Inspire Medical Systems (INSP) 2 Nov 202020 Q3 Earnings call transcript

Greetings, and welcome to the Inspire Medical Systems Third Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Bob Yedid. ahead. go Please

and call. Stacy all participating for Thank thank today's in you you

the statements the those events to it's This revise broadcast XXXX. projections pleasure otherwise. cause Accordingly, only quarterly forward-looking Tim undue Federal prepared financial upon Joining filed with intention you of or statements will Chief to release as and Inspire risks future statements. assumptions. to or CEO. released live and on President various Rick should materially Herbert, copy on the our I'd months within me the Tim Exchange are SEC of XXXX our XX-Q including speaks the or any information, actual over like operational and statements XXXX. a for turn without information, XX, and report my these the involve financial Tim? today and the make of on [ph] statements the risks in financial financial uncertainties today, These and update differ. Herbert, any Commission, that because See Financial call, and A forward-looking this the of laws. Earlier All year Securities Form outlook, ended website. September for by to remarks, the Buchholz, place of X, Officer. that Executive improvements meaning Securities on to investments pandemic, available today, these estimates call effects or remind as results limitation, including results reliance business, material Inspire events press based forward-looking with not contains and And results you call financial of description three disclaims required could in filings current and management full nine law new is Chief and and Officer; December are conference our COVID-XX market operations, with time-sensitive or continued condition, uncertainties. access company's except obligation, whether

Bob. in very Thanks momentum with quarter our million, Inspire and of an revenue worldwide you, resulted an of in am third end worked how update. of business begin reiterating, proud to generated increase the XXXX. XXXX. is have today third how to for Thank the hard in call the thus we extremely XX% quarter I'd into In quarter we efforts quarter I and experienced all which for These like XXXX continue by team through $XX.X through of year the they third that everyone of our to XXXX, business far expect joining XXXX. the the strong the of of third challenges compared

previously and not due included of the fundamentals the our scheduled third the drove foresee throughout that patients rebound COVID quarter level sustained the this in momentum. of Our with combined quarter to core implant, high pause of procedures business, was the delayed we but strong and in for any continued do enhancements our

and to of and all rebounded spikes. most continue diagnostic we flow, the have adapt implant beyond. business COVID safe continued back the with operate identify monitor recent pandemic and and hospitals continue and activity health the pre-COVID to and team, care to has stated, during patient methods the patients are Inspire treat our Importantly, evolving levels is impact Simply always That need. conditions and especially providers in said, the to to

$XXX us revenue our including remainder this the the $XX critical and that drives in the are our guidance factors implant confidence primarily million which our million, indicative but during increasing suspension With in an XXXX following are for is the remainder impressive truly seen those core quarter of $XX multitude with of not procedure mind second year. our million patients activity and business guidance our our of of for in million positive third the of XXXX assuming the it year period. a to undergo normalized development confidence have of cases. groups we their We this forward. during the is of date success, Each patient continued provide is in who full and the the and prior are performance These operations, beyond focused and our our Inspire unable to we for to planning groups However, forward Therefore, from to pandemic our strong pandemic. quarter outlook increase $XXX four of previously the continued results. business discussed to our these between of results preparation on trends business

Let's the quarter. details the third get in into around

outcomes remain we'll our are First assure their with different level. an a to and required outcomes has and further drive everyone are and best safe globally. is Inspire and foremost, and technology, will attention development on and patients ensure to the patients on patient the which track the all digital highest individual our consistency capacity. therapy. productive of that efficacious outcome focus to each that care provide consistent patients at We know be tool Beginning remains and the Later update possible help clinicians from

We in ended earlier new the centers the we or of with we carried favorable ASCs increased reimbursement to adding total we our focus XX is schedule quarter, the guidance This more total not XXX. of added in to to but that To able environment, and centers signed identify Driven implant of that XX United procedures. and all quarter. ambulatory surgical XXX from year, contracts our can made centers third understand U.S. were which quarter, we working period on further drive focus third implanting quarter. in several will the ENT and end centers, by up over groups, per open have of our of Partners nearly have with into XX UTM U.S. we above these the is planning we International quarter. the a on certainly Affiliates, corporate well the capacity. had Surgical ASCs national represent which these, not at prior with Surgical two second of date, we At the XX% quarter end the third Care procedures the planned the the collectively Since ASCs sites to new over open up XX% second ASC adding During

said, stand-alone our XX XX guidance centers adding We opening other our adding centers. XX open focus new well to are to toward not as opening of that XX of national quarter new new continue are accelerating to the losing increasing prior fourth on will efforts as the to With in and groups, ASC we centers systems. our hospital compared our ASCs, guidance

Regarding seven the sales We the in territories our created sales team. new third quarter U.S. to XX. total bringing

slow territory to period we managers shutdown during our we reminder, ensure not resume. position cadence the a strong did of are that were to a cases able in hiring As once

in recall You second will territories opened we quarter. the that nine

From have manager will continued third with XX number XX. regional managers, the the territory the clinical We with quarter as increasing of as field ending also ending well a representatives perspective third quarter quarter. fourth and six impact will our positive to growth. new territories continue long-term on in we cadence to sales to opening seven new This in have the target territories continue centers

for patients, in key remains our most this awareness the review core from a we is objective of activities. quarter, the new educating us initiatives what direct-to-consumer of critical stay third As to active as creating some

year. impact that the in during quarter, COVID of will our is focusing smaller the we recall after of and TV You half larger the markets on markets in initiatives latter the second resumed earlier radio lessen

to also our tools utilize physicians help connect many and patients to using telemedicine. in and We continue with virtual website cases

of nine first year-over-year. our is was million, a XX% the XXXX, visitors website X.X which the over During months to of number increase

with over Moreover conversion experience the appropriate the results a we'll care XX% program addition, the concept contacts quarter to to The established call were percentage of In Adviser assist Inspire the in expand called and out we care which via turn reaching expanding Inspire We fourth XXXX. of increase into the based our website, to to in health continue physician primary rate needs, Care their an in care patients health center provider resulting positive year-over-year. order XX,XXX the our continue on increase connecting in providers robust the and implant program. representing improve during should is -- adviser adding overall specific continue purpose patients program to

In of fact, by the the reimbursement. program we Switching expect the end year, of to to next to our gears centers. available be majority

local around Medicare X%. aged between cases. balanced patients. cases in good XX Medicare commercial saw commercial of third for noted now XX% that Medicare third decisions XX% approximately are Medicare VA we positive We represent in quarter, experiencing all very in continued impact or was uptick cases the to a military very place we all spitter states. LCDs In coverage and And cases. quarter, In quarter at cases. third were growth are at the Meaning, in and continued the The

added commercial we we compared XXX date, third remaining year On over Florida Anthem. others. have lives policy commercial XXX the several among to including large a Blue and ago. The representing positive million Shield Cross Blue the Blue last quarter policies front, Humana, million is To in Minnesota payer policies covered

investigational third this necessary. did as During and to label quarter, policy and change review published they continues Anthem the medically as their stimulation not their annual update hydro not

decisions Medicare of commercial covered. Medicare, Medicare have For Anthem Advantage coverage the who LCDs and patients are positive they follow therefore or

were conduct in Evidence said took publications cells Inspire did manuscript there interpretation Street including and that trial clinical that safety That assessment of Cross were randomized Anthem be clinical several therapy a trials Inspire included Blue review, clinical of is European new and were continues publications an Shield being shortly the which a will XXXX. While data published the the different is that technical conduct not internal and early prepared. for from Blue they a several additional on to contrary there technical conducted to efficacy

and Anthem the authorization will therapy annual and the Anthem continues And to them look encourage approval continue rather to to patients conduct next Anthem Inspire the then, approve provide to process. Until time approval until with continues wait interim rates latest patients an to evidence review. than for clinical We the under prior for improve.

XXXX to In XX% XX% days time approval in to days. is XXXX, fact average XXX and compared in in in overall and significantly XXX improved is approval patients for XXXX. XX the has This in days Anthem to-date the XX% rate

is attributable prior authorization regarding to significant approvals patients COVID to endoscopy Looking who this XXXX authorization in reimbursement submissions. in submissions quarter, to at metrics, XXX third compares and quarter XXXX quarter submissions third authorization entering the XXX due as their well also the second The both patients our is as the This This news suspended new year. team internal sleep of the broader procedures prior prior process. growth supported have in the positive.

X,XXX fact received the approvals XXX In the in the second quarter to XXX quarter in third approval compared year. patients in XXXX an of quarter and third approvals this

rates We growing days the insurance is the have of to days approval mid-XX%s large for experienced improve from time policies. These XXXX. and further rates to insurance and to median an approval approximately continue in increased XX XX now the due down commercial in number

next the the The in As results The the or American step Category an facility the with Academy announcement for base CPT RVUs, Society Inspire as working that said payments to the with regarding were compared call after to therapy, to long surgeons have meaningful to was I news XXXX tend physician average overall and we switching improved will is perspective, these coding long-term this The the code them has to ASC, this CPT procedure. convert coding, which we been nerve for pressure AEO new XXXXT value code submitted vagal Units are payments for metrics payments, of continue have entire will Remember and a X.X lead. this new The Inspire connection code AAO a been that per our given associated a code. will of the From sensing code to these already significantly implant in third national of meaningful the code Relative sensor the Association, the officially work The the process initiated. with of code in adequately neuro-stimulator, American Therefore, up In the midyear for for in this ENT new In for or Inspire lead, I all-encompassing be not significant of the need and Medicare $XXX. payment CPT $XXX will in is reimbursement published new Category Medical hospitals determine last our stimulation which a of surgeon policies for work the reimbursement, proposed payment At reimbursed. a Value the average not and surgeons the of intend of survey for the environment XXXXX for shared stated, base or ASCs. already will include on $XXX the hospital be then Medicare the the XXXX. January be going on the system not proposed tech we released to rates approved code X.X new hospital code Medicare to the available Inspire the with is XXXX. as reimbursed of the is was and we've XXXX Category that the the commercial Inspire change the payments a progress facility the the and tech the III the for the with this over use payment results AAO Inspire and XX CPT Inspire create less ASCs. Otolaryngology good report the reimbursement forward. again, Medicare first code. Physician has to procedure but Medicare October the the felt for codes, and $XX,XXX an implanting an to are additional Category And previously evaluating process, become procedure was increase the $XX,XXX with to existing business procedure. system. around XXXX XXXX and AAO new will stimulation base quarter of end times by Medicare the Meeting Staying increase from sensing an the to $XXX times do III code likely interim, reviewed and

for ENTs Category to Finally, frustration. diagnostic reimbursed the code This I AAL for this will reimbursement sleep been the this improve resolve ongoing procedure also received or to new an approval for endoscopy. a drug-induced also new has challenge get code dice and

Okay.

we progress quarter very approval plan the with Netherlands. to also more expect XXXX. areas due pleased particularly third spikes the Like and which was the for COVID patient several agreement, Europe reimbursement had cases we Europe on. in in with level anticipated. the learn had than receive have the continue year-end implant solid Germany of again quarter to about to closely first the by strong by cases flow in backlog continue therefore also but we Welfare. in which expect assuming suspended earlier procedures. We inspire proposed fourth and Moving to were regulatory continue a Australia, Labor in COVID, we experienced operations. and to have tracking we as during driven U.S., in Japan, quarter have establishing the MLHW a This strong normalized are impact group To-date, a in not against scheduled remains under Europe, had are these we of making discussions to Ministry is and a and work, distribution progress and in dialogue In Health

adolescents Australia have in to is therapy in is and under by be thereafter. for continues expect the ongoing We launch process The progress. and for Medical reimbursement our XXXX Australia during with reimbursement committee. study syndrome application applied we completed Service Inspire to anticipated clinical review Advisory to the Further, down

In and from additional study fact, support National the clinical the received to to include expansion Institute endpoints. of patients, of recently grant centers, Health we the a

are we with centers educational to in in system Earlier continues launched the to app patient quarter invest R&D as a patient project, cloud-based this in to expenses of as we progress platform. smartphones year-over-year enhancing our management tool. Inspire U.S. technology the Cloud the Okay. of the who the an The and addition number Inspire significant and tool. continue this Europe, in second Switching year, on our Similar using first we our increased third quarters, gears again.

clinical version quarter to with Inspire from The and released was the second and patients physicians collect app the the of third data Cloud, allows in interfaces directly.

digital to with The continue of development. functionality between and app long-term tracking the app and any of are enhance establishing monitoring project just with this Cloud health activity We interconnectivity as platform overall to Inspire device our a first steps their plan the care patient use. our part in in the by improve outcomes and provider, issues adherence, patients for

remote fifth-generation programmer, the active activity which for continues. Neurostimulator have physician the projects patient will also Bluetooth-enabled. We be and our to Longer improve the Inspire term, control, design

Inspire regulatory effort a multiyear we As to X a will anticipate develop obtain the device, this be reminder, and approval. that

patients, We conduct including the is feasibility in trials In that remain our activity assist X rate, simplifying of the expect growing neurostimulator which several therapy and the implant of of continued summary, the well R&D advancements system, are further technology it evidence all on We conversion will reimbursement innovative we support improve on innovations, will Implant our positive with we continue positive Inspire their further our progress performance Inspire of achieving they highly the development and upon trends positioned and clinical in in that there momentum therapy, decisions, build to utilization areas as procedure. key business. make remain the state-of-the-art journey. to and body investing of a Inspire coverage recent and believe platform. improving significant focused

ensure call that, right prospects to for that Rick plan and the his review are the We place like are we in confident financials. detailed turn extremely of to to With long-term future over I'd excited about have our our success.

Thanks, Tim.

in strong shutdown third revenue Total European and physician million, third XX% to the core once prior business was was $XX.X increased revenue the a to with pandemic the reverse, noted, $XX.X an through the we $XX.X our $X.X diagnostic submissions. the million million authorization third extremely prior XXXX. grew quarter COVID-XX XXXX million, for the increase year our contacts, XX% increase quarter the As implants quarter, In quarter of from third procedures, XX% from $XX.X pleased period. from restart U.S. the the generated increased in Tim as in are of revenue the of business, million.

to third was favorable average by exchange the driven primarily quarter period. prior European $XX,XXX $XX,XXX, foreign selling year The was was which in higher in $XX,XXX ASP as the The changes the with in was during third U.S. XXXX. price Our compared the consistent ASP European quarter rates. of quarter, currency

margin cost XX.X% was compared was third direct-to-consumer gross year Our prior contractors. as the the which period. XX% in increased as million, organizations, This prior improved primarily quarter due the The year programs, marketing of led these Total European well $XX.X guidance third cost solid our guidance increase increase efficiencies costs. of the gross were improvement the as to increasing XXXX. U.S. be our to the expansion due reductions XX%. development and to to to sales to expenses our full are compared compared of Based in range the of and XX% primarily on third general efficiencies quarter yields, and quarter $XX.X efforts manufacturing XX.X% and to in to to of continued million in XX% product corporate an we with third-party operating for was XX% ongoing reductions, margin

achieve quarter earnings and is commercial call, operating in our our development consistent plan on our expenses continued initiatives. during As of increase focus investing we to in growth second and the said reflective

in the compared share quarter the Our $XX.X net to quarter year. loss same million the XXXX $X.XX quarter to $X.XX share net diluted per of compared third of per per in loss last The was XXXX. $X.X period third was share for third the million for

sheet. balance the to Moving

position. We solid continue to cash maintain a

average number XX.X average was As million. number third shares and to the our approximately existing weighted us cash outstanding flow of new training million. and cash growth on shares of continue and investments be that the quarter fourth quarter the September implanting XX patient executing centers. The for $XXX.X centers for our of million. totaled opening strong weighted of anticipate increasing will We The XX, allows position strategy at

As increasing centers, our immediate our spikes key recent and assuming strong have growth. to our long-term to positive our especially full the the provide to monitor $XXX COVID $XX to outlook million with but pandemic, the third revenue while million, this not In implant the stated of in remains have With strong operations, XX% to earlier, seen quarter continue for performance metrics year which we within $XX normalized suspension and any business between us and impact in the in represents the XX% over and remainder million our of year. XXXX conditions implanting year growth well we we from cases. ongoing business are mind the confidence with normalized trends are the Therefore, achieve throughout full to million $XXX significant positioned XXXX revenue. summary, guidance we of

you We continue are extremely questions. executing our call excited performance third could concluded. prepared open growth please pleased our on that the Stacy, and for remarks quarter are up to strategies. with are our With

you. Thank

We will from Instructions] [Operator now a JPMorgan. comes conducting Marcus session question Robbie go ahead. with first question-and-answer Please Our be

will Well Great. And quarter. done. say on I a phenomenal congrats

you, Thank Robbie.

that questions my your some to of it's Centers percent really $X.X well guidance center rather clear close just I here. over reps case quarter. expectations, the just more just centers annualized so. even doing think procedures is annualized range, question. better into in $X.X to bigger more both doing million in I'll each above math came the ask are or one get revenue were revenue doing in It's of fourth more my upfront million It adding and $XXX,XXX revenue than to rest

you're you drive maybe are DTC some of your where go? And in penetration really there your and could how And your everyone to curve? if is much the more quarter appreciate. of what's of light just wrap I hoping you But today How impressive of fourth here terms will more third I think I going what side imagine there you give a the can us people is? say Thanks. in patient such deeper center understand will which is deep to year-over-year? us you you So, in was go? yourself advertising accounting on looks could much doing to quarter see on where conservative help in growth still how the

business that it's Very postponed; and process think shutdown staff their the period we and of as the sleep was and COVID; centers because postponed and three the we conducted as how including previously to good. two to the Well, website. and frustrating remain about one communicate because group first continue to motivated unable were of patients. schedule are the that was during with the patients the talked cases; off, have unable and was I team entering that endoscopy that When just group come our those group physicians were those had procedures unfortunately also the their very our our fourth that four procedure and just groups to group dicer the

those process. drive continue all We to

We continue territory managers. hire to

open new We centers, quarter as forward. continue mentioned, that's opening open quarter, second we in carrying forward we to has do we in the the as we certainly still work another can the albeit them that third but and prep move them -- for couldn't

-- have patients that We of they're to back in. buckets completely not ready are in the all patients cases who patients. including still through not We postponed have first have their worked just all group come

We it economic to it is came had an hospitals sleep patients Inspire centers, this to for managers ASCs these as through as procedures get these to some up our other of our whole procedures Hospitals in continue them therapy to are have process Inspire. staying to able on groups closely. benefit patients. there's But opened group. apnea, down and and to rare certainly territory scheduled. track looking are really focused So, We up open priority so of a we're of through the procedures. side all motivated get is working really patient perform and build procedure keep they're get four but to in our to Yes, going motivated and a take then that we're we the still

direct-to-consumer. what continued We advertising. through quarters. defer we patients. and But in We we about did continue him our continued let to spending here a our to our for with the to third second little talk started Rick I'll in and bit we direct-to-consumer and call minute center a communicate

So, We utilization did yet. reps to are at hospitals? improve penetration this No. new our provide at for incentive sales with centers. we grow existing level a year Not

Now we at existing want balanced growth, past utilization our balance. comes of Rob from our increasing from we as and but talked comes in maintain of growth centers, the XX% new XX% importantly opening more growth our we to centers that

can to the So, an generate center. implants individual revenue we these maybe at our able surgeon a improve provided able be and drives add for be which that per capacity to a sales territory manager also continue to the reps second new to number to incentive add scheduled centers of get course cases of

another consist far patient to So, as implants. we as helping go centers gear more higher perform have level and utilization

there. Rick to Let me over go

want to You comment on DTC?

Sure. Yes.

a that third direct-to-consumer during were and we recall bit efforts markets And did held the and that continue little were quarter. as beginning the bit from markets end less started smaller lean more of large the to our So, first we quarter, impacted. as second the shift in to but we of in those invest quarter impacted you we forward the little back a the

DTC in specifically, the we third we -- of sequentially in on million and managers to spend the basis patient dollars by that flow. as as new XX% quarter. efforts patients quarterly territory so mentioned our Tim over $X.X we fact all increased we DTC centers a spent and we four And add just But efforts continue wanted buckets to continuing to open those support address the were up sequentially to

answer. the Appreciate Great.

Robbie. Thanks

Goldman. Next with Hazan from go question comes ahead. Amit Please

territory, talked about at different on nice at And add $XXX takes should least question sitting any many to so you're thing it, Thanks Obviously, you call very next I at of okay you today just if to kind year willing in puts could kind Street talk thought we that's hires, with congrats aspects year if of same ask could and you that but modeling. I while us progress anything through let and to be million. this early could other qualitatively the see us of wondered color stage. is that salesforce like and much seems how some business. about I just out just about things able DTC for me in at would P&L talk help the really that? the topline next you're and of much across The the give the about XXXX spend considering you're

good. Very Right.

reimbursement well it's we XXXX. positive them positive still top continue get positive Anthem, The Having really because But commercial policies. to the up to hiring Medicare, prior As we're XXXX, into other on new okay, probably far approved territories. on putting it's well. set cadence as as We'll we But, some patients be move that new we're of we're we obviously centers centers able on still are the say policy. new to having get sales authorization helps. we territories, or to that. the hiring guidance with as little of revenue I aggressive aggressive down even as all numbers to yet think, I as get opening have. backing to or process, write to disappointing, out continue a the don't see to new going seeing safe will stay with trends while the bit more that when Anthem

physician and with that evidence, to with that we sure conversion rates the something momentum Cloud we right improve move you clinical be you Rick centers digital in to adding physician, to get the really to adviser play of help there? as the our tools are the add making I the the the got care Inspire continue Additional going want think, app, us and is contacts program implant able to Inspire we addition additional putting XXXX. into to patients that

Yes.

suppliers improvement We a walking efficiencies we nice Regarding our Again, price use cost the our XX.X%. third-party P&L, reductions. in some through had had we and for products. margin, gross

gross our for And us to so, that margin. gave our increase confidence guidance annual

future. the that expect We continue to into

expenses. operating our increased have We

mentioned, on X, app. we numerous have the multi-year projects well as Cloud, development the of Tim with Inspire As project the as going Inspire

and managers, will $X.X efforts so, our we on we've add us baseline continue or going into continue done help forward mentioned, we'll we to we growth. as add territory spend past. the increase going spending current that our be will that to that's really long-term XXXX. maintain additional sustained DTC then, Tim and And think R&D, our to And run centers And the additional cadence on as and million, also, have as in

great. That's

I'll Just a me in get quick follow-up queue. for back and

as Tim, you Anthem, mentioned. Just had on

what that more like is not given curious, adopted you data pathway going you think be that's I why XX% what you hump said you it that's specific for then, do And the on over think citing to coming, one? the the share? here, something they're just you get looking decision? could you're approval that Just the on that's get forward was Did rate. that feedback to

Yes.

conservative. they're well, very think I -- the

in STAR through trial, this has public they to policy has communications. and last is their We their a understand but with been on for from is appropriate -- interpreted have what and review. and that in don't was I and study presented circumstance. we It soon. European the but pride the them read we one-on-one can only not think, have on be in we can being to which also Anthem, prepared we will been -- are yet, how allowed manuscript continue conversations, themselves being they and we pride they communicate We in written interpret completed. review thought not that they will are But this not themselves

or We have soon come that out. have coming publications already will out other several be

upon continue our build clinical evidence. we to So

to Anthem. that the to of clinical we with that having going is that just a many directly paper do, can fact, ADHERE we'll evidence we'll X,XXX well safety grow write the start the only that what That of Anthem-sponsored it's and have going we insurance, to point ADHERE numbers patients getting who of when And and will enrolled. clinical into folded that getting we're is over Eventually Registry, get on In Registry of we so give outcomes the we'll into Anthem. amount evidence, publish Inspire we keep patients. Cloud, because have. efficacy And start to patients Anthem evolving, further on higher

doing we prior to So in we're it to authorization. approval been going how keep since got We've -- know XXXX. we do

We don't that a up team communicate. very We Anthem. from how up. We have to and give strong get policy knows that don't let will eventually

Our next question comes from Larry Biegelsen with Wells Fargo. Please go ahead.

question. on the really a guys. Thanks the afternoon. quarter for prior taking congratulations echo nice Good I'll

Larry. you, Thank

long-term short-term Tim, course. question, one Of question. one

the ice. talked implant codes. on both for with and start new CPT press long-term the question The release the about me Let

at be? press You you any talked have to one follow-up. in you have can still given an point that be needs done? And talked much payment. in confident how RUV about Do how that the this about that survey I -- at this be point, the surgeon sense increase release And can

go never the XXXX, in I stimulation. and way first has with when that XX resurveyed physicians. the some we've when when I think when have a to nerve since the than it CPT base doing XXXXX, talk time, the talk all think or developed for was surgeons that that been survey. conduct it we to They revalued year less neurosurgeons it surveyed AAO been And the back was code and we of originally that was

believe we the talked about that was sensor. before always undervalued. pressure it then was outset, even the XX% So And we from

new AAO one And on serve the Inspire they when the AAO So level be the every complaint the the pretty information to skin to ENTs the were position. at when RVUs. were payment incision look level the code. skin And trained the always to number times. of they they been comfortable from conducts And surgeons that them will getting, I send from has that. than able basically reimbursement code survey; higher that they And think they ENT are calculate that specific that

of nerve that an they code think towards part be we based that to ongoing ENT surgeons with the We're that neurosurgeons, little impressed utilization share the partnership want by didn't this stimulation important and with AAO cases -- code number is the that yeah long-term. more process XXXXX very they of to that hypoglossal with So the we comfort that. can going of and they is sharing procedures very a through and on Inspire the have and with of was problem a Inspire realize have because bit because it shifting

wanted long-term stepping for of they of And to statement get today. get that So today give for understood that a them their on coding it COVID able control Category and really really through top code. they clear pushing a own and this up during challenges code there code that and isn't that to I period credit I where pathway

So AAO really took that out.

the the So to have surgeons ASCs. hospitals as benefit I long-term is that for as in going think well in both really

Tium. the have the in much the the questions. do taking on kind I'm of reduction is is asking risk guide for So last QX into And obviously for procedures, how Thanks, spike some short-term week QX, that? minds conservatism which because cases in of electric you visibility of question this week? the is on COVID investors' baked and there Thanks

will are in to all with they do to have they their have proceed I plans cases have their proper our of on we've do further. you our all must capacity continue pretty the And COVID the Hospitals meetings. what testing, to doing learned for especially staff we not COVID. to they with environment. scheduled, Safe that of to these And work capacity procedures of here's risks We're that doctors asking seen And in our case using hospitals, regional specifically have with they're operate with date. your centers suspension are continue precautions COVID confident -- And and a have procedure. have making the specifically Inspire and surgeons, be the been here you see physicians, Larry. right what have you followed. PPE our you and are sure to spikes sit the Thank opportunity we manager and asking that key. proper used

suspension So plan. build as very we remain did and so we stand a we confident not our today, into

you Thank so right. much. All

Thanks, Larry.

Next with ahead. question is go Please Pasquale Guggenheim. Chris

Can I addressed, you but there's you know very the volume Thanks, to much haven't you results. on and came the come they Tim, demand back you said quantify congrats patient already. different XQ how may still if those while you think pent-up buckets. procedures? think mentioned take a deferred outstanding from to some of well patients be left

think XQ that catch-up guidance that would think to as to benefited from? people phenomenon compare a helpful you I about XQ it be without baseline

Right.

that don't normalize QX QX. of revenue is and think So a I you a there QX certainly little bit effect bolus can between in from

impact, may a with you. hard we don't overwhelming. bit we to think I other so the think, I it did an a of process. for I little into the confidence think just the -- that patients the stressing we patients And specific have other worked it I is groups what going while was are build of don't forward have to number bring

that And while a bolus remember of also effect from new in sleep diagnostics we're in we have patients final And their their little though, get or so the yes endoscopy. patients. we bolus effect that I there growth a a is think had not post-COVID, bit to able

from and more ramp you of process quarter do the up And that procedures. see in to fourth only a only can so going many so fast you're just because so

the pipeline mentioned, a of healthy strong. we patients have pipeline we very as patients plus coming pretty of remain into the very, so and And number

Okay.

you mouth progress of by phenomenon? of So over last demand really an quarter XX this guys paraphrasing the if sounds pent-up a unusual months saying, have mostly number as really third want that like your I XX the don't put different months was to view you're but made culmination to on not fronts impacted it the I'm words what in you quarter the

Yes.

think of doing has bit the it's bolus there's as really of you element I think that little a the said work effect, an team I been but well.

of is in realistic big just site future? think many yet Do in about of helpful. talked these a accounts of sense a for Thanks. on are those those national be could of sort ASCs, That's the you then curious mean, I for ballpark how Inspire obviously percentage what targets a the XXX-plus And and contracts, guys have I you number. I'm you

of third saying responded a generally United in hospitals ASCs this potential -- past do States just question to in and to inspire had of the or procedures. kind the We've we've

and to through to step. first focus to does with process. to with Who give who's a they we I sure us national And really the the and experiences. we're these you the get first vehicle national make them of is There's formed the through need work All contracts, stimulation? because on ENT? sleep helps it marketing to okay, get do the different looking training and group of do and communicate lot running, is surgery? in going start saying think when got really might sites really computer we're get Who up a who contract and get at we those nerve and team

long, we as of could those. rough a But So pretty think I argument, be there. I'm general long-term third again, at a being

training we're about we right I little the increasing us guidance think handle at and the current being always being capacity have, focused now size opening centers. increasing at albeit our we're of a that aggressive really because cadence our increasing in opening it's centers, to our bit centers additional and more team

we're more -- we be So, in within going we're opening going cadence, to aggressive but our centers. will stay to not

you. Thank Great.

Thanks. Chris. bet, You

Newitter Next ahead. go Please Leerink. with Richard question

and for the present question, bit follow-up just Wanted ASC specifically little the context to on on of comments the taking in a the quarter. Hi. Thanks congrats utilization.

I just wondering as just the as versus sense it a up up. increases like give step utilization of XX% sizable what this growing and account is function and function us We've Your ASC XX% And can base. a ASC XX% much step it's a utilization pretty account by triple. per over despite utilization XX% you that's utilization? and heard implied big of that's utilization uplift? that was your to the traditional account hospital is my in XQ took a of math it's quarter is the looking part your And in

ASCs, applicable know what two comments X% So settings? I'm helpful seeing just wondering light if of you're utilization be be those to of you care would kind question between in it the could that bifurcation

ASCs Sure Rich. and cord that in a can't their start down done to even other we've the our my and that like place, you for friends urology the you stimulation spinal sacral to percent right working of I yet. some cases the in Axonics full of I look workdays today. Medtronic days stem really go back reimbursement don't nerve experienced Nevro. Well, impact are prior ASCs on think And at for and have in until pain new process.

able XXXX, of that we're XXXX and to now up years we're get kind so a are And that step in, to really the able locked bit. reimbursement little

APC payment ASCs now those right I but five only centers. ASCs. utilization I especially start at those further of level we to and down gives that about with Don't drive that utilization So up opening with that of as the more to-date, number for still as national payment, you're on higher you the seeing I you our the of XX% think ASCs, see well us now increased when are you total future you're surgeon an contracts number you'll mentioned And the right, see have can think road. reimbursement have exact strong

alongside we it's that. relatively right but will into the significant I improve increase think point would number see XXXX. a utilization ASCs to small, in So still goal with to move of as your more be you And

the for then for Thanks And just about your guidance that. very Okay. quarter thinking fourth robust.

momentum, why You're any in slowdown appreciate on clearly you in to not capacity your due but gave baking I meaningful the your side. COVID that for rationale

and That COVID able What you materialize? move months how thinking and continue hospitals today. world helpful. your any to better be Thanks. COVID patient into COVID as willingness what to as the is for at surges see it was will do You would these dealing be tap there? with don't But through manage we

been CPAP have the they untreated have of an is is to to patients and and They benefits people to And we've and down. stay-home-pandemic patients they've they motivated from The people apnea million sleep seeing come a severe especially find for during the are moderate use a These with learn this quality they What X.X stressed. and benefited relationships realize to of able these CPAP are not unable are but people so about all motivated be go remember amount website, is productivity to period solution alternative. and the and our people. to probably Inspire. they sustained are very find can't while, life do they want research need tried a and good,

be number get just to been haven't QX them. too patient bit again you problem are We cases great that's metal, hold longer the with educated, back their group implants endoscopy, want holdback little patients insurance have from a get in. come a go a a timid forward. little certainly to are significant patients There of up keeping and But much with communication really that number schedule had website going motivated sleep We of fine. for through motivated more a And there's we're we in a that come and patients saw going to really approved and expect think and get perspective. of don't to to they

Thank you.

Thank you, Rich.

ahead. Next question comes from Jon Block Stifel. with Please go

Great. Thanks, guys. Good afternoon.

amount jump-off guidance, guide decent fourth revenue a on implies year-over-year revenue aided quarter. I of XXXX XQ the guidance third the of to -- it in pent-up comments then of but that that I implied about XX% curious growth the First just should into And did one the more it? you Or XX% XXXX? XX% lot have deferred think we we your a when the does to follow-up. And by got around call a Tim, some some pure for just right as was XQ procedures. think not point quarter, for XQ I'm in fourth think is still quarter just maybe demand it

going question. over much demand left very a don't is That good too have to I we're QX. think after

I much the all to patients new in that's be pretty going process. or think organic

from maybe in from the fourth it the bolus think standpoint, a effect I of little so diagnostic predominantly the quarter than side bit sleep that from endoscopy the was And there's more implant.

on strong that I think characterized probably that mentioned. is the suggesting downloading, question care direct-to-consumer of our just to of our a bit to think continues the we're continues the grow, QX way setting what pipeline patients programs, focused a bolus think but Chris to keep taking general, kind we and We're And we as in grow going too and and Inspire of the having flow. I asked program and But opening little outreach spending yes, utilization. QX. care the and adviser patients of it's is with in that number place, So plan effect lot pretty app continue ASCs appropriate of you're that outcome for driving strong we'll

early, that metrics what comments centers Any on can the but figure the call or growth you're can the seem direct-to-consumer, talk Thanks the to Helpful. it. pivot, And a out. about it's Got I Thanks, side? of just just called your any your there to are seeing what or for share? centered centers from know qualitative seeing DTC line be you currently think initiatives of that I call you're you the subset that. from around center you investment are with or guys. mean I couple key on in that markets initiative? they

of patient some this will a a or that have never are in tell there by be a our call like And but contact weeks. indices I then then calls we what appointment works number, performance have mean We're not we sure is the that who in patients regards sleep qualified in key What they you first we to our answered we'll CPAP program. is Other And calling go patient, How can best expect see make physician the patient, two, to that phone. patients KPIs And of few we those XX% lot for drive it's to tried have to with need coming line will in, a somebody and questions center to advisory able a to patient we if bless in a making I period together need determine be call to an a want and sleep appointment. the that to when at or calling a they're before we phone thing can what in can there who go qualified time. yet, a would diagnosed will center the physician that? study sleep number patients ask to the if that to expect find had we out have talk live. but they and we physician. XX% diagnosed. them proper around the be to. make will is when their KPI answer served They back sure they we're help to a there. make then a that Inspire. schedule we -- appointment hot They will somebody we an They've centers care have appointment. call try make they're over a them and to to of qualified circle and certain two final knowing CPAP. are within characteristics identify of to right They've physician that sleep been Is ready can apnea expect

ENT. with them so up And the we set

the to is whole can of utilization set by quality to to improve default of we coming that an be get ENT's up the able do improve to we performance. to improve surgeon And the office, So process patients if conversion.

implant expect when days That is that sleep three out giving how OR a well day you you dedicated month. to are Inspire we centers, we OR endoscopy as The procedures. we procedures other for to as to dedicated always said training least you give two one And many patients? question at can do pose surgeons we start

As three The we implants two, extremely days year. University not Remember has can if a you grow dedicated then last they OR State Ohio month. strong. did rebounded XXX go to

centers the drive So to we our put help capacity. managers how add that and capacity incentive we there territory in now know our to for

Helpful guys. Thanks, color.

Thanks, Jon.

Bob ahead. with America. Bank of go Hopkins from comes question Please Next

thanks. taking question. Hi, Good Appreciate the for evening.

Hello.

you So kind there? of Anything patient? these just quick times is COVID an curious, anything Just here the know age if of give us update? percentage just changing Can in an I margin changing a requiring terms of getting cases these a because the it's couple stay the average overnight on of in in of things late.

to And really our get good the was easier average which enough, was age because Interesting post-market registry, the the which pivotal up XX. is X a Phase Now, reimbursement, age jumped that's to because average of study, Well, really then, the our question. it's that STAR Adhere XX. was Medicare. trial,

it cases, I I'm think at Medicare of going coming be not because a Now safe. we're We we all these are and it's a effect bit as little down. at XX% far believe, should the still near got population years. Maybe a implants, to cases XX COVID seeing little implant procedures. I'm but that bit here, up looked be get sure that the and commercial XX%, bit commercial age as back number running little reduction, there's elderly of from needs

careful And being scheduling so about they're that. are But a their cases. tracking we bit little certainly

migration few majority all are They to U.S., it in why As of a stay same overnight lends up great far patients it's the reimbursement more is outpatient our majority stays. beneficial to such Maybe surgeries. of such But That's go to hospital. it's in the in have home Germany, overnight again. have the overnight the Europe, cases in as Very day stays same the set and stays, itself the day. do that, ASCs.

Tim, then, question. other quick one And

two contracts pricing bit Or in a part exactly those of national little us on terms exactly Do facilitate and individual into to national can ASCs? of the contracting is side, a you go that set contracts? more as just means? sense the just ASC what Just give the detailed those as like what you of

Cleveland one it of do pays Alabama just in ASC, Kaiser, we everybody signed, the sleep Kaiser as the like is number Well, and price the that we and the what you're Ascension we care, health is national can contracts Absolutely. of everybody key thing at – price, pays have how the if to we Inspire hospital small I same kind Health because same how policies, that that's in a have fundamental consistency can the we we don't same or clinic, with the or care it's key or hold that's with period. Intermountain night. policy

off do everybody to their their ask discount the the are do Bob. that, it's the to center pricing, a stand or we have don't is? since And that analysis, when of value do a going for these ASCs little it is then did They value we They to to approval FDA the So And their value price. they contracts, to certainly when these course, committee sure be same contract. the when make they bit XXXX, review pricing the of when same a we worthwhile into pays. And ASCs we firm. did is thing. but national diligence. committee. procedures. And is the every able enter a national contract what It negotiate the that It Everybody got day, to pays this

And team, to that contracts Whenever go go to and understand we and have national able sure have, to strong we don't that outcomes. so when flow Kaiser or how patients the all how we the just whenever Ascension to it. hospital, go go treat be of we have other through we drive we the a make patient to logistics to to team, part hospital, and hospital, we train intermodal form ASC, need now to

will which biggest one the Great. XX months? one. all announced your Of the on next do And over guys today, of the business last you positive impact course you quick news have think the

a I good in a environment, very Being COVID significant. manage that's think Wow, question. is able to

very are careful. We

COVID, dangers PPE, and code will impact, the COVID, longer-term have being personnel yet treat strong to people I new for patients as further a transitioning to and our able still outcomes even have reimbursement, of in think All own far carry ASCs. – the of their and is recognizing Coding surgeon operate a tremendous. as

positive tremendous. and is so think policies Medicare the the LCD coverage I

matter of is we they write before just it's As you know, policy. time talked but a Anthem frustrated,

I – development. I Bob, technology what engineer, about So get what I'm then excited is our

patient tools, the really our when Cloud, have Inspire digital into Our going impact. an and release that's to going new we remote, it the is Inspire play X to App Inspire

evening. good much. so a Thanks Have Great.

Thanks, Bob.

ahead. with question Sandler. Next Adam from go comes Maeder Please Piper

guys. Hey, strong Congrats thanks on And in keep squeezing the for it me I'll one. here. quarter.

our I just I small in But Europe. the of color nicely some business, sales drove to was today. the on performance it's know get on, a in overall QX, OUS the additional number expectations. OUS what came above relatively part Just hoping nice

quarters? I much this watermark? some Thanks think should you And benefit. kind forward, just I guys. about Would mentioned off then build of in so think expect looking to subsequent guess you we price Europe how by

Thanks, Adam.

a Chris's early – Europe think had shut they I very was and QX, down back so to question on. good too.

able better patient has in the in growth. of Germany a has So building in really being our to been in said, as bolus reschedule countries little active Andreas specifically also finding centers, a Europe that his bit had set future Europe so those Belgium from team But new Europe cases. up VP and and ways to Netherlands opening improve for in flow and other effect

But international of before yes, grow think I effect, going the to means you're beyond. bolus Japan So in a improved with strong States after by And well if fourth Australia the fast changes expansion international growth. really you're quarter. have that. but right the benefit beyond X% that quarter is now talked United into that revenue strong key about bit this I we there's they as even we And little so. as as permanent the a revenue that also the going in may that to and the in to European very We and a had as and to around future reimbursement further see see Germany can it has some then think Netherlands flow really in continuing get growing hanging and adding the some in near it's

for the Tim. color, Thanks so much

You bet, Adam.

from Berenberg comes go question Markets. Ravi ahead. Capital Next Please with Misra

taking the for good Thanks questions. Hi, evening.

Hi, Ravi.

coding one on announcement the Just Tim. Rick,

I'll Then that sounds Just are change through selections come of Just to the a a rate question give us just held higher kind of benchmark. reimbursement the kind ask overall upfront. on the expecting may say in change flat. -- like -- RVU second you're it What would let's summer. But based next just my there?

mean, understand in your curious approval accounting quickly how are for of terms you spend on how being come expect you're times your to to reduced. some ROI patient of I in. Just people

up. You're prior kind for going patience insurance, your of are submitting ops

on is us spend that of help could of to Just how Thanks. related If that advertising? you kind tease out? much the

today. Well Yes, on that's reimbursement absolutely. based physician

$XXX. right X.Xx commercial sensor National for So it's payment right? that's $XXX the Medicare call Medicare. for between XXXXX, $X,XXX new the maybe the they $XXX $XXXX, now, Medicare code $XXX And better, Commercial is policies. -- now, payers. and Average to $XXX So pressure to Medicare to $X,XXX the it with That's $XXX for payers get about are

and MetCare that then between for what is and anywhere procedure. $X,XXX outpatient that they're $X,XXX X.Xx So X-hour $X,XXX or maybe for $X,XXX to a

monitor part integrity nerve. the of mapping nerves work I come do they the do we what and nerve, then looked baseline, reg So of Cyberonics rate. detailed hypoglossal to at down feel the higher then which the the place electrodes LivaNova at distal dissect branch on and right? they the for a nerve the to AAL significantly sorry will doing replace because Vagus electrodes the the is placing or the from down to work and they looked which when process that higher stim. dissecting is tracking And implant Vagus that I'm at very that Nerve the confident nerve So Nerve some in the hypoglossal compare is

digital us. we're The communicates is as move they're it tools tightly with the as But ROI, And very from key forward, Inspire getting we're up downloading coming yes, communication long-term have far that. the to that's very we watching As they're setting app immediately with a And good then view. and to on data don't a when our now our people we cloud. app and website today.

Inspire of them tracking Time we the the right, cost one care per can the streamline ways different cloud. into center can in it able them get per can cost from -- we streamline is the beginning doctor really strong reduce program to and look at to to so the of down to time. the that calls the a acquired closely, as we're patients and appointment, a per implant have the their And which of just number very to advisory we're to call, tracking per from per improve? going can We them right process, be that's as contact implant that to course And within cost call rates, start very tool conversion as continue to our their get And is and timely tracking the a of road. those you our to improve cost rates. well closely period going patient. believe know all benefit When we conversion improve

Great. Thanks detail for report. the

Ravi. Thanks,

Suraj Kalia question go ahead. from Please with Next Oppenheimer. comes

Good afternoon, on congrats Tim, quarter. Rick, the

are sir? How Good you to you. hear

implanted that So roughly if X,XXX quarter. math right Rick, on there I forgive Tim this is math? in me I wrong. suggesting or were patients the in the U.S. got The Am

don't know. I

your you Suraj? Can again question repeat there

X,XXX So right? quarter. I patients take in the the Am suggesting your around it's ASPs, implanted if I approximately roughly math,

Yes. Yes, correct. that's

Okay. Yes.

Tim, So know it's sounds this I late. and down

-- in please these approximately guess... So approvals together? submissions, the implanted. of Can help prior X,XXX X,XXX give X,XXX me, all auth I and quarter us tie so And you

Medicare prior one those don't they answer Those don't and up follow-up. Medicare of and implants. of let is exactly authorize you me then XX% remember. because our well tie math don't -- Medicare lot include a Well that

fourth little into upon So VA include over a Europe. the is approvals X, in. don't And or when don't other the careful be came to to that's some it quarter include one. going depending and those Number they key military of the carry because they will

it Medicare rough just through because should the you Tim numbers It Right. here. Even this are the take I this delta I'll and I think doesn't because dots the haven't Maybe think So missing just offline XXXX math the are maybe dots. piece, QX, add sure did have since still connected up. total total XXXX XXXX? to yet. a I approvals I'm is I roughly the but is not connected submissions have

Now let's it. go through

at got run for historical. Europe And a also XX%. that XX%. used in remember, remember, VAs you've to And XX%, Medicare. there You've factor And to used go then you VAs Remember changed. to run got on remember at XX% has

that you a moving in So you're targets of got that lot trying calculate. to

Right.

squeezing And what the for Okay. in, were the Gentlemen, congrats finally a percent great in novo pull-through Fair want taking quarter? in patients do question the funnel characterize already my of for DTC me new and was patients Tim versus and you thanks on Rick, in that? the enough. you quarter. thank spend quarter what de how to

Thanks Suraj.

the Let Rick question the have then one on me answer DTC. last the and answer

just from talked but a as first think a specific also don't over don't I on -- in court we numbers, The question early know bolus number talked we lot we the of bit little from you Ravi's well. of there's about in new of have as the well the were quarter. as approvals we about number that group from effect a the But of carried COVID. the had with as basement as patients submissions of the patients

So it was those through. fronts far very coming DTC. Rick strong all patients from as as

third spend DTC $X.X compared QX was of quarter the to our in million XXXX. million $X.X

So, very good.

Inspire all So and today. consistent achieve and in remain thanks I to and their our thank to health for I growing as Europe grateful is as I joining outcomes. well late I to growth dedicated very of appreciate a and Inspire of for our just team environment. the continued success. we successful especially in to there. team's enthusiasm, to motivation a everybody. know much. post-COVID thank in remains their you the want to patients it's element return to strong care for important most in U.S. teams in our the wish the continued The as unmatched and all patient the employees commitment efforts hard-work call hanging Hey you employees business

we and Finally call to and weeks on and support forward near very Please forward with the providing appreciate Inspire to to interest in updates talking look further your coming future. safe months. the and look you you healthy stay continued and of

This teleconference. concludes today's

participation. You may at you this your time. for And lines disconnect thank your