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

Tim Herbert: We don’t believe there will be a delay. We know that patients are motivated to receive therapy. Those patients who are untreated with moderate to severe sleep apnea have a significant challenge with quality of life, and they are motivated to receive therapy. Remember, we’re talking about the device replacement. And so the Inspire IV system is a very strong system, provides very strong outcomes. And also, you’re talking later in the year when we’re dealing with the high deductible insurance plans as well. So we haven’t built in any patient therapy delay into the model. We believe that the patients will continue on with therapy, and this is consistent with prior launches when we went from the Inspire II device to the Inspire IV device and, to a lesser extent, with the new remote and going from polyurethane to silicon lead.

So we are aware of that. We track that. We make sure we educate the patients appropriately, but we don’t expect to see any delay and have not built that into our guidance.

Richard Newitter: Great. And maybe just one more, Tim, you have a number of initiatives that hopefully looking to unlock some of the bottlenecks that exist and also some throughput areas, Inspire V will be one of them. We’re removing the DISE necessarily where possible with the PREDICTOR trial. It feels like a lot of those though won’t kick in or have their intended impact really more so into the 2025 onward time frame. I’m just curious what kind of threshold do you think there is? Or can you talk to us about — to give us confidence that you won’t potentially run into capacity issues before that 2025 time frame. Is there a utilization level where capacity could become a problem? And how do we think about that within the context of your initial guidance?

Tim Herbert: Sure. I think the real thing is to keep it simple, and let’s talk about the ENT service today. And as we progressed over the last several years, it’s just a very step-wise increase in utilization and the number one method to increase capacity is ENT confidence. And it’s the ENT having gained additional experience and having a strong team. So the ENT is able to do more cases to become more proficient. It takes less time to do the procedure, they gain confidence in the procedure, but it’s essential that they have a strong partnership with sleep physicians to be able to manage the patients longitudinally. Therefore, the team all know their roles at the centers and the centers that are progressing quickest with utilization are those centers that have a strong team of ENT who performs the procedure, a sleep physician who can help diagnose but can also manage the longitudinal management of patients, thereby keeping the ENTs available to do more implant procedures.

We don’t necessarily have challenges getting operating room time. We have challenges getting enough ENT time to be in the operating room to do the procedures. And we certainly don’t have challenges with patient flow. We know our direct-to-consumer bring patients to the ENTs. So we’re going to refine our programs a little bit, including the website to make sure that patients have the best opportunity and can go to centers that have the ability to take care of them and have positive outcomes and really focus on utilization, because we know the centers with the highest utilization, get the best patient outcomes. They’re more experienced. So it’s the simple things that are going to drive us in 2024, not to mention what we mentioned slightly in the call about our technology development with our SleepSync system to help the patient throughput and help the patients get appointments.

So there’s multiple avenues we’re going to go down in 2024 to continue to grow utilization. And then as we mentioned, a couple of key items later on will be removal of DISE with PREDICTOR and Inspire V with reduced OR time. But there is a lot of basic work we need to perform here in 2024 to continue success.

Richard Newitter: Okay. Thank you very much.

Tim Herbert: Thank you, Rich.

Operator: Thank you. And I show our next question comes from the line of David Rescott from Baird. Please go ahead.

David Rescott: Hey, guys. Thanks for taking the question and congrats on the strong finish to the year here. I wanted to start off by diving in a little bit into the — clarifying the comments you made around international. Kind of played in the guide this year. I know you mentioned that you take a couple of quarters to get back to some of these normalized growth levels. But I’m just wondering if growth in 2024 international markets would be accretive to the total company growth just given some of the commentary around where you are with derogation and then returning to growth levels.

Tim Herbert: Absolutely. That’s a good question. I think Germany is really coming back strong now that we’re able to start shipping product after the relabeling effort. And we know the Netherlands and Belgium are strong because they had derogation earlier in 20023 in the fourth quarter that allowed us to start shipping product there. We’re excited. We believe that France is going to announce the new coding along with full countrywide reimbursement in 2024 to be able to realize some growth in that country. So we’re excited about the lags coming up in France. We do have some polyurethane leads that we can now help deliver into the UK and Australia to continue doing implants in those countries. So we’re going to be able to get back online in those countries as well. And then we’re going to continue to work in Singapore and Japan. So we do see positive growth in the year and Rick, any more comments on that?