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Inspire Medical Systems Idea Proposal (INSP)

Inspire Medical Systems Idea Proposal (INSP)
 

Can Inspire execute on its commercial expansion initiative to accelerate growth or is its implantable therapy a niche treatment?

Report Available: December 10, 2020

 

Blueshift’s initial research found INSP working to accelerate the use and adoption of its Inspire system for the treatment of obstructive sleep apnea (OSA). Direct-to-consumer advertising, increased physician outreach and sales efforts, the addition of new treatment centers, and increased reimbursement coverage are all being used to expand the commercialization of INSP’s unique implantable device. The system is used primarily by the 35% of patients who fail with CPAP. Successful execution of INSP’s expansion initiative will require significant patient and physician education to move the Inspire system beyond its niche market position, while also navigating the resistance to the high costs related to the device and associated surgery.

 

Observations

  1. INSP offers the only FDA approved neurostimulation solution for moderate to severe obstructive sleep apnea (OSA). The Inspire system is a minimally invasive implantable device. It is a closed-loop solution that continuously monitors a patient’s breathing and delivers mild hypoglossal nerve stimulation to maintain an open airway.
  2. INSP’s Inspire system was approved by the FDA in 2014 and since then more than 10,500 patients have been treated with the device. Since INSP’s IPO in May 2018 the company has significantly increased reimbursement coverage from 2 million to 207 million covered lives and expanded its Medicare coverage to all 50 states. With this strong foundation of coverage, INSP is expanding its commercial efforts to drive continued growth and utilization of its Inspire system. INSP has expanded its DTC advertising, added new sales representatives, increased its physician training, and added more surgical centers that can perform the implant procedure.
  3. According to INSP, the TAM for its Inspire system is significant. Annually, approximately 17 million individuals in the U.S. are diagnosed with moderate to severe OSA. Two million of them are prescribed a CPAP device, of which 35% or more (700,000) fail or do not comply with the treatment. INSP estimates that 500,000 of these patients are candidates for an Inspire system which creates a market opportunity of $10 billion. (ASP for Inspire, including surgery, is $30,000 to $40,000).
  4. INSP reported strong Q3 performance and made meaningful progress with its commercial expansion program. Revenue increased 72% YY to $35.8M, fueled in part by a backlog of implant procedures postponed due to the COVID surgery restrictions. INSP opened 42 new treatment centers during the quarter, bringing the total to 370, and it plans to open 28 to 30 more in Q4. Seven new sales territories were added with 6 to 7 additional regions scheduled to be added in Q4. Two national contracts with ambulatory surgical centers were signed and addition insurance coverage was obtained from several commercial payers.
  5. Blueshift spoke to two ENT practices around Philadelphia that are offering Inspire to their patients who fail on CPAP devices. Over 20 patients have received the Inspire system at one practice and all report high levels of satisfaction. The other is a new Inspire provider and its handful of patients are also performing well and happy with the therapy. A GP in the same area said he has referred hundreds of patients for sleep apnea treatment over the years and only one has been prescribed the Inspire device. He said the patient responded positively to the treatment after they adjusted to the discomfort from the stimulation and are now highly satisfied. The source views the device as a niche treatment that will move into the mainstream as its science continues to improve and its prohibitive cost declines.

 

Will INSP’s commercial expansion initiative accelerate to show meaningful growth? Can INSP capture a significant percentage of sleep apnea patients who fail on CPAP therapy? Is INSP’s TAM realistic? What headwinds could slow INSP’s growth? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: ENT doctors, Sleep centers, Sleep apnea device sales channel, and Industry specialists. 

 

Companies: Becton, Dickinson and Company (BDX), GE Healthcare a subsidy of General Electric Company (GE), Inspire Medical Systems Inc. (INSP), Philips Healthcare a subsidy of Koninklijke Philips N.V. (PHG), and ResMed Inc. (RMD)

 

Research Begins: November 16, 2020

 

To see other ideas Blueshift Research is currently working on, please click here.

 

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