Q2 2022 Inspire Medical Systems Inc Earnings Call
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Your hand during Q&A, you can dial star one one.
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Let's call.
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After the Speakers' remarks, there'll be a question and answer session.
Today.
Thank you.
At this time I would like to welcome everyone to the inspire medical systems second quarter 2022 conference.
You may begin the conference.
Call been placed on mute to prevent any background.
Conference you all for participating in today's call.
There'll be a question and answer session.
<unk>, President and Chief Executive Officer.
I will now hand, the call over to your first speaker Meghan <unk> director of financial reporting <unk>.
Sure.
<unk> begin the conference.
632022.
Conference and thank you all for participating in today's call.
Joining me are Tim Herbert.
Management will make forward looking.
Looking within the meaning of the federal Securities laws.
Earlier today we.
Okay.
Were released.
Saying without limitation those relating to our operations.
Results.
<unk> financial results and financial.
<unk> is available on.
<unk> business continued effects of the Covid nine.
Our web.
19th.
Making statements.
<unk> 2022 financial and operational outlook.
<unk> with all forward.
Look in market access are based upon our current estimates and very.
Looking.
<unk>.
<unk> financial result.
<unk>.
That could cause actual results or events.
And Thats 19, pandemic full year 2022 financial and operational outlook.
Events in these statements.
Improvements in market access.
Statement filings with the Securities and Exchange Commission, including our quarterly report on Form 10-Q.
The real.
Q SEC today.
Risks could cause actual results are.
Hey.
Events really.
<unk> disclaims any intention or obligation.
Different place undue reliance.
<unk>.
On.
Update or revise any financial projections or forward.
<unk> Commission.
Looking third because of new information.
<unk> form.
<unk>.
Or otherwise.
<unk> SEC.
Prince call contains time sensitive information and speaks only as of the live broad.
Day for obligation.
Catherine.
<unk> as required by law to update or revise any financial.
Second call over to Tim Herbert.
<unk> statements.
Robert.
Statements, whether because of new information.
Hey, Megan.
And thanks, everyone for joining the call today for our second quarter 2022 business update.
<unk>.
<unk> of the live broadcast.
Eric excited to report on a very strong second quarter.
Today ill turn the call over to Tim hub.
After 3% revenue growth over the same period last year.
Thanks for joining the call today for our second quarter 2022 business up.
Air across the Med tech sector.
Do we report on a very strong second quarter.
<unk> shortages.
<unk>, 73% revenue growth over the same period last year.
This resiliency.
Here, we overcame.
T K.
So challenges comp.
This ad.
Then the med tech sector.
And supply of both finished goods and wet bar work in process.
<unk> economic concerns.
We expect COVID-19 to have a negative impact on our business going forward.
Service and commitment to the payer.
Third we continue to be able to get cases scheduled in the or.
Patients goods and whip or work in process we.
We do not expect.
Our success in managing these factors.
<unk> is going forward.
<unk> focus on executing our growth strategy.
<unk>, we continue to be able to get cases scheduled in the or.
Our set ambulatory surgical centers.
<unk> the quarter, we generated worldwide.
Center managing these factor.
<unk> $4 million.
<unk> and executing our growth strategy.
73% increase.
<unk>.
<unk> compared to the second quarter.
Second quarter results.
<unk>.
In the second quarter, we generated worldwide revenue.
The outlook of our business for the remainder of 2022.
Avenue.
Therefore.
73% increase.
For 2022 revenue guidance.
<unk> of 2021.
<unk> 354.
Looking ahead.
For $62 million.
Outlook of our business for the remainder of 2022.
Three six.
Therefore.
6% and $44 million.
For the full year 2022 revenue.
Increase.
<unk> range of 354.
<unk> over full year 2021.
Sure.
Revenue of 233 million.
336 to 344 million.
C iterate that our primary focus.
It's an increase.
And the patients.
<unk>, 52% to 55% over full year 2021.
<unk> com.
One new of $233 million.
Let's get into the details surrounding the second quarter.
To reiterate that our primary focus.
During the quarter.
Yes.
<unk> added 52, New U S Implanting center.
Patient the best possible outcome.
Total of 785 centers.
Now I'd 50, while 52, new centers is within our guidance rate.
Tom <unk>.
Range, we experienced a slight delay in opening several additional center.
<unk> Big centers.
Bulk of the price increase.
Total of 785 centers.
<unk>, which required centers to update approvals.
Two new centers is within our guidance range, we experienced a slight delay and open.
<unk>.
Turning several additional center.
<unk>, 3% of all U S centers.
<unk> increase implemented during the quarter.
<unk> continued to monitor and ensure.
<unk> at approval.
<unk> team is focused on accounts that can provide the greatest benefits to patients moving forward.
<unk> for ASC is made.
<unk> for the year.
Percent of all U S centers.
<unk> to add between 52.
Centers continued to monitor and ensure.
<unk>.
Sure, but the field team is focused on accounts that can provide.
Position at existing centers.
<unk> forward.
There's a significant increase.
<unk> for the year.
<unk>, the leading factor in the growth during the call.
<unk> 52.
Order will continue our balanced approach of increasing utilization at existing centers as well as opening new centers to grow capacity.
<unk> showed a significant increase.
Take care.
<unk>, who is the leading factor in the growth during the quarter.
Her team, we created 17, new sales territories.
<unk> utilization at existing centers.
<unk> in our total to 191.
Enters centers to grow capacity.
While this was ahead of our guidance.
Take care.
<unk> continued to expect to add 11 to 12.
There, we created 17, new sales territories.
For 2022.
<unk>, bringing our total to 191.
Two clinical representatives by adding seven.
<unk> head of our guide.
<unk> quarter with 100.
<unk> expect to add 11 to 12.
So we will continue.
<unk> quarter.
<unk> got our sales management and training teams to optimize our ongoing expansion.
<unk> representatives.
Strong patient outcomes.
And in the second quarter with 100.
This builds upon.
Through the year, we will continue.
In the first quarter when we expand.
<unk> and training teams.
And it leadership team, which now includes.
<unk> expansion.
<unk> General manager.
<unk> strong patient outcomes.
Yours as compared to Q1.
And eight.
Eight area Vice presidents.
<unk>.
The changes that we implemented in the first quarter when we.
<unk> productivity from the team.
<unk> leadership team.
<unk>.
<unk> includes.
One thing in additional inspire procedures.
<unk> III.
<unk>, a painting and improving patient outcomes.
<unk> area Vice presidents.
Turning to reimbursement.
We expect increased productivity from the team.
<unk> 2023 payment rules.
<unk>, resulting in additional.
<unk> for hospitals and ASC.
It's maintaining and improving.
Sessions.
<unk>.
The RV used proposed for the inspire procedure.
Okay.
<unk> had been slightly increase.
<unk> recently announced a proposed 2023 payment rule.
<unk> 2023.
<unk> as well as for hospitals.
<unk> year.
Total fees.
<unk> and the other good news.
Physicians.
ASC reimbursement is proposed to increase.
<unk> feature.
<unk>, 4%.
<unk>.
<unk> $25744.
<unk> for 2023 remained flat to the current year.
To focus on utilization improves.
Air B reimbursement is proposed to increase.
<unk> utilization targets for newly activated centers.
$744.
Centers this is improving our ability to assist interested patients.
<unk> with making a connection with a qualified health care provider.
At existing sites.
<unk> currently our outreach programs.
For newly activated center.
<unk> and generating inter.
Centers this is improving our ability.
<unk> fairly through the inspire sleep dot com website.
<unk> connection with a qualified health care provider.
Site, the number of visitors to our website.
<unk> programs.
Right ultimately seven 4 million.
Rams and generating interest.
131% year over year.
Just for the inspire sleep dot com website.
Year, approximately 42000 physician contacts.
Site the number of visitors.
<unk>.
<unk> web site.
Physician context represent the calls and emails.
Site increase of 131%.
<unk> directly to a physician's office.
And from these visits we had approximately 42000 physician contacts.
Yes.
Or referrals directly from our patients.
Tech to context represent the calls and emails to our adviser care program.
<unk>.
<unk> directly to our positions.
Third adviser care program or ACP.
Office and community health.
Approximately 85% of our center.
<unk>.
Health care provider.
And to continue to expand our ACP.
<unk> are active.
Two.
<unk> patients to connect with our adviser care program or ACP.
Two inland the process through which patients are able.
5% of our centers.
<unk> qualified physicians.
10 two.
<unk> merely confirm their suitability for receiving inspire therapy.
Two two which will include many technology advances.
European National business had a strong quarter.
<unk>, which patients are able.
<unk> procedure volumes.
With qualified physicians.
So that's sold outside the U S were up 8% year over year.
<unk> therapy.
Are unfavorable exchange rates.
<unk>.
Rates hosted in a decrease in international revenue.
<unk>.
<unk> three.
Increased procedure volume.
<unk> 21.
While units sold outside the U S were up.
<unk>.
Many and expect the increased <unk>.
Its international revenue.
Rank remainder of 2020.
<unk> second quarter of 2021.
Two P. M countries, we have trained three additional sites in the Netherlands.
One European prospects.
Positive reimbursement decision.
<unk>, Germany and.
<unk> K.
<unk> increased.
Identify and train additional centers.
<unk> 2020.
Transfer completed there in Q1.
Two countries.
So on procedures.
<unk> key additional sites in the Netherlands in response to positive reimbursement decisions.
<unk> recent receipt of countrywide.
We have begun to identify and train.
<unk> P in France.
After the first implants were completed there in Q1.
<unk> is there.
One farm procedure.
<unk> for reimbursement level.
In the interim we continue to plan.
<unk> the recent receipt of countrywide.
Our country.
<unk> for inspire therapy in France.
Country positive reimbursement news.
<unk> dialogue with authorities there to determine the proper reimbursement level.
News Japan.
Level in the interim we continue to plan.
And along with our partner Japan Lifeline.
<unk>.
<unk> have now trained multiple centers.
Positive reimbursement news.
<unk> features.
News I'll jump in Austria.
<unk>, others, who are currently screening pay.
<unk> Pan.
We remain excited about the opportunity and along with our partner Japan Lifeline.
<unk> centers in Singapore.
Multiple center.
Sure.
I think two which have completed their first procedures and several others.
We continue to work with physicians in Hong Kong on the scheduling of their initial cases.
Others initial procedures at two centers in Singapore.
R&D.
For the quarter and we have additional procedure schedule.
About our new Bluetooth enabled.
We'll work with physicians in Hong.
<unk> has been approved by the FDA.
Their initial cases.
This next generation inspire digital platform.
Case R&D.
Sleep sync.
We are very optimistic.
Both therapeutic monitoring.
Mr Coote enabled.
During two patient remote and web based patient management portal.
This next generation.
The sleep sync digital health platform at the American Academy of Sleep Medicine meetings.
And therapeutic monitoring.
For full commercial rollout plan for the second half of this year.
During his rent portal.
Here, we expect.
We introduced the sleep.
<unk> digital health platform will become an important tool.
Leaps of sleep Medicine meeting.
Will monitor patient experiences and outcomes.
<unk> commercial rollout plan for the second half of this year.
So to submit our upgraded physician programmer.
Year.
<unk> da review.
<unk> platform will become.
View or connect with sleep sync and is key to the next step.
<unk> experience.
Remote patient programming.
<unk> later this year, we plan to submit our upgraded physician programmer.
Graham EBITDA approval.
<unk>.
For full body MRI compatibility.
I think and is key to the next step.
<unk>.
Providing remote.
<unk>.
<unk>.
Length that previously allowed only.
Last month.
<unk> and extremity MRI scans.
Da approval.
<unk> most importantly.
Full body MRI compatibility.
<unk> active.
This full body MRI approval.
Exiting.
<unk> that was introduced in 2018.
Neck and extremity MRI scan.
<unk> concern over future access to MRI.
This approval is retroactive.
Considering inspire therapy.
Active patience with the inspire four neuro stimulator device.
<unk> diagnostic tool.
<unk> in 2018.
<unk> current and future.
<unk> that concern over future access to MRI had been a barrier for some patients.
<unk> FDA approval for the new Silicon.
Can split this important diagnostic tool.
<unk>.
<unk> will provide peace of mind.
<unk> improved manufacture ability.
<unk> for inspire patient.
<unk> system implantation increased long term performance.
<unk>.
<unk> hands to liability.
<unk> for the new Silicon based.
<unk> U S launch of the new law.
<unk>.
<unk> later in 2022.
Leads food manufacturer ability.
To longer term.
Some implantation.
<unk> work on the design for our fifth generation inspire neurostimulator.
<unk>, we are targeting the U S launch of the new leads.
The sensor and incorporate <unk> sensing.
Leads.
Saying inside the neuro stimulator using that using an accelerometer.
To work on the design for our fifth generation.
<unk>, a strong confidence with the current design.
And five device will eliminate.
<unk> qualification testing.
<unk> and incorporate <unk> sensing.
<unk>.
<unk> side, the neuro stimulator.
Late 2020.
<unk> accelerometer to measure respiration.
III, we continue to Kentucky.
Strong confidence with the current design.
<unk> increased the number of patients who can benefit.
<unk>.
Fit to prior therapy.
Can you target.
Example.
<unk> da approval in <unk>.
Apple working with the FDA to increase the upper limit of our indication.
Late.
<unk> include patients who have.
Got.
<unk> apnea, <unk> index or AA.
From inspire therapy.
Fluid events per hour.
<unk> Apple.
Sure the current.
And with the FDA.
<unk> for the NHI of up to.
For limit of our indication to include patients who have.
<unk>.
Abney hip public index or <unk>.
For patients with a body mass index of up to 32.
<unk> current indication.
Two current data.
<unk> with NHI of up.
Quest to the FDA to increase the BMI warranty.
In addition.
Their BMI of up to.
<unk>.
240.
<unk> the warranty for patients with a body mass index of up to 32.
<unk> eight has accepted these indication changes.
Two we will be submitting a request to the FDA to increase the BMI warm.
As expected review.
<unk> CMI of up to 40.
In summary.
This week.
We continue to experience significant momentum in all key asps.
Okay.
<unk> business.
Hit through device designation.
Yes.
<unk>, thereby reducing.
Mission.
<unk> reviewed.
<unk> confidence in the continued growth of.
In summary.
But we are a core focus for 2022.
<unk> and significant momentum in all key aspect.
Our existing center.
Our focus on patient outcome.
In the second quarter.
<unk> patient.
<unk>, well as increasing capacity by opening and training new centers.
Our core focus for 2022.
Center and.
Two leasing utilization at our existing centers.
For these initiatives.
<unk> well in the second quarter as well as increasing capacity by opening and training.
<unk> sorry.
<unk>.
<unk> highlight our commitment to improving.
So our call center and investment.
<unk> Hansen.
Tc.
<unk> patient and health care providers.
<unk>.
<unk> experience with inspire therapy.
To this.
We remain extremely excited about our future prospects.
Okay.
<unk> confident that we have the appropriate strategy in play.
<unk> patient outcome.
<unk> I'm term long term shareholder value.
<unk> and health care providers experience with inspire therapy.
I'll turn the call over to Rick for his review.
And about our future prospects and are confident that we have the appropriate strategy in place to drive long term long term shareholder value.
<unk> 22 was $91 4 million.
With that.
73% increase.
<unk> for his review.
<unk> million.
Our.
Second quarter of 2021.
Thank you Tim and good afternoon every.
One basis revenue for Q2 grew 32%.
<unk> 22 was <unk> 91.
<unk> dollars 4 million in the first quarter of 2022.
One piece from the 53 million.
Revenue in the second quarter was $87 9 million an increase.
The sequential basis.
<unk>.
<unk> revenue for Q2.
Okay.
Grew 2%.
Every year peer.
<unk> $69 4 million.
<unk> in the U S reflects.
2020.
Flex centers, including higher utilization at existing centers.
<unk> quarter was $87 nine.
Centers training centers.
Million increase of 78%.
Centers to consumer marketing.
That 4 million.
Growth in the U S reflects.
On a constant currency basis.
Excluding higher utilization at existing centers. The addition of new implanting centers.
<unk> year over year, while on a reported base.
Centers are.
<unk> decreased.
<unk> increased.
Kris.
<unk> of territory manager.
Period to $3 5 million.
<unk> on a constant currency basis.
Is that reduction in foreign currency exchange rates.
<unk> revenue grew 7% year over year.
Average selling price in the second quarter was 24001.
Year from the prior year period.
<unk> hundred thousand 900 in the prior year period.
<unk> to an 11% reduction.
Period price increase.
<unk> exchange.
And in May we.
We expect U S.
Right U S average selling price in the second quarter.
The remainder of 2022 and into 2023.
Was 2900.
<unk> is the price increase is implemented with our various hospital systems.
<unk> and the <unk>.
<unk>, we expect the U S asps to.
<unk>.
<unk> 4000 <unk>.
The <unk> piece to steadily climb throughout the remainder of 2022.
100, <unk> outside the U S was 21000.
To.
During the quarter.
And so this is implemented with our various hospital system.
<unk> in the second quarter of 2021.
System to.
<unk>, driven primarily by unfavorable exchange rates and a lower ASP for distributor.
<unk> ASP outside the U S was 21.
<unk> gross margin in the second quarter decreased to 84, 5%.
Quarter of 2020.
<unk>, 8%.
One primarily by unfavorable exchange.
<unk> due to higher cost.
Rates distributor.
<unk> of poignant part.
Peter in Asia.
Common across the industry.
Asia gross margin in the second quarter decrease.
<unk>.
Kris to 84, 5%.
As Tim discussed.
Five eight.
Just transitions and introduction of the new silicone leads.
<unk> tire COO.
Leads Bluetooth enabled patient remote.
Cost of which is common across the industry.
Note obsolescence charge.
And any remaining.
<unk>.
<unk>.
<unk> simulation and sensing leads.
As Tim discussed.
Oh.
Just due to the product transitions.
Of 2022.
<unk> of the new silicone.
To put up the chart.
Leads Bluetooth enabled patient remote.
<unk> of the introduction of the new lease.
To lessons charge on any remaining.
And outside the U.
<unk> seen leads.
U S, which is uncertain at this.
Leads may occur in the second half of 2020.
<unk> cost of certain component part.
Two charges.
We are lowering.
<unk> will depend on the timing of the introduction of the new.
Great.
<unk> and remote.
In 80 385.
The U S, which is uncertain at this.
<unk> margins to return to the prior guidance levels of about 85%.
Time and component parts, we are lowering.
Total operating expenses for the second quarter were $91 two.
Between 80, 385%.
As compared to 58.
Percent.
Second quarter of 2020.
Prior guidance levels.
One piece was due to the expansion of our sales organization increased direct to consumer marketing programs.
<unk> quarter were $91 2 million.
Graham settlement effort.
An increase of 57%.
<unk> COO.
<unk> to $58 million in the second quarter of 2020.
Cost is reflective of our ongoing plan to drive continued growth.
One.
<unk> can make investments in key areas of our.
Grams.
Continued product development effort.
Business in the quarter was $14 five.
Efforts.
5 million compared to $13 1 million.
The increase in operating expenses is reflective of our ongoing plan to drive continued grew.
And the <unk> per share.
Growth.
Share compared to the net loss per share of <unk> 48 in the second quarter of 2020.
<unk> was $14 5 million.
The weighted average number of shares outstanding for the quarter second quarter was 20.
Per share for the second quarter was 53.
Seven eight that the weighted average number of shares for the third quarter will be approximately 27.
<unk>.
$7 seven.
Okay.
The weighted average number of shares outstanding for the quarter second quarter.
Cash and investments totaled $196 million.
<unk>, we anticipate that the weighted average number of shares.
Of 28 million.
For this.
<unk> includes.
<unk>.
<unk> previously announced $10 million strategic investment and info data.
<unk> balance sheet as of June 30.
Data and initial debt principal payments.
<unk> hundred 96 million.
Payments. This strong cash position allows us to remain focused on executing our growth strategy.
<unk> includes.
<unk>.
<unk> previously announced $10 million strategic investment.
As an opening.
<unk>.
Turning implanting centers.
Data $3 million an initial debt.
Centers inclusion.
Detriment.
<unk>, our strong performance and recent implant trends.
<unk> allows us to.
<unk> confidence in our outlook for the remainder of the year.
We remain of increasing procedure volumes at existing centers.
Year paired remarks or conclude.
Centers new implanting.
<unk> Selim can you. Please open up the call for <unk>.
Centers.
Our strong performer.
<unk> Sir.
<unk> implant.
Good question, you will need to press star one one.
<unk>.
One telephone.
Please standby, while we compile the Q&A roster.
Year to Lam can you. Please open up the call for questions.
Our first question comes from the line of Larry <unk> from Wells Fargo. Please go ahead.
SAR one one on your telephone.
Good afternoon, Thanks for taking the question and congratulations on that.
Another really strong quarter, Tim and Rick and Rick I hope you're feeling better.
Thank you Larry.
Very big Olsen from <unk>.
Just two questions from me one on the filings that you announced at this one on the guidance so.
Congratulations on another really strong quarter, given Rick and Rick I hope you're feeling.
40.
Better.
Thanks.
And it sounds like you do and what data have you submitted.
On the filings that you announced in this one on the guidance.
And how much does this increase your Tam it sounds pretty.
So for the IHA to 100, and the BMI of 40.
Follow.
<unk> had.
And we're very excited about.
You do and what data.
The registry ongoing.
It just put them into context.
<unk> thousand 14.
Next much does this increase your Tam.
<unk> King at data of over 3000 patients and where.
And I had one follow.
<unk> to enroll in that end.
Hello.
And cap on that adhere registry is 5000 patients.
Got it.
<unk>, it's time, we plan to transition over.
14th.
<unk>.
And now we are looking at data of over 3000 patients.
Felipe.
We're going to enroll in that.
Inc platform so.
Adhere registry is 5000 page.
And remember that when we did prior authorizations.
<unk> two.
<unk> work with physicians for patients who.
To be part of the.
Sure.
The sink.
Make sure we tell the insurance companies that this patient is outside the AHRI upper limit.
Remember that when we did prior authorizations.
What other options do they have and so we would submit.
<unk> are outside of the indication.
<unk> be able to get approval.
<unk> the insurance companies that this patient is outside the.
We have collected a significant amount of data.
The patient because what other options do they have.
<unk>.
Have submit.
All of those with the BMI higher than 32.
<unk> approval.
We have provided all of that data to the FDA already.
Will we have collected a significant amount of data.
<unk> is.
Since with IHI higher than 65.
<unk>.
<unk> as well as those with a BMI higher than 32.
As a nation that that.
To that data to the FDA already.
These will carry that really minimizes.
A final PMA supplement.
The FDA has already reviewed the data so very promising.
<unk> bought the.
Get the star data and the enrollment from the Star trial.
In these applications, we will carry that really minimizes.
But in general we.
<unk>.
<unk> that this could be a 20% increase in our overall target market and so we're very.
Forget the star data and the enrollment from the Star trial.
Since who have been getting therapy off label can now be included.
Bill in general.
Good health care policies, so pretty.
<unk> increase in our overall target market and so we're very.
Writing the comprehensive response Rick.
And what's really encouraging is these patients who have been getting.
Over 70%.
<unk> can now be included.
That implies about 40%.
<unk> policies, so pretty exciting.
<unk>.
Citing thank you for the comprehensive response risks.
Hunan or.
Rick.
Just conservatism.
Growth.
How should we think about the cadence in Q3.
The midpoint implies about 40% in the second half at the midpoint.
We haven't changed our.
Our <unk> guidance.
Environment.
<unk>.
So drive the slowdown or.
<unk>.
Just conservatism.
Expert.
How should we think about the cadence in Q3.
<unk> as well.
Good question.
<unk> is a territory managers, because we like to maintain that ratio.
Changed or.
So 4% to six centers.
Our.
<unk> per territory manager.
<unk>, we're just really focused on our continued.
<unk> fact that we had a nice increase in utilization.
<unk>.
<unk> existing centers.
<unk> as well.
Enters adding 17, new territory managers.
<unk> like to maintain that ratio.
<unk> a long way.
<unk>, 4% to six.
With our new dedicated code this year.
Centers.
Given the fact that we had a nice increase in utilization.
<unk>.
<unk> existing centers.
Confidence for our ability to increase our guidance.
<unk> very managers.
<unk> for.
<unk>.
For the rest of the.
<unk> along with.
We normally see a stronger Q4 than in Q.
With here.
As well as the two incision approach that was implemented last year.
Three three to be up like we.
<unk>.
D R.
To increase our guide.
Sure.
More pronounced on.
<unk> first of.
The year, we normally see a stronger Q4 than Q.
John .
Yes, I mean, you've seen that phenomenon and how we have strengthened.
Three Q3 to be up like we.
In Q4.
Norm.
Sure before their deductibles reset and then we have our seasonality in Q1.
But.
John Thanks for taking the questions.
Statements passengers.
Yes.
<unk> seen that phenomenon and how we have a strengthening throughout the year, especially.
Okay.
<unk>.
Before the deductible.
Sure our next question.
<unk> recently.
From the line of Robbie Marcus from Jpmorgan. Please go ahead.
Oh great.
Congrats on a really nice quarter.
Thank you Travis.
<unk>.
<unk>.
Maybe to start.
Our next question.
And <unk>.
<unk>.
<unk> put up.
Really nice utilization good new center growth.
<unk>.
Congrats on a really nice quarter.
Now that you're a couple.
A couple of quarters into your National advertising program, it's about a year since the CPAP recall came in any way to put some.
Some metrics around.
Yes.
<unk>.
A couple of quarters into your National advertising program, it's about a year since the CPAP recall.
Call at this point and how much of a tailwind do you think is left there.
And.
Let's go back to the utilization, which is really positive in the second quarter and really a focus of the team.
Metrics you could share in any way to size up the CPAP recall at this point and how much of a tailwind do you think is left there.
<unk> that.
There sounds great.
And phenomena was driven by Covid is opening.
Second quarter, and really a focus of the team.
Inc.
But we also had 52 new centers.
Places, where physicians can perform the procedures.
Which is seriously we've been opening center is much higher than that.
<unk> phenomena, there switching into the.
And then.
And quarter here, but still very very strong and then.
Inc.
As we mentioned the price increase.
<unk>.
<unk> pushed a couple of new centers into the end of the third quarter. The national programs continue to drive aware.
Budd phenomena there switching into.
Ernest earlier in the year, we saw big bolus.
The tongue and then.
A hits driven by national coverage.
Pushed a couple of new centers into the end of the third quarter.
And now we go to a rotational program where we.
<unk> mentioned the price increase.
Program.
<unk> a couple of new centers into the end of the third quarter.
<unk> and one week off rotating around the entire United.
Sure.
<unk> kind of settled back down to a basal rate, but we still had.
Bolus.
<unk> come to the website, so very very.
For the first time ever.
And that has really driven the need for us to continue to invest.
And our digital tools to help those patients get connected with physicians.
Gov rotating around the entire United States.
The Star program.
States settled back down to a basal rate but.
<unk> fits in utilization.
We have 7 million people come to the website, so very very.
And clearly the sleep sync.
And that has really driven the need for us to continue to.
<unk> able to.
<unk> build tools to help those patients.
And connected.
And so it's a whole systemic.
That pretty complex program, we really like what we see with the national.
The growth.
Graham have new centers increasing utilization.
Is it remain.
<unk> and <unk>.
Key part of the environment for which we operate.
Building capacity for the sleep physicians to be able to.
To get therapy, I don't know if we see.
And so it's a whole.
Anytime in the near future, but.
Since we have running thats going to continue to drive the growth.
Certainly do everything we can get them approved.
Growth recall I think it is it remains.
<unk>.
A key part of the environment for which we operate.
Yeah.
When we do Doc checks they loved the product there is still a ton of room to go in terms of utilization at the centers, but.
There are future but.
But one of the things we consistently hear is that theres only so many docs, who can do this and they only have so many hours in the day so.
How should we think about inspire five as.
We do Doc checks.
Available capacity within the system, how much can that open up with the shorter procedure and anything else you can do.
Hi.
<unk> down the road that one of the things we consistently hear is that theres only so many docs, who can do this and they only have so many hours in the day so.
Take it down.
We think about inspire five as.
Now when we go to inspire five not only are we getting a significant increase in technology.
As shorter procedure and anything else you can do.
<unk>.
Hi.
We are eliminating.
Not the issue going forward.
<unk> altogether.
Sure I mean, if you look back to when we went from <unk> to incision, we're able to take it down.
<unk>.
From 120 minutes down to 90.
And overall system reliability.
<unk> only or were getting a significant increase in technology.
<unk>.
<unk> and improved sensing with the accelerometer.
That reduction.
Eliminating.
<unk>, improving capacity and allowing E&P.
And that has a significant not only reduction in or time or operating.
Okay.
But also an improvement.
It continued to improve.
And by ability.
The surgical techniques improve the technology improve the training.
<unk>.
And as surgeons become more.
Okay.
Sure.
Kent Duction.
Experience with the procedure they themselves.
<unk> and allowing E&P.
<unk> proficient and that reduces.
Schedule additional cases in a single.
Surgeons too.
Date needed just continued to improve.
<unk> percentage of their practice to inspire.
<unk> improved the training.
<unk>.
The improvements in.
<unk>.
There is now economical.
<unk> variance with the procedure they themselves.
<unk> Court.
<unk> better and more proficient and that we do.
Net.
This is.
On the safety profile of the therapy so.
<unk> <unk> two.
Binding everything together, so it's going to continue to drive improve.
<unk> practice to.
<unk> down the road.
And with the improvements in reimbursement.
I appreciate.
Economical.
<unk> to be able to support that as well as the strong patient outcomes and the strong.
The line of.
<unk> controlled file of the therapy.
America Youre line is open.
So we think together so it's going to continue to drive improved.
<unk> got some of the strong quarter.
<unk>.
Was there any stopping headwinds in these numbers.
Great quarter.
Right.
I guess on the Q2 I would love to kind of get some color on April May June early July if you saw anything different month to month.
And then on the utilization piece.
From Bank of America.
Can you quantify and think about where you think utilization goes.
For taking my question and congrats on the strong quarter.
Absolutely.
Nothing headwinds in these numbers.
They are coming out of Q1 remember during the last earnings call, we talked about the challenges we had.
Some color on April May June early July if you saw anything different months.
But this year it gets compounded.
<unk>.
With the rebound of Covid it.
Do you think about.
Yet and so we spent a lot of the second half of February and most of March working through.
Well.
<unk>.
So coming out of Q1 remember during our last earnings call, we talked about the challenges we had.
So April was a really busy.
And we have our normal seasonality.
Month, the saw tooth effect as you see in.
<unk>.
In sales cycles, I think it was pretty consistent.
Consistent across the quarter.
Second half of February and most of March working through.
<unk>.
Through the.
Yes.
Cases that were deferred from the beginning of the year.
Coming out.
Pushed into.
Got it.
So April was a really busy month.
On utilization goes we just saw strong performer.
And the second quarter, we expect that to continue.
In the quarter.
We just above $1 five mid $1 55.
<unk>.
And utilization, which is significantly up.
Amount of patients.
For the second quarter of 2021.
<unk>.
No dramatic improvement across the board.
Utilization goes we just saw a strong performance.
<unk>.
<unk> and the.
Since the second quarter of 2021.
So we're going to continue to drive utilization Ravi asked a question about how we can do that with.
Which is significantly up.
With knowledge and reduced.
Three in the second quarter of 2021 so.
<unk> can do that by gaining confidence.
So board.
To say the therapies.
<unk> increased number of.
We need to kind of increase.
Quarter of 2020.
<unk> dedicated.
We want to continue to drive utilization Ravi asked a question about how we can do that with.
Two insights increase you mentioned steadily climbing Budd.
And we.
But it was up.
Do it.
Represent more than the last quarter.
<unk> Peninsula.
Just.
The physicians to say this therapy.
<unk>.
Really helping a lot of people.
With the physicians and practices as you put.
In practice that we dedicate to inspire.
Hey, Travis it's Rick we did do the price increase in the U S on May <unk>.
It looks like this quarter was.
<unk>.
Was up about 5% more than the last quarter.
Tim.
So just want to make sure I understand.
<unk> customers will have.
Then flows through.
That will pay that higher price.
John .
<unk> impact.
With practices.
<unk> will be phased in over several quarters.
<unk>.
And so in the second quarter.
Hey, Travis it's Rick.
<unk>.
We did do the price increase in the U S on may 1st.
<unk> was attributed.
But we have.
Go to the pricing.
Have agreements with all of our customers.
So eventually all the customers will have that.
We'll pay that higher price.
Increase.
Rice, but the impact.
<unk>.
<unk> will be phased in over several quarters.
Yeah.
And so in the second quarter.
Okay.
<unk> when we introduced.
And it comes.
This increase about 1% of our revenue was attributable.
Two.
Hi, Congrats on the quarter guys really impressive thanks for thanks for taking the questions. So just a couple for me.
Thanks for taking my questions.
A really really solid step up in utilization here.
And I was wondering if you could provide a little color.
Sure.
New winter.
Right.
Peter.
Driving that.
Flexion like.
Good quarter, guys really impressive and thanks.
Higher volume accounts.
Okay.
Ah you're older accounts are they continuing to kind of push.
And solid step up in utilization here.
Monthly.
Here.
Rates of use.
Or is this just a faster ramp.
Do you think that might be.
And you can do or onboard is that you've had in the last year or so.
Like.
And then maybe talk to the ASC utilization.
Volume account.
For the outpatient is that finally, starting to diverge and does that potentially contributing.
<unk>.
Still even higher and higher monthly.
Increasing our courthouse.
Or is this just a faster ramp.
Slot of.
The newer onboard is that you've had in the last year or.
<unk> is a low utilization, but the upper quartile continue.
So.
<unk> to grow and.
<unk> be starting to diverge and does that potentially.
Progress to higher numbers and remember.
<unk> I think.
Increasing our courthouse.
<unk>.
Having productive accounts so they can.
Sort of.
Can.
New centers that are still at the very early stages and low utilization, but the upper quartile.
Could do.
So we saw growth across all four quarters and that was very.
<unk>.
Those continue to progress to higher numbers and remember.
Urged by that especially when a quarter where.
<unk> hard.
Sure Ben.
A number of centers within our guidance.
Art can.
But not having the.
Keep in focus on the strongest content in their territories that are that are helping our patients.
Consistency there I think the.
<unk> four quarters that was very.
<unk>.
Little bit busier earlier in the year when they are dealing with a lot of the Covid cases.
Especially when a quarter where.
<unk>.
We opened a number of centers within our guidance.
But not having the.
But we're still not quite at.
We had previously.
At kind of our overall implants are still growing there and having a decent.
<unk> didn't see there I think.
<unk> done that in a really good news.
For a little bit busier earlier in the year when they were dealing with a lot of the Covid cases.
News and reimbursement from CMS with the national.
<unk> to 23%.
<unk> and <unk>.
Our overall centers, but we're still not quite.
<unk>.
10% of our overall implants are still growing there and having a decent.
<unk>.
So Tim just just following up on that the ASC.
Four 4%.
<unk>.
<unk> increase.
Accelerating faster than the utilization maybe in the outpatient and I'll just my other question is on MRI.
$75000 now that really makes a big impact.
Limiting factor was that to a patient.
Packed effect later in.
<unk> buyer previously thanks.
The year Okay.
Find out.
We know patients.
Okay.
<unk>.
In addition.
No they need to have a MRI in the future they consistently have them and so they're a little bit.
<unk>.
My other question is on MRI.
<unk> prevent that diagnostics.
Two for you exactly on how much of.
<unk> is going to be a positive uncertainty at ease.
Using.
Minder comfort for those patients to be able to move forward.
<unk> <unk>.
Word, but we'll report back on that as we.
<unk>.
We implement this now and.
In the future they consistently have them and so they're a little bit.
Worrisome about having a procedure that will prevent that diagnostics, but we do think it's certainly going to be a positive uncertainty at ease.
<unk>.
A minor comfort for those patients.
And we will continue to grow, especially with the increased reimbursement.
<unk> check on that as we.
But.
We implement this now.
System, we increased the number of centers up to 23%.
And.
In the quarter and I think the utilization is maybe a little bit flat from the first quarter, but I think that has a lot to do with the COVID-19 impact.
Utilization will continue to grow, especially with the increased reimbursement.
<unk> going to continue to be a positive push and we expect that will continue to grow.
We.
<unk> the number of centers up to 23%.
In the quarter and I think the utilization is maybe a little bit flat from the first quarter.
Grow Jonathan block from Stifel.
<unk> would impact because of Covid cases, getting moved to the ASC.
Will turn so let me go ahead.
But positive push and we expect that.
Good good thanks.
Taking a look at the 10-Q the AD expense was $18 million I believe in the second quarter and I think it was 15 million in the first quarter.
Sure.
How do we think about that ramping for the balance of the year and maybe more importantly.
Sure.
Ultimately, where do you see that going is this $100 million plus DT.
Paul.
The business.
Thanks.
As we look out 12 to 24 months and then I've got a follow up along similar.
So it was $18 million I believe in the second quarter and I think it was 15 million in the first quarter.
Great John .
So we think about that ramping for the balance of the year and maybe more importantly.
DTC spend advertising was about 48 million.
Million dollar plus DT.
CPC type of business.
80%, 80%.
<unk> to 24 months.
<unk>.
And then I've got a follow up along similar.
<unk> because were low.
And the penetration of centers.
More on.
<unk> as well as physician.
'twenty one.
<unk> is growing.
Our.
And we're seeing good return on.
It's about 48 million.
<unk> with our with our high margin.
Yeah.
<unk>.
<unk>.
<unk> product.
80%.
<unk> make those investments.
<unk> words.
<unk> will be increased by 80% in 2022, now they'll probably be closer to.
Discussion of centers.
70%, but that number will continue to grow because.
<unk> is <unk>.
Again, we're in 785 centers.
<unk> investment.
Our next goal is to be in 2600, and then ultimately.
<unk>.
<unk> 2400 centers and so.
But we're going to continue to make those investments.
No.
<unk>.
Thanks.
Well the increase the 80% in 2022.
Sales organization.
No.
<unk>.
60% to 70%, but that number will continue to grow.
R&D development projects.
ROE and we're in 785 centers.
<unk>, we have shown lever.
<unk> hundred and then ultimately.
Average.
<unk> roughly 2400 centers.
Model to make those investments.
Centers to continue to make those investment.
Helpful and then maybe Tim for you.
It's that we're growing our sales organization.
Do some of these numbers right you throw out roughly 42000 physician contacts.
<unk> a lot of different R&D development.
Some give or take or so U S implants in the first half of the year. The first two quarters. So.
Of course, theres going to be a good amount of leakage, but maybe just talk to us.
<unk>.
<unk>.
<unk> filing that off or increasing the conversion ever so slightly from the physician contacts down to the implants, but I have a tremendous impact on the P&L clearly so.
Investments in physician contacts.
What's in your control.
5000 give or take or so U S implants in the first half of the year the first two quarters.
<unk>.
So theres going to be a good amount of leakage, but maybe just talk to us.
Dialing that up or increasing the conversion ever so slightly from the physician contacts down to the implants, but I have a tremendous impact on the P&L clearly so.
They just don't have somebody sitting there waiting to take our phone.
<unk>.
So we need to work with technology to find better ways to get patients their approve or getting.
Thanks, guys no very good question couple key.
<unk>.
Key bottlenecks that we have when we deal with staffing challenges our staffing challenge.
<unk> time ideally.
Is it.
Hey.
And <unk> as they just don't have somebody sitting there waiting to take our phone.
It's a longer period of time.
Call technology to find better ways to get patients their approve or getting.
<unk> need to continue to grow the number of.
Getting appointment with.
Same goes for scheduling.
<unk> to get those appointments within a reasonable period of time ideally.
<unk>.
<unk> and <unk>.
Paul.
Days, none of our physicians are very busy and they're scheduling out a longer period of time.
Since we have not had a sleep study within the last two years.
<unk>.
And that's a specific requirement for Medicare.
Since offering that therapy.
<unk> commercial payer.
For scheduling.
There's patients to find tools to be able to.
The most notable.
Two studies conducted two examples.
<unk> of the patients almost half of the.
<unk> currently running.
<unk> had a sleep study within the last two years.
Our to test that out too.
Years requirement for Medicare.
And getting.
There is a lot of the commercial payers.
<unk> <unk> studies in a very timely manner.
<unk> tools to be able to.
<unk> data, which.
To get those sleep studies conducted.
Which proved their own capacity.
<unk>, our investment in Agnon me, which we.
<unk> of sleep studies, so we need to keep.
Our three states right now to test that out.
To.
So it is coming in as far as texting and ongoing.
<unk> a timely manner.
<unk> to make sure they're aware of their appointment we get.
<unk>.
Them to their appointment so we have a whole team that focuses on.
Which passed.
On that pipeline of how to improve.
<unk> of <unk>.
Sleep studies so.
<unk> by step.
So to keep it.
Improving our technology, we have a lot of.
Thanks, John .
Who is coming in as far as texting and ongoing communication with patients to make sure. They are aware of their permit we get.
Comes from the line of Amit <unk> from Goldman Sachs. Please go ahead.
Them at exact pipeline of how to improve.
Taking my questions just a couple of clarifying.
Roof.
Points that have already been kind of touched on previously.
Sure John .
First one I know when we talked about it previously that there was some comment that there were patients on the sidelines for that MRI.
Compatible that were waiting to be done I'm wondering if.
So Hassan from Goldman Sachs. Please go.
It had anything to do with some patients that have been on the sideline on the MRI side, if it's something you can quantify or called.
And kind of touched on previously.
Further we can talk about next quarter because.
There was some comment that there were patients on the sidelines.
And the time it takes for patients to work through the cycle.
<unk>.
<unk> is running longer than.
In the previous four months, we talked.
Some patients that have been on the sideline on the MRI side, if it's something you can quantify or called.
About our need to increase capacity is probably running more like.
But next quarter because.
Mike.
We just got the MRI approval.
Asked us.
<unk> is the time it takes for patients to work through the cycle.
Yet potential boost.
Longer than.
And half of.
Then we have four months we talked.
The year.
I think that with the number of patients we are in the process.
Color on what happened with the.
And we need to increase capacity is probably running more like.
The price.
<unk> had months.
It sounds like it was just a couple of centers and its already resolved.
So as yet.
Thank you for listening.
If there were an issue.
Yet that would be seen as that.
Potential boost.
As you know that we did in the first one that we didn't touch on.
Fair enough fair enough.
On the Q4 and Q1 when Covid was ramping we were.
Happen would be.
Sure.
Second sites of service either community hospitals.
The situation it sounds like it was just a couple of centers and its already resolved.
<unk> four.
<unk> and <unk>.
<unk> seizures.
There's a couple of different phenomenon going on there that we did in the first one that we didn't touch on.
<unk> price increase.
Q4, Q1, when Covid was ramp than we were.
And this committee or have been at a corporate level.
We're progressing their community hospitals.
<unk> reviews so.
It will proceed to provide.
Out of those will get resolved relatively quickly and we will get those centers up and operational.
Right.
Here in the third quarter.
Secondly, as we discussed during the quarter when we did a may one price increase.
Quarter, and that's something you expect to be persistent it is just going back to value analysis.
Analysis committee or have been at a corporate level needed to go back and do another review so.
This is Kent.
So.
Those will get resolved relatively quickly.
<unk> opened up 52.
Landfill.
But first.
So on the high single digits.
Okay. So not something you would expect.
Strangely if thats something you expect to be persistent it is just going back to your value analysis.
Can you quantify how many centers that might've brokerage.
Question.
Oh I don't think.
Chris Pasquale from Nephron Research. Please go ahead.
It's of a number we opened up 52.
Tim Griffith for raising the.
And the BMI ceilings and label it sounds like a great step in terms of expanding access.
102 patients still have to jump through the dice procedure I would think when you get up to a BMI of 40.
But.
And at least some lateral wall involvement so how are you thinking about the importance of that step.
Chris, especially on the quarter.
You'll see a pathway to eliminating that some.
CACI and the BMI.
But with IHI.
Great step in terms.
Hi.
<unk> acts.
I think that being able to be screened through data is going to be a problem for those patients with the high hei.
The BMI of 40.
It's a patient because they.
Federal law involvement so how are you thinking about the importance of that.
Just as you increase.
Absolutely to eliminating it at some.
<unk> increases the probability of.
Point, that's not a concern.
<unk> conference.
And we don't think that being able to be screened through data is going to be a problem for those patients with the high <unk>.
<unk>.
Indicative of.
Hi.
B concentric collapse because of fab pads are on the side of the neck. So when you lay down you get the lateral wall collapse.
The BMI that increases.
B.
<unk> probability.
With the hypoglossal nerve stimulation.
So that's going to be a greater challenge for those patients, but it is a while it is a higher probability when you get to the upper <unk>.
<unk> is a fab pads are on the side of the neck.
Is it to show.
How long do you get the lateral wall collapse.
<unk> certainly worth.
<unk> fall collapses what cannot.
Turning level to help those patients out.
B hypoglossal nerve stimulation.
<unk> locked them out because.
Asia is going to be a greater challenge for those patients.
Make a note on.
But the higher probability when you get to the upper BMI.
On this to a patient.
<unk> have sufficient data to show.
<unk> not prevented from having third.
So certainly worth.
Given information that says hey.
Worth warning level to help those patients.
A lot of data on the success of that therapy.
Because.
We've been able to give the data to the FDA and it says.
Want to make a note on.
Be increased up to 40.
This is not part of our formal indications so a page.
<unk> a proper screening.
<unk> <unk> is not prevented from having therapy.
<unk> patients and they can have strong outcomes just like.
For patients above 32, we don't have a lot of data on.
Thanks, that's helpful.
And then just one on the reimbursement front the proposed hospital outpatient and ASC rules included a request for comments about creating a level six APC code.
On the <unk>.
Stimulation.
And in fact.
So it was included in this hypothetical new category.
<unk> just.
Could you give that to 10%.
Like.
If that goes through is that something your team is focused on responding to hear during the comment period and if so how are you thinking about the potential for success.
<unk> included a request for comments about creating a level six.
There.
It's Ed.
Hypoglossal nerve stimulation.
Organizationally to pull that together.
It was new category.
<unk> comments right now where our price point is with.
Ari.
The increase.
Seems focused on responding to hear during the comment period and if so how are you thinking about the potential for success.
<unk> and a temporary increase really has.
There absolutely is.
It's.
At hospitals.
Application organizationally to pull that together.
<unk> certainly love to see that come through were not counting on it.
<unk> with.
<unk> have basing our business on the fact that we need a level six we have our business.
Currently in today.
First of all the global fiber.
Hey, Pat presenting.
But to your point, we're going to certainly track it closely.
A positive impact at hospitals.
You bet Chris.
Importantly at AFC. So we would certainly love to see that come through were not counting on it.
Thanks, Adam <unk> from.
S business.
Hello.
<unk> on the fact that we need a level six we have our business set up to be successful with global <unk>.
Alright.
But to your point, we're going to certainly track it closely.
Adam Yan there.
You bet Chris.
Thank.
And I show. Our next question comes from the line of Adam <unk> from Piper Sandler.
Can you guys hear me okay.
Tomatoes.
Out of RF.
Hey, guys, sorry about that guys.
Okay.
Two questions from me, maybe just to start first one on gross margin.
I mean on there.
I was hoping you could flesh out.
Some of the puts and takes for the new gross margin outlook.
There is open.
Slide second half step down a little more detail I heard you reference obsolescence charges.
Alright.
With some of the product transitions and the higher input costs with the supply chain.
It comes from me, maybe just to start first one on gross margin.
But just talk about how quickly you think you can get back to that 85.
Some of the puts and takes for the new gross margin outlook.
<unk> target and then had a follow.
And stepped down a little more detail I heard you reference also lessen.
So first for the second quarter.
Lessons traditions, and the higher input costs with the supply chain.
<unk>.
But wanted to see if you could go a little bit deeper there and then.
Lower from a year ago.
How quickly you think you can get back to that 85.
<unk> costs on certain components.
Hi, Joe.
<unk>.
Gross margin target and then had a follow.
Thanks.
<unk>.
Sure. So there's two parts of that Adam So first.
Components.
For quarter.
<unk> centers.
<unk>.
Require higher.
Four 5% 130.
Here at case, our inventory balances are growing.
30, a year ago.
Rowan.
And that was really primarily.
Challenges are not uncommon for other companies similar to us but.
Early the remote.
But our team continues to monitor closely.
In addition to paying higher prices for some components.
And but.
<unk>.
That's really the impact from Q2.
Purchase.
We've also had a strategy of maintaining a good level of safety stock try and target about 90 days of inventory.
<unk>, an uncommon for other companies similar to us.
Hans.
But our team continues to monitor closely.
The second part of your question.
And we're managing that on a daily basis.
Specifically around.
Basis, the impact from Q2.
<unk> approval and targeted launch dates of the new silicone leads as well as the new Bluetooth remote.
To about 90 days of inventory.
Note the transition of these products sometime in the second half of 2022.
<unk>.
<unk> handsets.
Hence if our guidance.
Some inventory quantity.
<unk> of your.
It's inventory that.
<unk> has really specifically around.
Bite off as existing.
<unk> approval and targeted launch day.
<unk>.
<unk>.
New silicone leads as well as the new Bluetooth.
And started 2022 with our with our gross margin guidance.
Two products sometime in the second half of 2022.
For 83% to 85%.
To have some inventory quantity.
<unk>.
Cities are going to be excess inventory that.
As after we introduce those too.
Both products.
Physical inventory quantities.
Back to our previous guidance level of 85% roughly.
Focused on 2022 with our with our gross margin guidance.
Roughly thats really helpful color I appreciate that.
<unk>.
And Tim.
Pat.
Not to kind of piggy off Christmas question in.
The term.
There's a study on clinical trials dot Gov called the predictors study.
<unk>.
I was hoping you could talk a little bit about kind of the the objective of that trial.
85.
Will potentially remove the dice procedure from the treatment funnel just any more color you can share on that study would be helpful.
I appreciate that.
And guys for taking the questions Congrats on Monday.
Some quarter.
Shannon.
Very much.
And Theres a study on.
Is that fair.
Physician down in Phoenix very accomplished.
On top of that trial.
And he.
I'll actually remove the dice procedure from the treatment.
He can for a technique that he could.
A study would be helpful.
Good setting in an awake.
And questions.
Diagnose a patient.
Now some quarter.
<unk> seen them.
Thank you very much.
<unk> have to have a drug induced debated endoscopy.
Much pushing down in Phoenix very accomplished.
So we developed this technique.
Hey.
He published a paper with about 100 patients.
Looking for a technique that he can.
<unk> on that because he.
Could this setting in an awake.
Fictive.
Diagnose a patient.
<unk> respond to therapy, which patients did not have.
To have a drug induced <unk> and <unk>.
<unk> mentioned.
<unk> could be either way, what we call a <unk> procedure.
So we worked with Jordan and says Okay now we need to prove it. So we are currently activating.
And we really became interested now that because he.
<unk> of 300 patients.
Victims.
<unk> already have.
<unk> shares would respond to therapy in which patients.
And enrolling patients a fifth site ready to start.
<unk> dementia.
<unk> and <unk>.
50 patients enrolled already it's going to go quickly.
<unk> is okay now we need to prove it. So we are currently activating.
<unk> is a caliber to measure the dimensions of the airway and underway.
<unk>.
Right.
Patients follow through.
I.
Yes.
Think sites open and enrolling patients.
That data to eliminate the need.
Fifth I think we're already close to.
Need a BMI less than 30.
They're already it's going to go quickly.
To hear one really important step on.
So if we do.
On this occasion from the FDA.
Dimensions of the airway and underway.
A P to be done.
Patients follow through.
The patient has the proper anatomy for which inspire therapy can help them.
You eliminate the need.
Them being responsible put that requirement.
<unk>.
<unk>.
And to ensure strong patient outcomes.
Two really important step.
<unk>.
Thats the indication from the FDA.
They make a change there so.
That's a fit for the patients.
Does that the patient has the proper anatomy for which.
And steady.
Which <unk> alpha.
The second half of the year, because it's such.
Them put that requirement.
Easy.
<unk>.
<unk> conduct.
And to ensure strong patient outcomes.
The color.
<unk>, we're comfortable with.
Jim.
Trial coming out we're going to be able to make a change there. So that's really going to be a strong benefit for the patients.
Beth I assume comes from the line of.
Mark.
That dropped the second half of the year because it as such.
Hey, good evening. Thanks for sneaking me in question on raising the Asia.
Great color.
Two 100, I'm just curious what you see in the data Tim.
As you move.
Jim.
The spectrum.
Yes, and Sean.
It is no different than what you are observing.
John .
As an example, but are there.
Ah.
Diminishing returns to the benefit as you move up the age.
Sure.
<unk>.
I framed differently.
These patients with north of $65 IHI see less reduction than say the <unk>.
<unk> spectrum.
South of 65, what is the data that you have suggests so far they actually see more it's just a matter of what mathematical tool you want to use it.
If you look at the percent reduction they actually get higher because they are starting with a high base.
Differently did these patients with north of $65 IHI see less reduction.
Client number they actually do better only because they have so much to give back.
And then suggests so far they actually see more it's just a matter of what mathematical tool you want to use.
Back or criteria at all you have to have.
Use of reduction they actually get higher because they are starting.
Hei and the resultant hei it needs to be.
The absolute reduction in AHRI, the absolute number they actually do better.
Hi of 80 to get down less in 'twenty.
The challenge gets into if you start talking about.
<unk> reduction is only.
Eric criteria at all yet.
<unk>.
<unk>.
Seven.
2% reduction in ACI, and the resultant hei needs to be.
70 fighter its always a little bit challenging, but if you just look at the benefit that those.
Who has the hei.
So showed from the data.
20.
Life is also a real dramatic improvement as well because.
<unk> is owned.
It is having IHI.
<unk> seen.
Need a seven.
Hi.
Production from <unk>.
So these patients are really going to have a strong benefit.
The challenging but if you just look at the benefit that those.
<unk>.
We have and what we also showed from the data is the quality of life.
As color I appreciate that.
As many as well.
Last one.
Challenging it is having IHI.
On the small market small numbers.
Hi.
Or is that.
Locality, where you have.
<unk> really going to have a strong benefit.
Small numbers for your competitor there as well, but I'm just curious if you have any kind of.
<unk>.
The.
Assessment of how that.
<unk>.
That country is performing with two choices in the market any any perspective on share.
There is.
As above efforts there in the market accepts hypoglossal nerve stimulation more broadly.
For your competitor there as well, but I'm just curious if you have any kind.
Thank you very much.
I think there is really only one choice in Germany today and Thats inspire.
Brimming with two choices in the market any any perspective on share.
In Germany.
As efforts there in.
Many.
And the market accepts.
Company, you're referring to just.
Probably.
Theyre focusing right now on conducting clinical studies.
With absolutely can make thank you very much.
Is that.
They can be safe.
Much choice in Germany today and Thats.
And a viable option.
That's over 25000.
<unk> right now.
Growing.
Now and that we don't see too much of a presence from them in Germany today.
<unk>.
But again they are focusing on.
Company, you're referring to just.
<unk> research.
Theyre focusing right now on conducting clinical studies.
And S III.
So that.
<unk> guidelines.
Dave.
<unk> in <unk>, Germany, which is the highest.
And bill option.
Level.
And so it's a little bit early right now.
Functional.
Now that we don't see too much of a presence.
I'll fire alone.
Presence.
<unk> recognized those therapy.
And they are all clinical research.
I appreciate.
And making sure that we're part of.
That.
The.
The Q&A session for the conference I would now like to turn it back over to Tim Herbert for any closing remarks.
<unk>.
<unk> guidelines.
<unk>, which I know are coming minutes over but I want.
In that span.
Thank you all for joining the call today and as always I.
On insulin therapy.
Im growing team of dedicated inspire employees for their enthusiasm hard work and continued.
Guidelines the Q&A session for the conference I would now like to turn it back over to.
<unk>.
Hum.
For any closing remarks.
<unk>.
The inspire team's commitment to patients remains.
Mark.
<unk>.
Thank you all for joining the call today and as always I am.
I wish to thank all of our employees as well as the health care team.
And our employees for their enthusiasm.
Teams remain focused.
And.
<unk> further expanding our business.
To achieve.
Yes.
<unk> six.
Europe and now in Asia.
<unk>.
For all of you on the call. We appreciate your continued interest in.
It remains.
In support of inspire.
<unk> is the most.
Here or to providing with further a further update.
<unk>.
Rates in the months ahead.
As well as the health care teams.
<unk>.
Teams their continued efforts as we made four.
Today's conference call you may now disconnect.
<unk> in the U S Europe and now in Asia.
For all of you on the call. We appreciate your continued interest in and support of inspire and look forward to providing with further further updates.
During Q&A you can dial one one.
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Yes.
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Sure.
Okay.
Okay.
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Okay.
Sure.
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The conference will begin shortly.
As Johan during Q&A, you can dial star one one.
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