Inspire Medical Systems, Inc. Announces Third Quarter 2018 Financial Results and Updates 2018 Outlook

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MINNEAPOLIS, Minnesota – November 6, 2018 — Inspire Medical Systems, Inc. (NYSE: INSP)
(Inspire), a medical technology company focused on the development and commercialization of
innovative and minimally invasive solutions for patients with obstructive sleep apnea (OSA), reported
financial results for the quarter ended September 30, 2018.

Recent Business Highlights

  • Generated revenue of $13.1 million in the third quarter of 2018, an 80% increase over the same
    quarter last year
  • Increased full-year 2018 revenue guidance to a range of $47.5 million to $48.0 million, from the
    previous revenue guidance of $42.8 million to $44.0 million
  • Activated 16 new U.S. medical centers in the third quarter of 2018, bringing the total to 184 U.S.
    medical centers implanting Inspire therapy
  • Increased the number of patient insurance prior authorizations to 661 in the third quarter of 2018, a
    49% increase over the same period of 2017
  • Participated in the American Academy of Otolaryngology – Head Neck Surgery (AAO-HNSF)
    Annual Meeting and OTO Experience 2018

“Our business performed extremely well in the third quarter, which was highlighted by significant
commercial progress in both the U.S. and Europe,” said Tim Herbert, President and Chief Executive
Officer of Inspire Medical Systems. “U.S. revenue for the quarter was $11.3 million, an increase of 73%
over the prior year third quarter. Third quarter European revenue was $1.7 million, representing an
increase of 141% over the corresponding period in the prior year. Based on these strong results, we are
increasing our full-year 2018 revenue guidance to a range of $47.5 million to $48.0 million, reflecting
revenue growth of approximately 66% to 68% over full-year 2017 revenue of $28.6 million.”

“A key driver of our growth in the third quarter was the recently received positive national coverage
decision for Inspire therapy from Aetna, a leading U.S. health plan that provides coverage for
approximately 22 million members,” continued Mr. Herbert. “Aetna was an important contributor to the
increase in prior authorization submissions and approvals we experienced in the third quarter. We were
also pleased to add 16 U.S. implanting centers, an essential component of our growth strategy, in the third
quarter, as we ended the period with 184 implanting centers in the U.S. We also increased the number of
territory managers and regional managers during the third quarter. We continue to build our sales
leadership to further enhance the capacity of the U.S. sales organization in anticipation of entering new
territories in subsequent quarters.”

Third Quarter 2018 Financial Results
Revenue was $13.1 million in the three months ended September 30, 2018, an 80% increase from $7.3
million in the corresponding period in the prior year. Revenue growth was primarily due to increased
market penetration in existing territories, the expansion of our U.S. sales representatives into new
territories, increased physician and patient awareness of our Inspire system, and a greater number of prior
authorization approvals. We also experienced strong growth in Europe primarily due to activating several
new sites in Germany and with growth in the Netherlands after establishing reimbursement.

Gross profit was $10.6 million for the third quarter of 2018, an increase of 86% from $5.7 million in the
corresponding period in the prior year. Gross margin was 81.1% for the three months ended
September 30, 2018, compared to 78.5% for the three months ended September 30, 2017. The gross
margin improvement was primarily due to an excess inventory charge related to the previous generation
neurostimulator in anticipation of the U.S. commercial release of the Inspire IV neurostimulator that was
recorded in the third quarter of 2017.

Operating expense was $15.2 million for the third quarter of 2018, as compared to $9.4 million in the
corresponding prior year period, an increase of 63%. This increase was primarily due to larger employee
headcount associated with the expansion of our U.S. and European sales organization, as well as
increased marketing and general and administrative expenses.

Net loss was $4.7 million in the third quarter of 2018, as compared to $4.0 million in the corresponding
prior year period. The diluted net loss per share for the third quarter of 2018 was $0.22 per share.
As of September 30, 2018, cash and cash equivalents and short-term investments were $120.4 million,
compared to $16.1 million at December 31, 2017.

2018 Financial Outlook
Inspire expects full-year 2018 revenue to be in a range of $47.5 million to $48.0 million, representing
growth of approximately 66% to 68% over full-year 2017 revenue. This compares to our previous annual
revenue guidance for 2018 of $42.8 million to $44.0 million.

Webcast and Conference Call
Inspire’s management will host a conference call after market close today, Tuesday, November 6, 2018, at
5:00 p.m. Eastern Time to discuss these results and answer questions.
Tuesday, November 6th @ 5:00pm Eastern Time:
Domestic: 866-575-6539
International: 323-994-2082
Conference ID: 1767102
Webcast: http://public.viavid.com/index.php?id=”131698″

To listen to a live webcast, please visit the Investors section of the Inspire website at
www.inspiresleep.com. The webcast replay will be available on the Inspire website for two weeks
following the completion of the call.

About Inspire Medical Systems
Inspire is a medical technology company focused on the development and commercialization of
innovative and minimally invasive solutions for patients with obstructive sleep apnea. Inspire’s
proprietary Inspire therapy is the first and only FDA-approved neurostimulation technology that provides
a safe and effective treatment for moderate to severe obstructive sleep apnea.

For additional information about Inspire, please visit www.inspiresleep.com

Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. All statements other than statements of historical facts are forward-
looking statements, including our full-year 2018 financial outlook. In some cases, you can identify
forward-looking statements by terms such as ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘expect,’’ ‘‘plan,’’ ‘‘anticipate,’’
‘‘could,’’ “future,” “outlook,” ‘‘intend,’’ ‘‘target,’’ ‘‘project,’’ ‘‘contemplate,’’ ‘‘believe,’’ ‘‘estimate,’’
‘‘predict,’’ ‘‘potential,’’ ‘‘continue,’’ or the negative of these terms or other similar expressions, although
not all forward-looking statements contain these words.

These forward-looking statements are based on management’s current expectations and involve known
and unknown risks and uncertainties that may cause our actual results, performance or achievements to be
materially different from any future results, performance or achievements expressed or implied by the
forward-looking statements. Such risks and uncertainties include, among others, estimates regarding the
annual total addressable market for our Inspire therapy in the U.S. and our market opportunity outside the
U.S., future results of operations, financial position, research and development costs, capital requirements
and our needs for additional financing; commercial success and market acceptance of our Inspire therapy;
our ability to achieve and maintain adequate levels of coverage or reimbursement for our Inspire system
or any future products we may seek to commercialize; competitive companies and technologies in our
industry; our ability to expand our indications and develop and commercialize additional products and
enhancements to our Inspire system; our business model and strategic plans for our products, technologies
and business, including our implementation thereof; our ability to accurately forecast customer demand
for our Inspire system and manage our inventory; our ability to expand, manage and maintain our direct
sales and marketing organization, and to market and sell our Inspire system in markets outside of the
U.S.; our ability to increase the number of active medical centers implanting Inspire therapy; our ability to
hire and retain our senior management and other highly qualified personnel; our ability to commercialize
or obtain regulatory approvals for our Inspire therapy and system, or the effect of delays in
commercializing or obtaining regulatory approvals; FDA or other U.S. or foreign regulatory actions
affecting us or the healthcare industry generally, including healthcare reform measures in the U.S. and
international markets; and our ability to establish and maintain intellectual property protection for our
Inspire therapy and system or avoid claims of infringement. Other important factors that could cause
actual results, performance or achievements to differ materially from those contemplated in this press
release can be found under the captions “Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations“ in our Quarterly Report on Form 10-Q for the quarter
ended June 30, 2018, as such factors may be updated from time to time in our other filings with the SEC,
which are accessible on the SEC’s website at www.sec.gov. These and other important factors could cause
actual results to differ materially from those indicated by the forward-looking statements made in this
press release. Any such forward-looking statements represent management’s estimates as of the date of
this press release. While we may elect to update such forward-looking statements at some point in the
future, unless required by applicable law, we disclaim any obligation to do so, even if subsequent events
cause our views to change. Thus, one should not assume that our silence over time means that actual
events are bearing out as expressed or implied in such forward-looking statements. These forward-looking
statements should not be relied upon as representing our views as of any date subsequent to the date of
this press release.

Investor and Media Contact:
Bob Yedid
LifeSci Advisors
bob@lifesciadvisors.com
646-597-6989