Dive Brief:
- Inspire Medical Systems received Food and Drug Administration approval for its Inspire V obstructive sleep apnea (OSA) neurostimulator therapy, the company said Friday.
- Inspire plans to start a soft launch of the device late in 2024 and move into a full launch in 2025.
- The company disclosed the approval days after reporting preliminary results for the second quarter. Inspire expects 30% year-over-year revenue growth, prompting the company to raise its guidance for the year.
Dive Insight:
Inspire sells a mask-free alternative to continuous positive airway pressure therapy. OSA patients receive an implant that delivers pulses to move the tongue out of the way each time the patient breathes. The pulses are intended to prevent the airway blockages that cause people with OSA to wake up to take a breath. Patients turn the implant on using a remote control when they are ready to sleep.
The latest version of the device, Inspire V, has the same mechanism of action as its predecessor. Inspire has tried to improve the product by incorporating the sensing function into the implant and providing a software-based platform for adding new features.
Speaking at a Truist Securities conference in June, Inspire CEO Tim Herbert said the device is “really going to improve efficiencies.” Herbert told investors in a May earnings call that the incorporation of the pressure sensing lead into the neurostimulator means surgeons have one less product to implant.
“We have talked in the past of our average [operating room] time today being between 60 and 90 minutes,” Herbert said on the earnings call. “We believe with Inspire V, it could go down to between 45 and 60 minutes. So a significant reduction in the time to perform the procedure.”
Leerink Partners analysts said in an investor note Friday that shorter procedure times could potentially free up additional capacity for surgeons. At the Truist event, Herbert said another benefit of Inspire V is that it “introduces a technology platform for which we can do firmware feature upgrades for years to come.”
RBC Capital Markets analysts said the FDA approval was earlier than expected, but Inspire is following the launch timeline that Herbert set out at recent investor events. Talking to Truist analysts, the CEO said “it's gonna be a seamless move as we go from soft launch to full launch, and we'll make sure we have the proper inventory levels before we launch it.”
Inspire expects its existing products to generate $195.9 million in revenue in the second quarter, the company said in preliminary results last week. The revenue growth was driven by an expected 30% year-over-year increase in the U.S. to $187.8 million, Inspire’s main market, and a 27% rise overseas to $8.1 million.
Inspire raised its full-year guidance range by $13 million; it now expects revenue of from $788 million to $798 million in 2024.
“One quarter doesn’t make a trend, but we’re hopeful that today’s print signals a return to a beat-and-raise cadence following a stumble to start off 2024 — the key to repairing shareholder trust,” J.P. Morgan analysts said in a note to investors.
