Inspire Medical Systems, Inc. (INSP) Earnings Call Transcript & Summary

Good morning, everyone. Thank you so much for joining us. A special thank you to the team from Inspire. We have Carlton Weatherby and Ezgi Yagci, and let's get started. This is just a fireside chat format.

So Carlton, my first question for you is you're now just over a year into the job as Chief Strategy Officer, and I'm curious, like if you look over the last year, sort of what you think was most surprising to the positive, to the negative? What have you learned in your first year at Inspire. And what is your focus now as we look over the next few years?

Great question, Danielle. First of all, thank you for having us. It's great to be here in Southern California, and it's been a great conference so far. When I think about your question, I've been here for 6 quarters at Inspire. And in some ways, it feels like 6 days, which I think is a good thing. It means I am having fun. And a lot has happened in the last 16 months, as you know. But what I want to start with you is reinforcing what remains the same, which is what attracted me to Inspire to begin with, which is a company that's mission driven, focused on the patient, fueled by innovation and focused on breakthroughs that improve patient outcomes. And that's exciting. In many ways, it's been reinforced day by day since I've been there. In terms of what's changed over the last 16 months, I'd like to think of it as how do we operationalize our growth plans and even frame our definition of growth. And that can mean a lot of things, I know. I think one of the salient examples of that, that's near and dear to the heart of this audience is over the last year, we've become a profitable company. And so how do we think about growth both top line and bottom line, and we're excited about that. Credit to the team for that performance. And obviously, this is just the beginning of that part of our story. I think the other element of growth that we refine and reframe is how do we drive therapy adoption. And what are the core elements or objectives that underpin that. We talk often about driving higher quality patient flow. We talk often about alleviating capacity constraints within the system so that more patients could be treated and managed. And then how do we just build conviction, confidence, excitement for our core customer base of sleep and ENT physicians, so that they want to pull their patients into the system, and have them have an alternative that they don't have today to be treated for their obstructive sleep apnea. And so as we think about growth under those pillars, how do we then rally the organization around those objectives and make sure that we're all kind of rowing in the same boat to meet those objectives. That's been a large part of my role. I think there have been a few surprises, both external and internal that have been positive for me. One is I knew this was a large market and untapped. I think I underestimated the growth potential, the runway of the market at large. And for many factors, smart devices that are notifying patients that they may have sleep disturbances, GLP-1 drugs that will bring more patients into the physician's office to get screened for OSA and also OSA being added to some of the treatment protocols for other conditions like atrial fibrillation. Those are 3 examples of external factors that will drive the market growth and expansion. On the internal side, I come from a traditional medical device background, and I saw us as a medical device company with the world's best closed-loop neurostimulator, which is true. But I think I underestimated the breadth and depth of expertise we have across sleep in this fairly complex care pathway of a patient coming into the system who needs to take multiple steps across different specialties. And I've been overwhelmed by the depth and breadth of our expertise to be able to help support patients from end to end. We know the front end where we bring patients in with awareness and engagement, and then on the back end, how do we train, educate and support providers and patients on the management postoperatively and everything in between, there's embarrassment of riches in terms of the expertise we have internally to be able to support that process. And I think that's actually one of the core competencies that sometimes gets understated, and it really becomes a competitive advantage.

Okay. What would you characterize as the biggest challenge that you've faced over the last -- or in your first year? Is it -- there's been a lot that happened?

There's a lot that's happened. I think of it more about the one word being focused, prioritization. My role of strategy, a large part of that is how do we think about the most impactful initiatives and activities that we can invest in. There's so many bright ideas across our organization, but the greater measure of focus with me is how many good ideas you can say no to or not yet to. And so we're going through a process now, especially heading into 2025 of racking and stacking what's going to have the biggest impact near and long term and as the strategy lead, thinking about the long term is a really important element of factoring into the decisions we make today. And so I know there's a lot that happened outside of our control. I don't worry too much about that. It's about what do we focus on internally to make sure we have the biggest thing for our book in terms of investment and our employees' energy and in kind of discretionary time.

Make sense. All right. Well, maybe let's talk about 2025. So consensus sits at about 20%-ish sales growth this year, you'll probably put up based on your guidance, high 20% growth. What are -- I appreciate you're not going to give guidance here. But maybe walk us through some of the key considerations for growth next year, tailwinds, headwinds. I don't know if Ezgi wants to take that or Carlton, whoever.

I'll start and Ezgi you fill it in. A few that come to mind for me, Inspire V is something that we obviously are very excited about and just how that will drive therapy adoption both increasing the capacity of existing implanters, but also bringing more into the fold, both in terms of centers, but also new implanters at existing centers. And we'll probably spend more time on what that impact can be. But that is -- it will likely be a driver in 2025. I look at the work we continue to do and the progress we have in payer conversations as they update their policies to the expanded FDA indication. But also as we adjust some of the terminology around concepts like DISE or even CPAP refusal versus intolerance. Our team in the market access have done a fantastic job having those conversations, initiating those conversations. And we're seeing some expanded opportunities to treat more patients because of those policies continue to expand our footprint in the U.S. As I said earlier, we are largely untapped. And so that will always be a part of our strategy, being thoughtful, strategic and targeted in terms of what are the best markets for us to go into. And where can we build an ecosystem that's highly functioning and driving. Those are 3 that come to mind. I know I'm missing a few, Ezgi, what would you add?

Our own DTC campaigns are ongoing efforts across DTC. We're also very excited about, as you know, some of these wearable technologies have received FDA indication to be able to detect OSA. So we do think that should bring additional awareness to OSA and sleep in general, and hopefully bring additional patients into our funnel. Same goes for GLP-1s as well.

Okay, great.

One thing I'll add, actually, medical education is something that I'd be remiss if I didn't address. We're investing heavily in that. And we've talked quite a bit about our advanced practice provider program. This year, we're on pace for training over 300, and those will help us alleviate capacity issues with some of the ENT and sleep practices, we're excited about that. And then also the other element of training and educating new surgeons, both those who are coming out of residency in their initial fellowship training, but also surgeons who have been out there kind of interested and not fully engaged. And so we continue to train tens of surgeons by the quarter to come in and help us alleviate the capacity constraints as well.

Okay. Yes. And I definitely want to get into the capacity because that's a big issue. But before we get there, just from a headwind perspective, I mean, obviously, comps are -- you're going to put up high 20-ish percent growth this year. The competitive environment like might get tougher. I don't know, we'll see. I mean, what are some of the headwinds we need to consider as we look at next year?

Competition is something that we're well aware of. We're ready for it and we pay close attention to. And I think that in this year, we're expecting approval of a competitor and there'll likely be some, I'll call it, competitive trialing at academic centers. Still to be determined when that is and what the impact will be, but I don't see it being incredibly impactful. I'm curious [indiscernible].

Okay. That's fair. For Inspire V, I will say after the earnings call, the perception was that maybe the pricing strategy there has changed. Can you talk a little bit about whether, a, that's true; and b, sort of how you are approaching pricing for Inspire V?

I'll start by saying we don't believe that's true. We think that perception is inaccurate and we've been very consistent across all of our calls and saying, as we prepare for launch, there are a number of options that we're evaluating, one which includes keeping the system level price flat, which is where we've landed. And we think it's the right decision for multiple reasons. One, we've mentioned the removal of the sensing lead is one of the more costly components of the system. And so we get a reduction in COGS and improvement to our gross margin with that even at keeping the system level pricing flat. It also helps with us feeding through the process of contracting as we bring this product to market. And there are other variables, but this isn't late-breaking news, at least from our perspective, this is an option that we've been speaking to publicly for some time now.

That's correct.

Okay. All right. And I appreciate you guys have said you're going to give more color on coding, how to think about Inspire V reimbursement. But can you at least maybe walk us through what the potential scenarios are here, like where we could win, how you're thinking about like where this could end up?

For now, we are still in deep conversations with payers and a lot of progress there, well received. As we said last week on our earnings call, we're going to wait until early January until we actually fully disclose what that strategy is. But the good news is we know about the speed of the procedure will be shortened. And what that allows us to do is be confident that there'll still be a very compelling clinical and economic value proposition to these physicians. But Ezgi, anything you would add?

No. I mean we're very excited about Inspire V, as you know. The team is very busy at work getting ready, getting the inventory in place. And to Carlton's point, we'll give more color on our reimbursement strategy in January.

But I think as far as what the worst-case scenario is here, it's not that bad, right? I mean I guess that's what I'm trying to get at, like you'll have coverage of Inspire V and it's just a question of like standardizing that across all the -- that's fair.

No question of whether there'll be coverage. No question of whether there'll be a code. And the question is what the reimbursement will be and we're confident that it will be positive outcome for the physician and facilities, so.

Okay. And then the other side of reimbursement, obviously, the physician fee you mentioned is a shorter procedure. Is there any risk to change to the physician fee?

I don't see there being a risk. The process which is out of our hands is typically you have a RUC survey that's done every few years, and then that's a recommendation over to CMS and then there's adjustments based on RBUs. Those take time and those assessments are out of our control, and there's a lot of factors that go into that. And so again, we're very confident. So I'm curious to see anything you think in terms of considerations that are in there, but...

Okay. Yes. No, that's fair. The other potential tailwind that I see maybe of less '25 and we were talking more of '26, '27, but can you talk about the replacement cycle? And you've now been on the market for over 10 years. And we're hitting that replacement cycle now. I appreciate still small numbers today. But how do we think about that over the next, call it, 3 years?

You're right. Here we are. We became commercial 10 years ago. Our battery life is 10 to 11 years. And so that means it's going to start kicking in. And we've actually began seeing in this past year, some of the clinical trial patients come in for replacement. And so we're excited about that building. Again, as we've said in the past, that first year of commercial activity, I think we had $3.5 million in revenue. And so that's a few hundred devices that were implanted that year. But each year, that will build and compound. The beauty of it is, there's little to no customer acquisition costs. The patients get alerted on the remote, and then they go to their provider and get it implanted. It's a shorter procedure as you replace the device. And ASP of $20,000. And so we see that being a meaningful contribution to the revenue stream going forward. Again, this next year, next couple of years maybe not even noticeable. But as it builds out into the future, it picks up substantially. So we're excited about that.

Yes. And how -- I mean, I would have to think retention rate is going to be fairly high. I mean, how are you -- as you guys are looking at this, like what's your sense of -- I know it's very early, but what your sense so far on how [indiscernible]?

We're assuming 80% retention rate. And part of that is the early patients who are Medicare and some who may have [ phased ] out their survivability, but we're assuming that most patients come back, especially given we have 90-plus percent patient satisfaction scores. A lot of patients are ready and willing to come back and get the next version of it, so.

Sure. Okay. All right. And you mentioned DISE and changing the conversation around that. We did see Predictor just a few weeks ago -- well, I guess, 2 months ago now at this point. What are your thoughts on the Predictor outcomes and what could happen with DISE? And I guess the biggest question for me is does that even matter all that much when you're talking about capacity, it's a 15-minute -- minor 15-minute procedure, like -- maybe talk about how DISE is -- and how you're looking at that going forward?

I think it matters. I'll ask Ezgi, you want to start on what we saw from ISSS, then I'll give my thoughts on the kind of strategic [indiscernible].

Sure, it definitely matters because, as you know, most payers require that the implanting surgeon performs DISE procedure. DISE does require the use of propofol, which means we have to do it or the surgeons have to perform it in the operating room. So it does matter to capacity. What we presented or what our KOLs presented at the end of September in Miami, was that there are several different phenotypes that clinicians can use to determine whether or not a patient is likely to have complete concentric collapse. One of the phenotypes was [indiscernible] neck cimcumference above 18 inches, 18 inches. And so we've already taken that data set to a handful of payers. And we're not trying to give them the algorithm for how they screen for complete concentric collapse, but we do want our payer policies to match our FDA indication. So yes, we are contraindicated for complete concentric collapse, but it should be up to the surgeon's discretion to determine how to screen out the patient for that.

And I think the positive of this is that we look at those different phenotypes that Ezgi described and the algorithm that comes together, it shows that patients with a BMI of less than 28 -- or a patient with a BMI of less than 32, but the neck circumference of less than 18 inches, likely don't need a DISE. And the beauty of that for us, we talked about speed and high-quality flow of patients to get treated sooner. It allows them to remove an unnecessary tedious step in that process. And those treatment options to be available sooner. And so that's a positive for us, but also positive for the system. And that's why payers in our conversations have been willing to adjust the language even early in the discussions we're having without the data being kind of finalized. And so It should be a tailwind as we think about capacity.

Okay. Okay. Got it. Well, let's talk about capacity. That's been a bottleneck for a while now, right? And feels like it's the primary rate-limiting factor, correct me if I'm wrong there. But I guess, as you look at some of your highest volume implanters or what you would characterize as sort of best in class around capacity. What are they doing that others aren't? And can you get other centers to implement these -- I mean, these programs to increase capacity?

It's a great question. I think it's one of the most important questions. Capacity is one of the words that I've heard the most and used the most for the last 16 months. And I think it's important we get specific on...

That and GLP-1.

Yes, exactly. The application of capacity. There's capacity in the market, which is where we add centers, there's capacity within the centers where you add physicians and there's capacity within their specific practices. And you're right, it is one of the bottlenecks in the process. And as we look at our utilization curve or the Pareto chart and on the far right, we have our fourth quartile, where they averaged about 5 cases per month per center, but get up to 20 cases per month per center, we see best-in-class practices that we're trying to replicate or clone across the country. And what typically is involved in those programs is, one, they have a very committed, connected, coordinated practice with Sleep and ENT together. And so they're working arm in arm in terms of referring, treating and managing those patients. That's absolutely critical in one of the pillars of success. The second part is they have a steady stream of patients coming in. So the pipeline is full and building so that there's a cadence of cases being done, patients being managed and they build confidence and conviction in that process. The third piece is administrative buy-in as you have these clinical champions working together with us to go to administration, whether it's a CFO or a service line administrator, and say this is the program that they want to invest in as well, which leads to the fourth piece, which is dedicated clinical resources within the practice as well. So APP is 1 example, but care navigators who spend their day and time helping us bring as many patients in who are qualified for this treatment as possible. Those are 4 key components we see in those best-in-class practices. And what we're doing is factoring that into our commercial strategy of how do we ensure that every program has those elements. And if they don't have those, how do we build them in. But I think those are core elements. Ezgi, anything that you would add?

Yes. I mean, one additional thing we're obviously working on is trying to get additional implanting surgeons per center. So that's been an ongoing initiative for some time, but I would echo everything that Carlton has said.

We had an implanter recently who did 9 cases in a day. [indiscernible] It's not the average, but it speaks to the opportunity. And within that practice, you have the elements I described and as they continue to run into constraints, conversational magic we have with our territory managers who say, you can add an implanter or you can add another room or you can add another day. And so -- and that's really the work of our commercial field force to figure out what are the barriers and how can we address those.

So I was going to ask what are the points of friction in getting centers to implement these types of practices? Is the biggest issue getting the ENT and the sleep physicians like to play nice in the sandbox or what is it?

It's market by market. That's certainly one of them and 1 that we try to diagnose early, do we have a strong connection Sleep and ENT. There is how do we build that? Sometimes we go into markets and there may not be a strong presence of either one or the other practices or specialties. And so how do we build that within the market as a part of it. But it really depends within the marketing and that's where our sales force, their expertise comes into play to say -- is it a number of ENTs? Is it the connection of the sleep practice? Is it the buy-in within the administration to dedicate resources and dollars to help support the program in patients coming through, it really is the market dependent.

And well, the other thing I hear too is just the ENTs are doing a lot of different procedures. So -- how much of it, too, is just getting the mind share of the ENT and getting them to devote time to this procedure which, to be fair, isn't an acute emergency procedure like some of their other procedures that they're doing are. So how do you navigate that?

That's certainly a really important part of it. There's the logistical component, but also just the mind share and time and I think different ENT are different motivators. The majority of our ENT implanters are head and neck surgeons who spend a lot of time on other things, as you said, oncology procedures, tumor, trauma, thyroids. And so for them to carve out a component of their practice for this, it needs to be meaningful. There's an economic component. But sometimes it's also just the intuition or the interest in doing something different to address the patient need that no one else can. We often have implanters come to us and say, I'm making a little more doing this or as much as other procedures, but these patients are motivated. And there's no one else to do it. And so I want to take that on and be the leader in my community so that we can spreading this to be an impact for more patients, more than just me. And so another motivator that we see is often early education and training. And we've mentioned medical education before, but our investment in academic centers because they're training the next generation and as they go into their markets, this is in their tool bag and they're excited to differentiate themselves as a new ENT in the market who can provide a therapy that no one can. So that's a part of the situation as well.

And I think it's always helpful you've framed this in the past, the number of head and neck surgeons and how many implanting -- just to get a sense of the runway. So can you remind us what is your target user market here?

I'll let Ezgi take the math on this one.

So in the United States, there are about 12,000 ENTs total. About 8,000 of them are Head and Neck specialists. To date, we've trained about 1,600 implanters, primarily those Head and Neck ENTs that we talked about. So plenty of runway to continue to train ENTs and that's another reason we're so excited about Inspire V. Removing that sensing lead, removing that additional step in the procedure, we think will open the doors for more and more ENTs to become interested in the procedure.

That's a really important point, if I can reinforce that. We've heard that from some of our existing surgeons, and we asked them the value proposition of the Inspire V and they say I'm excited as an implanter because it will increase my throughput, and I can take the procedure from 60 minutes to 45 or 90 to 65 or 70. And that will be impactful for me in my practice. However, I have partners today who are on the sidelines, and they're watching and waiting for the procedure to be a little more simple for the process to be a little shorter. And removing that sensing lead is not immaterial. And for them, it's the unnatural step of the procedure for surgeons who operate in the head and neck, the less fun part of the procedure. But although they do it today with over 85,000 patients safely implanted, it's still the one that gives them pause. Surgeons have told us that will bring some of my partners over, which again addresses this market capacity that we've been talking about. So again, a lot of reasons to be excited about Inspire V, and we can't wait to get that in the hands of our surgeons, new and old.

Yes, yes. Well -- and let's talk about the sleep physician component here, too, because you mentioned earlier, one of the tailwinds, the smart devices. I wear 2 of them, potentially diagnosing or I guess diagnosing is the wrong word, but alerting patients to obstructive sleep apnea. I'll tell you, I had a dinner with some sleep physicians who said their wait lists are already 12 months long, and this is 1 of the jokes that now with the smart watches, it's going to be 2 years. So how do you -- how are you working -- obviously, you're calling on the ENTs, but maybe talk about the strategy with the fleet positions too. And getting those patients in that ever-increasing top of the funnel towards an Inspire?

I think that is equally important, if not more, and I love that you asked the question and you're doing that research because as I described earlier, the connection of sleep and ENT is absolutely critical. And the reality is that sleep physicians are the ones predominantly referring and then managing postoperatively. And they already have busy offices. They already have a lot of patients that they manage. And so a large part of our strategy is how do we make it easier for them to manage patients and make it easier for them to screen and refer patients. And like you said, they don't have extra time, and they're not looking for more work to do. And so a lot of the investments we're putting into our digital platform, SleepSync is to make that more efficient. And as they manage patients at a larger scale, they are able to get some form of alerts and tracking patients in terms of adherence and other outcomes that are meaningful to them, so that it doesn't become an extra burden. If anything, it becomes actually a value proposition to them in their practice. And also, there's a halo effect associated with this as well as they see more Inspire patients, they're tracking patients for other conditions that they can treat also. And so I think sleep is a really important part of our strategy and some of the education investments we're making are specifically targeter at how do we build awareness, education and engagement with the sleep providers. And Ezgi, anything that you would add?

No, I think that covers it. I will just add, though, we've always known that sleep has been very capacity constrained. We're actually in the process of onboarding a third partner that can help us facilitate home sleep studies. So as you know, we have a partnership with Ognomy. We have a partnership with Lofta. So we do try to deploy these great companies and technologies where we can to take some of the pressure off the sleep community. So as you know, Ognomy is an app-based service where a patient can go and set up a telemedicine appointment with a sleep physician. They can ship the HSAT to their home. The patient can complete the sleep study in the home. Lofta works the same way. So these are great tools for us to keep helping the capacity constraints that have always existed in the funnel.

Yes. Okay. And can we talk a little bit about the DTC campaign. So we've all seen the Inspire commercials at this point. They're great. What can you say about the efficiency of that campaign? And you spent a lot of money initially, but now it feels like you've leveled off, you've gotten to a place where you feel like you're hitting the right target markets here. What has that -- maybe talking about how many patients are coming to inspiresleep.com or whatever? How do you measure how successful the DTC campaigns are?

Yes. And you're right. We continue to invest heavily in DTC. I'd argue it's one of the special components of our recipe of success over the last several years. And it's something that we'll continue to do. As we think about success metrics, there's a number of ways that our marketing team, which is best-in-class carves this up and there are metrics around how many patients come to our website. There's metrics around brand awareness. And proud to say that we're best in class in what we call unaided brand awareness, almost 50% of OSA patients know who we are without us guiding them to the decision around Inspire. Metrics around how do we think about conversion. And that's where we spend a lot of time. We talk about getting more efficient and smarter. It's not just patients coming to our website and knowing who we are, but how do we take those patients, engage with them and convert them over to actually patients who are treated. And so we have a lead nurturing program that allows us to gain information from the patients and be able to work with them to make it easy to get to an option to be treated. We have a digital scheduling program, which we're really excited about that allows us to take patients from awareness and interest to getting scheduled more quickly. Sometimes that gets dragged out for weeks, if not months. And sometimes that waiting period will be the leakage where patient says, "you know what, never mind, I was interested because I saw a commercial, but now it's taking too long. " And so we're making investments in the core elements of lead nurturing and digital scheduling that allow us to take those patients who we know are aware of us to pull them through. And as you couple that with the medical education and they go into a provider and knows who we are, convinced that this is a good option for them, it allows us to get to that treatment more quickly.

Yes. One other comment I would make, it's not just about going website visits. I mean our website visits are very healthy, but we're very focused on increasing high-value leads coming into our Advisory Care Program. So as you know, in December of last year, we relaunched our corporate website. It was our first update since I believe 2019 and part of it was it included improved questionnaire. So before a patient even calls into our ACP, our call center team has a better idea of whether they're even eligible for surgery. To Carlton's point, we do have a patient nurturing program. There have been hundreds of thousands of patients who have contacted our ACP over the last several years, shown an interest, may be eligible and provided their contact information. So we do have e-mail campaigns with those patients now, the ones that didn't get the procedure to bring them back into the funnel. So a lot of very, very exciting initiatives in our DTC program that are allowing us to get more leverage and better conversion on that investment.

That's an important point as you connected the dot to the earlier conversation around capacity. The last thing we want to do is bring awareness to a broader community, but [indiscernible] practice that aren't qualified or ready. We haven't checked the box on certain components of AHI or sleep test in the last 2 years. And so that lead nurturing component allows us to actually pull patients through and address the capacity so that surgeons and physicians aren't waiting time with patients who are ready.

How much is the digital scheduling tool being used right now? That's still pretty early in the rollout, right?

It's early. We're in about 250 centers. So we are very pleased with that, but we obviously want more. We do know that when a center has digital scheduling available, there is a 60% increase in the patient's ability to schedule an appointment on their first try. So that's a meaningful uptick for us. To your point, some of these centers have 12-month, 4-month, 6-month wait list. So if we can get on their digital scheduling calendar, that also means that they have to give us a block time. So when the patient contacts our ACP, our team members can just go ahead and allocate those patients to those blocks. So that does relieve a lot of friction and delays, and it's much better for the patient experience.

Yes. Okay. That makes sense. We focus a lot on the U.S., almost entirely in the U.S., but you do have an international business. And actually, your international business has been performing very well and driving some upsides. So maybe talk about the strategy internationally. And how big do you think international -- I know there's a ton of runway in the U.S., but how big do you think international is going to be over the next few years for you?

Yes. Tons of runway internationally as well as let's say, obviously, a global disease. As I described earlier, a part of the strategy is to focus and prioritize. And our focus is predominantly here in our domestic market, given the opportunity we have and the runway we have, but it doesn't mean that we're ignoring those opportunities. We're just looking to be very selective and strategic. And what we've laid out is, I'll call it a corporate framework for the key questions we have to answer. And they're the basic components that are similar to the U.S., you think about clinical and regulatory reimbursement all of which depends on good data that shows that this is a safe and effective therapy. But then when you get beyond that, there are nuances across geographies related to the components of sleep and ENT that we discussed. There are nuances in terms of DTC and patient education, what you can and can't do in different geographies. And then also, how do you think about the post-op management in some markets, like I believe it's Germany ENT, it's a 3-day stay in a hospital after the procedure compared to the U.S., where patients are going home the same day. That has an impact on the ability to drive therapy adoption. In some markets, it's even longer in Asia. And so we are continuing to invest in today, our revenue outside the U.S. is a little less than 5%. I wouldn't expect that to jump in a step change fashion in the next few years, but we will continue to expect to see meaningful growth that's ideally accretive to the growth we have in domestic market. Anything you'd add, Ezgi?

No, I think that covers it. I mean we did just receive country-wide reimbursement in France over the summer. So we're looking for greater contribution from France going forward. We also expect our business in the U.K. to show some acceleration heading into next year. So we're extremely excited. But given the strong growth, we expect out of the U.S. to Carlton's point, it's going to be difficult to break through that [indiscernible].

It's so important. And even as you think about competition as we referenced earlier, -- but today, we compete in 1 market, which is Germany, and it's important that we continue to show ourselves as the best, not just the first mover, but the leader and the best provider partner -- a partner for providers there. And so there's another reason why planning seeds internationally, even if we're not investing heavily there is important for us strategically.

Yes, that makes sense. So we'd be remiss if we didn't talk about the TAM. You guys told me you're not updating your TAM here, which is rude, but that's fine. But maybe talk about how you guys have characterized the TAM. And specifically, I'd love to hear a little bit more on GLP-1s and the impact there because I think there's a lot of confusion out there about how GLP-1s are actually going to impact the TAM here?

Ezgi, do you mind starting on the math of how we define [indiscernible].

Sure. Historically, as you know, dating back to the time of the IPO, it wasn't even our work, but the bankers put together some wonderful models and slides. And what they did was they went through and surveyed all of the filings of all the CPAP manufacturers. And basically, they came to the conclusion that about 2 million novel prescriptions are written annually for moderate to severe OSA in the U.S. We think that's still a very good number, if not growing. And based on that, we also -- we looked at our indication at that time and our anatomical requirements and eligibility requirements. And so we screened out patients for both CPAP compliance as well as our FDA indication, and we came out as an incidence rate of about 500,000 patients annually that were coming into the OSA market for us. And as you know, last year, we implanted about -- or our clinicians implanted about 25,000 patients. So we're 4.5%, maybe 5% penetrated into our annual incidence rate with plenty of runway to grow. We are working on updating our market model. We are looking at some prevalence numbers, but we'll hold off on that. But I will say it does confirm that this is a very large and growing end market.

Although we're not doing a grand reveal today, the punchline is that the market is even bigger than what [indiscernible].

I just appreciate you guys being here. So that's fine. And just on the GLP-1 point, I mean that's -- the question I get a lot, and we're coming up on time. So this will be my last question. But the question I get a lot is if a patient wants to drop their CPAP, why wouldn't they just go on and try a GLP-1 first and is that going to cause an air pocket in the funnel?

We've gotten the question often and what we hear from our provider partners and again, mostly anecdotal today, but more data coming in is that it doesn't seem to slow down the funnel. If anything, it's being prescribed more incumbently. And so it's not delaying patients getting to Inspire. But we have had very clear examples of more patients coming into the funnel, who were screened out because of BMI, but then went on the GLP-1, came into the indication range and now being treated. What we say is they need to make sure they keep their weight down, they keep their BMI, so the therapy is as effective as possible. But that's a positive, right? That's more patients coming into the funnel, compared to what we're hearing or some are expecting in terms of delay. We're just not seeing that air pocket today, not to say it doesn't exist, but we're not hearing as many examples of that.

I mean I agree with all of that. The punchline, I think, is anecdotally, when we speak to our clinicians, the #1 reason they turn a patient away from Inspire is due to their high BMI. So we think this is going to be a very complementary market opportunity for us.

Yes. And I would agree. So with that, we will wrap. Thank you guys so much.

Thank you so much.

Thanks, everyone.