishman: All right. Great. Thanks for the color there. And then just for my follow-up. You talked about France a little bit on the call today. And I know part of the 2024 plan is potentially securing reimbursement in that territory. Just curious if you could provide a little bit more detail on how you view the market opportunity and how reimbursement potentially accelerate commercialization into that region? And thanks so much for taking the questions.

Tim Herbert: All right. Thank you very much, Brett. I think that in France, last year, they announced countrywide reimbursement has been approved in France. And it went to the next step, which was developing the coding criteria for physicians to implement the reimbursement, and that is progressing through the system. It has not yet been formally announced yet. We expect that to happen in the very near future. We do have a country manager that we have hired. We do have a team in France that is preparing for the launch and we hope to be able to report some positive progress with that yet in 2024. So, pretty excited about France is a very significant opportunity for sleep apnea and for the Inspire technology. And with what we’ve been able to demonstrate in our growth in Germany, we believe that we’re going to have a significant ramp in France.

And then the other key area to look at ramping again, is going to be in Japan. So very excited about France, and we’re going to keep working with the authorities to get the announcement made and for our team to be able to launch that.

Brett Fishman: Thank you.

Operator: One moment for the next question. And I show our next question comes from the line of Mike Kratky from Leerink Partners. Please go ahead.

Mike Kratky : Hi, everyone. Thanks for taking the question. Regarding the recent policy changes by United, specifically on the new requirement of oral appliance therapy, do you have a sense of what portion of patients getting Inspire therapy today have not already tried and failed oral appliance therapy? And then I have a follow-up.

Tim Herbert: I think the majority of them. I think that most patients, well most patients, if not all of them have been introduced to or attempted CPAP, but oral appliances haven’t been well documented for successful use with severe obstructive sleep apnea. In fact, it is most beneficial with snoring or mild, maybe slightly moderate. So I don’t — I think the majority of our patients have not been introduced to oral appliance and probably based on their anatomy, wouldn’t qualify for it anyways or have a desire to start that because of the severity of their obstructive sleep apnea.

Mike Kratky : Got it. Understood. And then just as a quick follow-up. Are most patients able to get oral appliance therapy without going to the dentist to get custom fitted? Or is that a necessary part of the process?

Tim Herbert: That’s part of the experience is going to your to the dentist because you need to be properly fitted to be able to make sure that if you’re going to get an oral appliance, it will have enough forward movement of the lower jaw to be able to create sufficient volume behind the base of the tongue to be able to effectively address obstructive sleep apnea. In some cases with moderate to severe sleep apnea, you may have to move that lower jaw forward as much as 10 millimeters. And you can imagine that’s a pretty uncomfortable forward movement therefore, it’s pretty limited when you get to the more severe cases.

Mike Kratky : Got it. Okay. Thanks for taking the questions.

Tim Herbert: Thanks, Mike.

Operator: Thank you. And I show our next question comes from the line of Larry Biegelsen from Wells Fargo. Please go ahead.

Q –Unidentified Analyst : Hi. It’s Lei [ph] calling in for Larry. Thanks for taking my question. First, just a clarification on Q4, please. You mentioned there was some catch-up in Q4, the strength because of delays in the Q3 procedures. Are you to quantify how much of that catch-up was? Maybe $5 million, $10 million kind of number. And related to that, you also talked about headwind outside of the U.S. now. Derogation kind of and perhaps a little bit later. So obviously, that had some impact in Q4. Are you able to quantify that number? And I have a follow-up.