Inspire Medical Systems, Inc. has reported financial results for the quarter ended September 30, 2023.
Recent Business Highlights
- Generated revenue of $153.3 million in the third quarter of 2023, a 40% increase over the same quarter last year
- Achieved gross margin of 84.1% in the third quarter of 2023
- Reduced loss per share to 29 cents compared to 60 cents in the prior year period
- Activated 62 new centers in the U.S. in the third quarter of 2023, bringing the total to 1,107 U.S. medical centers providing Inspire therapy
- Created 13 new U.S. sales territories in the third quarter of 2023, bringing the total to 274 U.S. sales territories
- Surpassed 50,000 patients treated with Inspire therapy
“We are pleased with our strong performance in the third quarter, growing revenue 40% year-over-year. Our growth continues to be driven primarily by higher utilization at existing sites and was complemented by the addition of 62 new implanting centers and 13 new U.S. sales territories,” said Tim Herbert, President and Chief Executive Officer of Inspire Medical Systems. “During the quarter, we achieved several important milestones, including surpassing 50,000 patients implanted with Inspire therapy and we also made significant progress with market access by expanding coverage policies with several large national health plans to include our recently expanded indications.”
“Early in the year, we implemented a pilot program regarding prior authorization submissions by our customers, and in tracking the results of the program, we observed a decline in prior authorization submissions for patients seeking Inspire therapy,” continued Mr. Herbert. “After recognizing this trend, we reinvigorated our efforts to facilitate patient access to Inspire therapy by more closely engaging with our customers with the prior authorization submission process, including involving our corporate prior authorization team to assure consistency and accuracy of submissions. These challenges had a short-term impact on the number of implant procedures early in the third quarter, but the increase in patient prior authorizations at the end of the quarter reinforces our confidence in the fourth quarter and beyond. Therefore, we are increasing our full-year revenue to be in the range of $608 to $612 million, up from $600 to $610 million, representing a 49% to 50% increase compared to 2022.”
Third Quarter 2023 Financial Results
Revenue was $153.3 million for the three months ended September 30, 2023, a 40% increase from $109.2 million in the corresponding period in the prior year. U.S. revenue for the quarter was $147.5 million, an increase of 39% as compared to the prior-year quarter. Third-quarter revenue outside the U.S. was $5.8 million, an increase of 99% as compared to the third quarter of 2022.
Gross margin was 84.1% for the three months ended September 30, 2023, compared to 81.9% for the corresponding prior year period. Recall in the third quarter of 2022, we had inventory obsolescence charges associated with new product launches, which negatively impacted gross margin.
Operating expenses increased to $142.4 million for the third quarter of 2023, as compared to $106.6 million in the corresponding prior year period, an increase of 34%. This increase primarily reflected ongoing investments in the expansion of the U.S. sales organization, direct-to-patient marketing programs, continued product development efforts, as well as increased general corporate costs.
Net loss was $8.5 million for the third quarter of 2023, as compared to $16.8 million in the corresponding prior year period. The diluted net loss per share for the third quarter of 2023 was $0.29 per share, as compared to $0.60 in the prior year period.
As of September 30, 2023, cash, cash equivalents, and investments increased to $467.2 million from $451.4 million on December 31, 2022.
Full Year 2023 Guidance
Inspire is increasing and narrowing its full-year 2023 revenue guidance to between $608 million to $612 million, which represents growth of 49% to 50% over full-year 2022 revenue of $407.9 million. This compares to the prior revenue guidance of $600 million to $610 million.
The Company is maintaining its full-year 2023 gross margin guidance of 83% to 85%.
Inspire is also maintaining its guidance relating to the opening of new U.S. medical centers of 52 to 56 per quarter for the remaining quarter of the year, as well as its guidance of 12 to 14 new U.S. territories for the fourth quarter of 2023.
Source: Inspire Medical Systems