Inspire Medical Systems Inc at Jefferies London Healthcare Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Mike Sarcone - Jefferies - Analyst : <_ALACRA_META_ABSTRACT>Yeah. We're excited to have you. So I guess just to start, Tim will start high level for those in the room who aren't familiar with the Inspire story or those listening in. Can you just give us a brief overview of the company, your mission and talk about how you think Inspire is positioned to capitalize on the large market opportunity? Timothy Herbert - Inspire Medical Systems Inc - Chairman of the Board, President, Chief Executive Officer Absolutely. We're going to go back a little bit and talk a little bit about what the premise is of starting the company in the first place. And there's a numerous -- everybody, I think, is aware of CPAP or continuous positive airway pressure, which is the standard therapy for treating sleep apnea, where you wear a mask and it blows constant pressure to shunt the airway open and prevent obstructions during the night while you sleep. But we also know that's uncomfortable for a lot of people. And so while CPAP is a very effective and cost-efficient method, we needed to find a different approach for those patients who couldn't benefit from it. And literature shows it's as much as 50% of people just cannot benefit from CPAP. So that was the whole start of Inspire years ago inside Medtronic. And it was using the core Medtronic technology, which is a neurostimulation. And that's to stimulate the hypoglossal nerve, which will hold the airway open. So doing the same thing as CPAP, except instead of using pressure, we're using stimulation on the natural physiology of the body to stimulate a muscle and hold that forward. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 20, 2024 / 12:30PM, INSP.N - Inspire Medical Systems Inc at Jefferies London Healthcare Conference So after doing a first-in-man trial in the late '90s and early 2000, Medtronic went a different way and they didn't fund it. I was working on the project way back when. So yes, I've been working on Inspire since 1996. Not exclusively, but that's what I did start with the project. So after shutting it down, we worked with Medtronic to find a way to get this started again, and we determined to start a new co, a new company, and that's when we formed Inspire Medical Systems in May of 2007. We spun the technology out. We already have the technology developed. We already had the first-in-man trial. So what we needed to do then is do our secondary trials in our pivotal study to really show the safety and the efficacy of using Inspire to treat obstructive sleep apnea. Since then, we conducted a series of trials. We got FDA approval in 2014, launched the product in the United States and over that period of time, developed reimbursement, the coverage and the payment with virtually all commercial payers in the United States, with Medicare, with the military and with the VA. And here we stand today with close to 1,500 employees. We have treated well over 85,000 patients with Inspire. And we're a public company. Of course, we rang the bell in 2008, have been quite successful. And now we're just at the point now of launching our fifth generation device since starting the company. So really, what we're focused on is continue to treat sleep apnea, those patients who are unable to benefit from CPAP and providing the highest level of outcomes with a safe procedure that patients use at a very high adherence rate. Did I miss anything? Please introduce yourself, Ezgi. Yes. So I am Tim Herbert. So yes, I've been with the company since the beginning, been working on this since 1996, I'm an engineering background. That's how I kind of got into devices. I'm awkward at these meetings, so I needed a very strong VP of Investor Relations to join the company and help guide us along, and I recruited Ezgi. And please introduce yourself.

Question: Mike Sarcone - Jefferies - Analyst : Awesome. That's great. And thanks for the overview. Tim, 10 years since approval, a lot of success and a lot of growth. And when we look at the annual opportunity, we're still only mid-single digits penetrated here. So it could be a long way to go. If we look out over the next five to 10 years, where do you think US market penetration can go? And what are the catalysts to get us there?

Question: Mike Sarcone - Jefferies - Analyst : Okay. Great. And yes, the next topic I wanted to hit was Inspire V, and that dovetails well with the capacity topic. So you've already got FDA clearance.

Question: Mike Sarcone - Jefferies - Analyst : Right. I guess can you talk about time lines? I think you're targeting a limited launch by the end of the year. And what you're doing now and as you ramp to the full launch?

Question: Mike Sarcone - Jefferies - Analyst : Definitely, that is exciting. I guess one of the other things we've spoken about with this as well, given that it's a platform system is given that you only need firmware upgrades to get to your next gen, do you think you're going to see faster cycles of innovation, shorter time lines between iterations on the product?

Question: Mike Sarcone - Jefferies - Analyst : Understood. And reduce procedure time helps with the capacity issue. And then one of the other things you're working on is finding an alternative indicator of CCC, or complete concentric collapse, right, rather than having to do a DISE before the procedure, which a lot of surgeons complain about is a constraint. So we saw some data from your PREDICTOR study a month or two ago. Can you comment on the efforts you're making there?

Question: Mike Sarcone - Jefferies - Analyst : That's great. Have you told us which number Inspire device that might be?

Question: Mike Sarcone - Jefferies - Analyst : Got it. And then I did want to touch on the competitive landscape. You've been the only player in the US market since 2014. We do have a competitor who you compete against in overseas markets who will be coming to the US in 2025. And then the third competitor who announced some data recently, and maybe they're around 2026. But just give us your thoughts on what the changes to the competitive landscape mean for the market and for Inspire? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 20, 2024 / 12:30PM, INSP.N - Inspire Medical Systems Inc at Jefferies London Healthcare Conference

Question: Mike Sarcone - Jefferies - Analyst : One of the things I have heard that competitors speak about is when they did enter the German market, and we're the second player there, that they actually, by their estimates, market growth accelerated pretty meaningfully, like maybe a near doubling. Is that something you think we could see in the US? Not necessarily a doubling, but --

Question: Mike Sarcone - Jefferies - Analyst : Okay. We've got a little more than five minutes left. I just wanted to check if anybody in the audience had any questions. All right. We'll keep going. We can shift to profitability. Actually been pretty amazing what we've seen this year. I think you started the year saying you might have $0.10 to $0.20 EPS, then it went to $0.60 to $0.70, now $1.20 to $1.40, which is a pretty significant rise. Can REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 20, 2024 / 12:30PM, INSP.N - Inspire Medical Systems Inc at Jefferies London Healthcare Conference you talk to us about what's driven that sharp increase in profitability and how we should think about kind of the go-forward improvements?

Question: Mike Sarcone - Jefferies - Analyst : Got it. And I guess, we'll just kind of hop around a bit. But we talked about the efforts you're making to improve capacity on the surgeon side, but a lot of what we see are some of the best volumes come from centers where you have an ENT and a sleep doc working together. So maybe can you talk about some of the efforts you're making to improve capacity and simplify the process for sleep docs?

Question: Mike Sarcone - Jefferies - Analyst : Got it. And I think you also have some efforts around -- I don't know if I may butcher the acronym, but advanced practice program, was it APP?

Question: Mike Sarcone - Jefferies - Analyst : And they've given you the hook.

Question: Mike Sarcone - Jefferies - Analyst : All right. Thank you very much. That's all the time we have. So Tim, Ezgi, thank you for being here.