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

Before we get started, if you are a member of the press or media, please disconnect at this time. This is a restricted line. Any unauthorized party in this meeting or any unauthorized use of the information communicated in this meeting is subject to prosecution to the fullest extent of the law. Any unauthorized person, including the media that is on the line at this time, please disconnect. Please note, today's call is being recorded.

All right. Good afternoon. For those of you on the East Coast, good morning for those of you in the Midwest and the West Coast. I'm Larry Biegelsen, the medical device analyst at Wells Fargo. Welcome to the next call in our 2025 MedTech Innovation Spotlight call series. I'm pleased to have the management from Inspire, Tim Herbert, Chairman and CEO; Rick Buchholz, CFO; and Ezgi Yagci, Vice President of Investor Relations. On today's call, we'll talk about the launch of Inspire's latest innovation Inspire V and its future development as well as the commercial and competitive dynamics in the OSA market. As always, if anyone has a question. Let me -- okay. Let me keep going -- okay. Tim, Rick and Ezgi, thanks so much for joining us. You guys have been strong supporters of this call series for many years. So thank you.

Very good. Thanks for having us.

So before we jump into Q&A, I know Tim would like to share a few slides and video. So Tim, over to you.

Very good. Did I do that correctly, and you can see the slides there, Larry?

Yes.

Fantastic. Well, thank you, again. Thanks for -- we've done this in years past. We really appreciate the R&D spotlight call. I think it's a very special series that you conduct to really be able to focus on the technology behind the products and talk about how they're able to really help patients. And we thought we want to get started today and just kind of show you some introductory slides because we are so excited about our Inspire V launch, that you know we just launched. And of course, we have our own disclaimer slide there. But first off, really just showing a slide on what Inspire V is, right? It's a 20% reduced implant time to improve the therapy performance. But we have incorporated the sensing inside the neurostimulator. Whereas we used to have a separate pressure setting lead to detect respiration, and now we've incorporated that inside the can. And the key to it is talking about sensor performance because if we're able to more accurately measure a patient's respiratory cycle, we're in a much better position to deliver stimulation synchronous with the inspiratory phase, which we all know is very critical and having the optimal outcomes with Inspire. And of course, in the process, we have a new remote control that we released that does have Bluetooth communication. So it can communicate with the patient's app on their cell phone, communicate with SleepSync, which is our cloud-based patient management system. The physician programmer is new to Inspire V too that that also directly connects with SleepSync and now physicians can just use their own laptop or their own tablet to be able to communicate with the device in a patient's body and all the performance parameters are saved to SleepSync automatically, whereas with Inspire IV you would have to manually upload those and connect the cable to be able to upload all the data into SleepSync. So we're really in the process of streamlining patient management, streamlining the flow. I think it's important we wanted -- we had a training video that we show physicians to really talk about the necessity to do closed-loop stimulation. And so I want to run that, and I think instead of me talking through that, it's really a lot more effective, but we can kind of just let you watch a video and it really kind of helped us explain it. And on the bank side, I'm going to show several posters that have been presented with Summit at the SLEEP meeting this week in Seattle to show the performance of Inspire V and the performance of the Inspire system. So let's run this. [Presentation]

So I think that training video really kind of summarizes why we do what we do, how the technology is advancing and being able to take the knowledge from the 100,000 patients who have received Inspire therapy and be able to apply it to our fifth generation that really sets up the platform as we start moving forward. I want to show you just a couple of other data points that we looked at and introduced a couple of concepts that we talked a little bit about. The first one, this was presented back in 2024, but this talks about the clinical data that we used to show the FDA the efficiency and the effectiveness of the Inspire V neurostimulator, and what we did is we had 56 patients who had either an Inspire II device or an Inspire IV device in their body, but we can attach an Inspire V device externally and use their patients as their own control. And the key measure that we want to track is right here the inspiratory phase overlap, or what we call inspiratory overlap and how much inspiratory cycle, are we able to capture with our sensing. And if we can capture that, therefore, we can now provide stimulation synchronous with the inspiration, and that's the critical phase that we need to provide to the patient to prevent obstructive events. And you can see we've been shown to be quite effective with the device. So as an example, when we start looking at the commercial system, this is Inspire IV, but when we went to an accelerometer, we can tune that up and actually see if we can't get better respiratory patterns and increase that respiratory overlap, right? And so when we look at the commercial systems, we were running at about 78% of the inspiratory cycle we could detect and provide stimulation. But when we went to the accelerometer version, we were up to 83%. So we need to demonstrate that a noninferiority at a lower 90% confidence bond that the Inspire V system is at least as effective, but what we want to show is potentially that the effectiveness of the sensing is even better with the Inspire V device versus the Inspire IV as shown in these pictures. So that's the key as we go forward. If we can improve the detection of respiration, we can deliver the therapy most appropriately when we need it, and that, in turn, further increases the performance of the Inspire system. Take that to the next step. This was just presented this week. This is the first results from the Singapore data. So before we started our limited release in the United States, we actually went to Singapore, and we did a study with 44 patients who prospectively received Inspire therapy. And we did it at 2 centers, pretty standard demographics, that we experienced with the AHI of 37 at the beginning. Implant time was documented to be 20% less compared to implants of existing Inspire IV systems, and remember, the sites in Singapore are experienced Inspire sites and they have significant experience with the Inspire IV system. What's really nice that we measure is the nightly usage have 3 months post implant. And you can see the total time, 6 hours per night on average with 6.2 at Singapore General and that National University, 5. 6 very, very impressive. Now we have several other key features that have been incorporated into Inspire V that we learned over the years and one of them is a smaller step size. What that means is the patients have the ability to titrate their own therapy with the remote, and they used to be able to go up in step sizes of 1/10 of a volt. But sometimes we found that, that just wasn't specific enough. So with Inspire V, we can now go up in 0.05 volt increments and very important to get more precision stimulation for the patient. Then we have ramp duration is how long instead of the device is turning on, the device will now turn on. And so it's more comfortable for the patient when they go to sleep to be able to have a therapy titrate at a lower level, allowing them to sleep and then be more comfortable before it gets up to the therapeutic levels. And so really important with the new features, we've been able to really demonstrate those. And we're going to be able to show more data as we go forward because we're going to be collecting the AHI data at 6 months with additional feature usage. Finally, we wanted to come back. There's another unique poster there because there's been some discussion of supine AHI. And this was a study conducted by St. Luke's Health in St. Louis on their own accord. And we were able to go through and talk to them about their data. This is a large study. It's 59 patients. And they wanted to measure what happens with supine versus non-supine. And is there an impact with the Inspire system. And what we know is that we titrate our patients when they're in the supine position because, of course, we all know, gravity is a key part of sleeping. And so on your back, your pump can fall back into your airway. And their data suggests that hypoglossal nerve stimulation is effective regardless of sleep position. And if you kind of look through the percent of patients that were responders, again, this is the sheer criteria where -- and the sheer criteria is defined as a reduction in AHI of 50% and a result in AHI in this case, less than 15% and you can see the success rate in positional sleep apnea is over 80%. And in the total sample size over 72% -- 73%, this is an independent study by St. Luke's that significantly improved versus the STAR trial because the STAR trial was conducted back in 2012, there's so much more information we know on how to select patients, how to design the technology, and then how to apply and manage patients to be able to improve our efficacy. So this was nice to walk in and see St. Luke's Health actually have a study independent of Inspire to show not only the efficacy that we've come to expect with Inspire, but to also come back and really put to bed the whole argument of supine sleep saying that Inspire is designed for has managed supine sleep for years since the beginning and will continue to be effective as we move forward. So we're very excited to have launched -- the full launch of Inspire V in May, and that's really just the slides that we wanted to cover there. So I'm going to stop sharing and kind of hand it back to you and see if you have any questions in regards to the slides or anything else with Inspire?

I definitely have some questions on the slides and Inspire, Tim. And just maybe it's worth pointing out to people that those slides, which are a little hard to read on the screen were included in your 8-K this morning. So people want to see the details, they have them.

Thank you. Yes.

I definitely want to follow-up on some of those things. But let me ask you one big picture question. You guys have reached an important milestones over the past year, Inspire V approval and launch, sustainable profitability. Talk about your top priorities for the remainder of this year and key milestones for the company over the next couple of years?

Yes, absolutely. I think that our priority is obviously the launch of Inspire V and how excited we are. And we did announce that 100,000 patients have been treated with -- or have received Inspire therapy and what a key milestone that is in the -- be able to learn so much of those patients and apply that learning to the Inspire V system for years in the development efforts and now to be in the full launch. So that really has been our focus going forward. We've made significant progress. Certainly, having the inventory levels to be able to support it. We had confidence in the performance of the system, but we just weren't able to go to full launch until we had the inventory levels to really support the full launch. So we've been doing a limited market release since the late in 2024 going forward. We're going to continue to focus on growing the adoption of Inspire therapy. And really, we know that we're lightly penetrated in the overall target market. And so just really probably a small digit penetration. So really, our focus going forward is continue to focus on growth and focus on growing the adoption. And now we have a new tool of Inspire V and that allows us to start the development on Inspire IV and to really keep focusing on the development along our SleepSync, which is our cloud-based patient management system. So very exciting times at Inspire and we look forward to the ongoing activities.

Perfect. So let's move into Inspire V. As you mentioned earlier, you announced the official launch in May. You just had the SLEEP meeting in Seattle this week, which I know you attended. Talk about any feedback and learnings from the launch? And what did you hear? What was the buzz like in Seattle?

Well, I think some of the abstracts that we just showed you kind of talk a little bit more quantitatively about the performance of the system. What we're seeing with the inspiratory overlap, what we're seeing with the ability to improve the implant time. All the implants were successful, that's very key. Safety performance, as you saw were strong. So I think when we get to Larry Biegelsen, the medical device analyst at Wells think the s Seattle, we get to talk to physicians more so about the qualitative aspects of it. What do you think about the Inspire V device. What's your reaction today with your experience? And it's not the limited market release sites, but now we have formally launched the product, and so we have more of an expanded network to get feedback. Number one, I think the surgeons' ear, nose and throat, right, ear, nose and throat, they really appreciate the ability to 34plant the Inspire device without placing a pressure sensing lead in the chest wall. And it's always been a little bit of a part of the surgery where the ENTs don't go every day. It's a safe procedure. We've performed that over 100,000 procedures. But that's the one part of the procedure that wasn't most comparable for the ENT. So first comment overwhelmingly is not putting in the pressure sensing need is really a very good -- very nice, desired change. Number 2 is the reduced OR time is very noticeable. And they -- as they place the electrodes and tunnel once they place the neurostimulator, they know they just do the final intraoperative testing and close, and they don't have to deal with the pressure sensing needs. So quite an advantage going forward with reduced time and that really makes difference. I think what they're starting to learn too is the added features that we put in, especially the more of a soft launch or the soft ramp of the amplitude. So it's more comfortable for the patients during therapy, and that's something that we've learned over the years. And until you get such experience with technology, it's -- you won't know that to be able to apply that into your devices. So I think that's going to be one of the benefits that we have going forward. So the feedback has been very positive to date and really look forward to doing more Inspire Vs.

Tim, you talked about the accelerometer or the video or you, I can't remember talking about the accelerometer more accurately measuring respiration. Why would the accelerometer do that better than sensor lead?

While technology is better off for many years, accelerometers have been standard technology and rate responsive pacemakers, where if you go jogging, your pacemaker's spare pace is faster because it's measuring your respiratory rate. So it is a proven technology that we're able to apply into the Inspire V device to improve that. Secondly, the pressure sensing lead, while it was quite effective, and you saw it was in the high 70% inspiratory overlap provided a good respiratory signal. There is always some rotational element when you get between the intercostal muscles and some interface on how we're measuring it and if the patient is moving a body position, so I think the accelerometer just provides a much stabler environment being inside the can and the can is always flat in the chest wall in the patients, and it's not as susceptible to patient movement. So we've already shown a little bit of improvement. And I think as we progress further, that we'll continue to document improved sensing.

And Tim, you still expect to complete the transition to Inspire V by the end of the year. Just remind us of the timeline for the kind of full transition, please?

We do. We're making very good progress right now. We've trained the majority of the surgeons. Again, the surgeon is relatively simple. They do it's a self-training on a tablet where they're able to go through the slides the primary focus is saying, you don't need to implant the pressure sensing need anymore. How does that change interoperative testing? What are the new features of the device with step function and ramp. And so I think the training goes relatively quickly, and then the surgeons sign that off, and they are qualified. Step 2 is the contract phase where we have an addendum to the pricing agreements at the centers. All the contracts are out to the sites. It's a relatively simple change. You're just adding a model number. And as you know, we have not changed the system level pricing. So we don't need to go back through the value-add committee. So it's a very straightforward process. We're making very good progress with that. And the third step, as mentioned in the slides is that we have gone to a new physician programmer that directly interfaces with SleepSync. And therefore, this sites need to be on the SleepSync system. So the data changes that they make when programming a patient's device are automatically stored into SleepSync. So the majority of the top centers have already been on SleepSync. And then new programmer was approved by the FDA last year. So it's been in play for quite some time. But we need to work to make sure all the centers adapting to Inspire V are on SleepSync. So that can take a little bit longer, up to 30 days or lagger if you're a sophisticated site working with the IT departments. But we're quite experienced incorporating that. We don't see that as a long-term showstopper. And so yes, the way we fully expect to be transitioned to Inspire V. That said, Inspire IV, it's still available. And so if sites wish to remain with Inspire IV, if the physician desires to stay with Inspire IV, it is -- will continue to be available, but we believe the majority of surgeons once they start in planning V will quickly transition over to that -- the fifth-generation device.

Tim, sticking with clinical data. You've got World Sleep in September, and then I think you have the ISSS meeting in October. So you're going to show additional data sets. September, I think it's going to be where data comparison for Inspire IV versus V. Why is that important?

Well, then actually we showed a little bit of that in the first slide. And the WARE data comparing IV to V, that's actually the data we use at the clinical study we conducted to give the data to the FDA, so they had confidence in the sensing and the algorithm of Inspire V. And with that data from the WARE study, that is what the FDA used to give us approval. The Singapore study is actually a post-approval study where we're conducting additional evidence to show. And with them, we can collect AHI data as well. And we're going to be showing some of that data when we get to World Sleep and when we get to the International Sleep Surgical Society meeting, which, by the way, is right in front of the big meeting, which is the American Academy of Otolaryngology, which is the ENT Society meeting. So yes, we have ongoing data generation and ongoing data reporting. And so it will be a big fall to be able to show some additional data.

So you're going to show 6-month PSG or sleep study data on Inspire V at ISSS AAO.

We're going to try and get that data done. It's going to be tight to be able to get through. So that's the intent is to try and get most of that data available.

I mean you talked about improved therapy performance. It was a heading on one of the lead slides. Is there anywhere besides the titration that you talked about that more comfortable for the patient anywhere you think you might be able to show a clinical benefit for Inspire V over Inspire IV.

Well, I think the real clinical benefits is going to be the reduction of the comorbidities because those are the ones that take longer periods of time in larger numbers of patients to be able to monitor. But we are monitoring all those. When you look at the sleep premiers at AHI, we're certainly going to be looking at that. We did show you the slide from St. Louis -- or St. Luke's in Medical Center in St. Louis that showed significant improvement from the STAR trial in the share criteria with the AHI responder rates pushing high 70%, that's just phenomenal with the study of up to 60 patients and also showed well supine AHI never been a concern of ours. We've been treating that since the beginning. But I think that's one independent study that shows AHI. We expect that -- we look forward to monitoring that data with Singapore as well because it's not just Inspire V. It's what we've learned over all these years in STAR. STAR, think about that. We conducted those implants in 2012. That's -- we're in the year 2025 now. That's years ago and 100,000 patients later and the amount of learning we have with patient selection, with implanting of the device and our outcomes today, far surpass what people are comparing to back in the STAR trial back then. And the St. Luke's data is just one little piece of evidence to show our performance today as far as significantly improved versus what we had at the STAR trial. So yes, and we're going to continue to generate more evidence ourselves as well as our physician partners and our centers continue to generate it. What was really exciting at the SLEEP meeting is when we walk to the poster sessions and all the fellows doing research, and there's a whole row of people investigating different aspects of Inspire therapy. And it's really proud to be able to walk down the road to talk to the physician, talk to the fellows, let them understand the research that they did. Why did they choose to do research on that and how they're going to continue that forward and we will partner with lot of them to continue pushing that research because it's just learning across the board.

Tim, a couple of other questions on Inspire V. One is you've talked about the procedure time being 20% faster, but the surgeon fee is also lower. You've talked about surgeons being able to do more cases to make up the difference. What are you seeing? What are you hearing on that front? The kind of time savings, but objectively, slightly lower surgeon physician fee.

Yes, it all kind of works together. Let's kind of walk through it a little bit. We know that when surgeons do more procedures, they become proficient with the procedure, and therefore, they can do more cases because the OR time or the surgical time in the skin to skin has significantly reduced. A couple of examples. We have a surgeon in Hamburg, Germany, he is very well versed in the Inspire procedure, but they have done 12 cases in one day. That was with Inspire IV. Now in their situation, they can -- they're very proficient. They do their procedures quickly and they had 2 different rooms. So as they're cleaning one room, they go to a second room do another case, and go back and forth to the day, but they're doing 6 cases in a single procedure room during a day with Inspire IV. In the United States, we've had a couple of instances where physicians have done 9 cases in one day with Inspire IV. We know our top physicians can do the procedure in about 30 minutes. We think on average, we talked about Inspire V procedures being between 45 and 60 minutes, but we know that with practice and becoming more proficient, we can really get that down to about 30 minutes. And when you start talking about the reimbursed rate $600, which is a national average Medicare payment, of course, commercial payers pay higher than that. That calculates for a national average Medicare procedure at 30 minutes of $20 a minute, and that's as strong as any other procedure that they do. With Inspire IV, it's a little less than that, but that still a very strong reimbursement rate on a per minute basis for this ENT surgeons. It's really about driving efficiencies, though not just in the operating room, and that's one example of what Inspire IV does. By driving that implant time down, yes, it's a reduced reimbursement, but there's reduced work. And the work that's reduced is the work that the ENTs don't want to do, which is placing the pressure sensing needs. So it really works together. But again, just we also have to build efficiencies outside the operating room. So the ENT surgeons can spend a lot more time in the operating room, one example is we talk a lot about training APPs, Advanced Practice Providers, which are nurse practitioners, which is physician assistants to be able to communicate with patients, give them patient education tools, make sure that help them do the process. So the ENTs don't spend their time in the office with education aspects, but they can spend their time in the operating room doing procedures where they can take advantage of the strong reimbursement that Inspire has at $20 a minute for an Inspire procedures. And if they can do more cases in a day, they can generate appropriate revenue for their practice. So it really works hand in hand just building efficiencies outside, inside and improving technology to maximize the reimbursement that's there. And for those physicians, if they really want to continue doing Inspire IV. Inspire IV is going to continue to be available for them for a period of time. But I think once we get experience with Inspire V and improve their time to do the procedure and not have to implant the pressure sensing need, we will see them convert to V. And we won't really talk about this reduction in reimbursement.

Just remind us, Medicare is what percent of U.S. implants? And do you have any idea like how much higher the physician fee is for commercial versus Medicare.

For hospital and professional fee, we estimate commercial pay about 1.4x that. And generally speaking, commercial cases make up 65%, 70% of our cases, Medicare can make up 30%, 35%. And then there's the VAs and military can make up 5%. So if I did that right, it doesn't add up to 100%. But generally, those are the numbers that we've always talked about.

All right. That's helpful. And Tim, on the Q1 call, you talked about Q2 sales growth being slower because of patient warehousing in anticipation of Inspire V and...

Right.

Work down of inventory of Inspire IV at hospitals. Talk about what you're seeing on these two fronts so far, please, and if things been in line with your expectations.

I think they have -- when we get to the Q1 earnings call, we had been on an extended limited market release. And so we spent more time with the center's understanding the dynamics there. And I did see that. We did have -- some patients who chose they want to wait for the Inspire V device and that's fine. And those are patients that really aren't in the queue yet, right, because the doctors aren't going to put them into the queue until they have a chance to get Inspire V contracted, trained and available at their sites, and then they'll come back and get them in the queue and get them taken care of. We also know many sites are working with a backlog of patients. So the patients already in the queue. They're going to be offered Inspire V as well. So we did see a little bit more of that, so it's kind of in line with what we were envisioning beforehand. Warehousing of existing inventory and working that down. That's in process as the sites come on board, they work through their Inspire IV inventory, and then we build with Inspire V as they do their transition. So consistent from what we reported at the Q1 call.

Okay. So no surprises from your perspective, things are playing out as expected.

Yes.

Okay. That's helpful. Let me just scan my questions here. I mean you think the bottom line is, Tim, on this physician fee change. Do you think it's kind of overblown? It sounds like, I mean, I know there's been a lot of investor focus on that. You think that the procedure time reduction is neutral to more than offset that.

Yes. And the concerns are not unwarranted. We understand. I mean everybody with a physician, follow the dollars, we've heard that before. But the key to it is the reduction in the reimbursement is commensurate with the reduction of associated work. Now if they were doing the same procedure to procedure and the reduction goes down, that's a concern. But in our case, it's a reduction of work with a commensurate reduction in reimbursement, but a reduction in time, allowing them to do more cases in a given day. And it's not just the professional fee with additional cases in a day that adds a significant amount of revenue to the site of service, the hospital or the ambulatory surgical center. So there's a greater benefit with the reduction of surgical time on a broader picture. So no, the concerns are not unwarranted. But I think -- I don't want to say it's overstated. But I think once you -- the physicians get comfortable with Inspire V with the reduced OR time with the benefit it brings to hospitals or if they're a part of ambulatory surgical centers and the benefits that it brings the overall ASC, I don't think this is going to be an ongoing discussion.

Okay. And just one more kind of guidance question, maybe, Rick will jump in here. But the 2025 guidance, I think investors are concerned about the back half ramp. What gives you the confidence that that's realistic, remind us of what's baked into the guidance for competitive trialing, please?

Yes. We did assume some competitive trialing in our guidance for 2025. What's included in our guidance really for the second half of the year is continued increase in capacity by adding more centers and more surgeons, and also the improvement on productivity from a surgeon standpoint.

Okay. So as you sit here today, Tim, still confident in the second half ramp.

Well, we're confident with Inspire V and what's exciting is to be able to show data and to show feedback from the physicians that the excitement around V is real. We have the inventory to support the full launch with a stable production line. And so we're very excited about continuing the rollout of V and taking care of patients.

Okay. And I know, Tim, you love talking about the pipeline.

Sure.

We love talking about it, too. So Inspire V, you've talked about it as a platform for future upgrades. What share -- some of -- how you're thinking about these future upgrades?

Right. In the video, it did show kind of some pictures of the insides of the neurostimulator. It's state-of-the-art. And the technology that we put in there with our integrated circuits and microprocessor-based system really allows us to take this to the next level. And so one example is we're already working on Inspire VI right now. And the message that we had at the SLEEP meeting right now is we know to drive outcomes; we need to have the highest level of inspiratory overlap because then we can provide stimulation during the respiratory cycle and that helps us prevent apneas and that gives us the highest level of outcomes. The second part of that statement, and this applies to CPAP and everybody else, if the patients don't use the therapy, it's not going to be effective. So therapy usage is so critical. And what we showed from the Singapore data is we're showing patients using the therapy over 6 hours a night. That's really fantastic. And we want to keep pushing that. So if we can maximize therapy usage or maximize the patient's adherence to therapy, that's something that's really going to be an advantage patient outcomes and that's what we're all about. When we go to Inspire VI, the concept of Inspire VI and what we're targeting to do is detect sleep. And so we all know when the patient can fall asleep. And when the patient wakes up and the vision is that we are going to be able to turn the device on when the patient falls asleep, turn the device up when they wake up. Then we're taking therapy adherence to the highest level, and along with the therapeutic stimulation because of our closed loop system, we're going to have outcomes that are going to be even better than they are today. That's what we're really targeting. So very excited about VI. When we go to future generations, we know that we can detect with our internal sensing if patients are having apneic events or if they're having -- what position they're in and we can start to detect the performance of our system internally to our device and then longer term, apply that learning to be able to have a device that may be able to auto titrate and auto adjust during a night to optimize outcomes throughout the night, similar to what you hear and see with the auto-titrating CPAP machine. And auto-titrating CPAP machine senses when a patient breathes and knows that it needs pressure high enough when the patient breathes in to prevent apneas and lower pressure when they exhale, but it optimizes that pressure to get outcomes. We're doing the same thing except we have our device inside the body and stimulating the hypoglossal nerve. So a lot of excitement around that. And really, this data is going to be captured into our SleepSync. And now all of our centers will be using SleepSync, with the Inspire V, and so we'll be able to get a good view of outcomes across the board to be able to take those outcomes to the highest level. And it's also a tool that help centers efficiently manage their patient flow because we know they're going to be seeing a lot more patients, and we need to make sure that the sleep positions are also equally set up to be able to manage those patients.

So if I go back to Rick's comments earlier. Basically, Inspire V, it saves time and some centers are going to be able to do more procedures, it's an easier procedure because you're getting rid of the center lead, so you're going to get more new surgeons. And that's part of like that's the formula for accelerated growth. Is that is simple...

Well, that's what we want to do. Take existing centers -- and so existing centers can do more cases in a day like we talked about. The centers are working on a backlog today, and we still have strong patient demand, and so we need to go to those physicians say, we need to train your partners to build some capacity at these existing centers. And then finally, we're going to continue to keep opening centers as we have since approval back in 2014, we'll keep adding new centers as well. So it's really a 3-pronged event and really taking advantage of what you just described with the benefits of Inspire V, not only reduced OR time, comfort with the surgeons to do the procedure now that they don't have to go into the chest wall. Some of the surgeons that are trained today, but they just don't do a significant number of procedures, the low productive accounts. Well, now we get to go back to them and say, hey, remember that pressure sensing lead, that's gone. We don't do that anymore. Now you can come back and do it just a stimulation lead and the neurostimulator that's kind of more in the wheelhouse of the ENT surgeons, and reengage those previously trained surgeons. So that's a big effort that we're putting in right now, too. So of four different groups that we're going after that that can help us treat an additional -- the new wave of patients coming through.

I mean, Tim, it's so early, you just had the full launch in May. Are you seeing any evidence of that where surgeons -- some of these new groups of surgeons saying, hey, now that the sensing lead is gone. I want to do -- I'm interested.

Well, it's too early, as you say, but whit the surgeons that have it, we know what the positive experience. And we know a lot of the -- even the surgeons in the limited market release, they had patients waiting for Inspire V or they had patients in their mind waiting for Inspire V. So we already know with those centers that they want to be able to do more cases as well. So early on, but even with the LMR side, we're seeing positive activity.

All right. All right. So 14 minutes left and you've got this exciting Inspire V launch going on, but there's more kind of, I guess, noise in the market, if you will, with [ competition ] drug therapy. So let's try to tackle that. GLP-1s someone sent me an article before this call from mid page today that talked about interesting GLP-1s among sleep apnea patients that was discussed at the SLEEP meeting. What are you seeing? Is this -- we know there's the puts and takes? Is this kind of net neutral? Is it too early? What are you seeing today?

Well, yes, it's too early. I mean, Lilly had presence right next to us at the SLEEP meeting, and there's still trying to figure out how the sleep physicians are going to manage patients on GLP-1. It's not -- they're not set up to do the prescriptions and do the management. While they wanted the patients on CPAP, they can also refer them either to their weight management clinic or back to the family practice doctors to have the weight management clinic and the family practice doctors prescribe the GLP-1s and manage that long-term. And I think that's what's really happening today. But when the patients come to the sleep physicians, they don't want to wait 6, 8, 9 months to see if it's going to work. They're putting them on CPAP right away. So we're still trying to track how that all plays out. In the end, we know there are a lot of patients with the high BMI that we're just unable to treat because of the lateral wall collapse and hypoglossal nerve stimulation does not treat complete concentric collapse, period. We all stimulate the tongue and move the tongue forward. We don't stiffen the lateral walls. That's a different mechanism, a different nerve bundle that needs to be stemmed, and we're continuing on with our own research to do that as well. But I think the GLP-1, the concerns aren't as great. We're tracking it really closely to see how patients are responding to that. But again, what we hear is and what we see as patients actively on GLP-1s in our range coming into receive therapy, and we put some of that data out a couple of quarters ago as showing patients that actively receiving Inspire therapy while on a GLP-1. So we know it's real, and again, a little bit early days, but we do expect that, that will continue to -- GLP-1s will continue to increase awareness of sleep, which is great. We'll be able to treat patients with a high BMI, and hopefully, reduce the lateral wall collapse to make them qualified for Inspire. And for those patients that don't have tongue-based obstruction, and they can take a GLP-1 and reduce their AHI to a mild or normal range. That's great. But those have never been our patients anyways because they don't have tone-based obstruction. So we like the GLP-1s and we continue to monitor the progress and think that it will be complementary to Inspire in the long run.

Tim, I'm sure you monitor kind of the top of the funnel. You probably have hits your website, maybe you monitor dice tests and things like that, other data. Are you seeing any impact of GLP-1 positive or negative to kind of the top of the funnel?

Well, it's hard to tell even pinpoint that. I think that we continue the funnel, but it's more of a function of our DTC and how we build our awareness. And we purposely took our DTC down a little bit at the beginning of the year as we were preparing for the launch. And now that -- we've got into V. You're going to see that increase through the year. And so it's kind of hard to see what's driving that activity. But I think, we've monitored the GLP-1s, and it's just not that evident yet, but we continue to communicate with our sleep physicians, our ENTs to see the patient demand. But we know the demand remains high, and we know most of our big systems are working off quite an extensive backlog.

All right. So let's talk about -- you're going to face the first competition potentially second half of this year, assuming Nyxoah gets approval in the second quarter. Maybe at a high level, how do you think -- what's the basis of competition here? How do you think physicians and patients are going to choose one device over the other?

Right. Well, again, let's go to the highest level. I think just like we talked about GLP-1s being beneficial to the overall sleep market, diagnostic tools get better and are increasing the overall diagnostic rate for sleep. Competition could be a good thing, right? Competition can build awareness and can show credibility for the technology. The challenge is the competition has to provide the proper level of safety and efficacy as well. So any competitor coming out and if they get approval, they're going to make sure that in a real-world setting that they continue to deliver that. And the market is going to decide their presence going forward. So yes, I think with the success that we've had with our new technology, we know we're going to have competition. There's no question about that. We know there are numerous players out there. But we've really dug in and we worked hard to develop our technology and really build our position, just launching Inspire V and showing evidence that comparing to our data back in 2012, no, no, no the markets evolved and the efficacy expectations are much greater. Having all patients receive proper therapy is really important. So the safety profile is something that the market is going to closely monitor. I think if they get approval, I think, yes, the academic centers it's their job to test new technology to see how it stacks up, do they have a positive experience with it or the patient's kind of weigh in. And so we know those sites are going to do trialing, and we don't have any issue with that. And I think that's fine. I think that we'll continue to do our job with our new technology, continue to invest in our R&D, as we talked about and keep pushing outcomes higher and higher and higher, and keep raising the bar and making it challenging for the competitors to adapt technology and be innovative to be able to bring new things to the market. But I'm sure we'll continue to have competition in years to come.

Tim, the [indiscernible] tried to differentiate themselves with the supine versus non-supine data. Do you think that the data you showed us earlier 59-or-so patients' retrospective. Is that enough to kind of neutralize their kind of marketing message? What's the plan for that center to publish that data.

Well, first off, it's always been a nonissue that since I've started on Inspire back when I worked at Medtronic, we knew. And I think it was in the video, I think that he talked a little bit about synchronization and also talked about without synchronization increase in AHI and especially in supine AHI. We all know you have to treat supine AHI primarily. And if you roll on your side, it's lot easier to treat those patients. So we've been dealing with supine AHI, since the beginning of the Inspire project. It's part of our FDA approval process. We titrate our patients in a supine position. So it's a nonfactor. But here, we have an independent site conduct their own research to kind of put that to bed, and then we're going to continue to show more and more data about how we treat supine AHI. So we don't think that's really going to be a significant factor at all.

And how are you guys going to address complete concentric collapse another area that Nyxoah and LivaNova are trying to differentiate themselves?

Well, the key is going to be they both stimulate the hypoglossal nerve, and we know the hypoglossal nerve stimulates and intervates the gene glosses muscle, which is the tongue muscle, both of the therapies move the tongue forward. And I think the key to it is by moving the tongue forward, you cannot stiffen the lateral walls. And I think that as a progress in time, and we need to see the data. And to this point, you haven't seen any data and the ability to treat complete concentric collapse. And I think even when you do see data, the first thing you look for is BMI, and the PREDICTOR study has already shown the patients that have a BMI less than 32. Very few of them really have significant lateral wall collapse and leading to complete concentric collapse. What we're talking about with complete concentric collapse is high BMI patients that have significant lateral wall collapse, and these are patients that have apneic events, not hypotonic events, real true apneic events and we know LivaNova screened out patients that had high apnea index, meaning they're not treating the severe patients at the beginning. So they're really not treating complete concentric collapse anyways. So I think our dual channel device is one that's going to really go after the high BMI. Today, we're relying on GLP-1s to help those patients lose weight, and relax the lateral walls. But I don't think any of the players are really going to have much success treating complete concentric collapse in a high BMI patient, and a low BMI patients, those patients don't really have complete concentric collapse anyways. And that's what we show on the PREDICTOR study.

Tim, one more on competition. So I think Nyxoah expects to use the same CPT code as Inspire V, but the -- if you look at the description, it calls for an implantable pulse generator. It's not clear if they truly are implanting a pulse generator. Do you have an opinion as to whether they're going to have success using that code and how that -- I'm interested to know how that might impact the ramp or the adoption, which obviously impacts you.

I think, Larry, this is above you and I's pay grade. And this is all determined by certified coders. These are people that go to training, they take their test, they're qualified and certified to look at procedures and to determine the proper CPT code, and if a proper procedure is applicable. And the certified coders looked at Inspire and that's why we're using 64568 versus our previous 64582 because we don't have the pressure sensing lead anymore and with the implantable neurostimulator, I don't want to opine on that, but we'll leave it to the certified coders to determine if an external source is the same as an implanted pulse generator. So I think the jury is way out on that one. And until they really get approval first and then get some publications out there to show payers that covering their devices warranted that the next step after that will even be the coding. So I think we're quite some period in a way before you'll hear more on that.

Is that something that will take like 6 to 12 months before we and physicians learn -- like how long does it take before the market understands that the payers are going to accept that code?

Well, payers are going to make sure that you got to have peer-reviewed publications to show that your data is safe and efficacious before they're even going to look at it. And getting an FDA approval is not evidence that you're safe and effective. It is -- the FDA does a great job at looking at the study seeing if you hit your endpoints. And if they give approval, that's an endorsement that they can proceed on to the reimbursement phase, but then it's a whole new world. And Larry, you've been with us for a long time. You remember, it took 5 years for us to have sufficient evidence, large studies, 5-year data to be able to get proper coverage. And it's going to -- that just takes some time.

Tim, 2 minutes left. Of course, I have to give you the last word. We covered a lot of ground, but I'd love to hear from you again, maybe at a high level, key messages, anything you wanted to cover that we didn't have time to cover and thank you for your time.

Thank you, Larry, for again hosting us on these R&D spotlight calls, and it's so fun being an engineering background myself to really kind of highlight the focus that we put on the R&D efforts and specifically around patient outcomes. And every employee here knows patient outcomes is everything. That's the one slippery slope, you never go down with the payers to take care of patients. And we gain patient confident, we gain our physician confidence that they know when they prescribe Inspire that the team Inspire is going to be behind our device, we're going to do everything we can to make sure every patient has the best possible outcome, and we're committed to that. Thanks for all the coverage that you do. You bring to light a lot of the concerns that investors have over the environmental factors such as the GLP-1s. We didn't touch on some of the other drugs in investigation, and we know the history of that's showing that they're set up to be able to treat more of a mild population, but it builds awareness to it. The technology is building the awareness around it and we also understand the concerns that when you do a new product launch, there's always a challenge on the patient flow by going from the Inspire IV technology into our Inspire V and the concerns around coding. And so you're able to, Larry, with your work to show the concerns that the investors have and -- and we at Inspire remain committed to our patients, remain committed to our customers and of course, remain committed to our shareholders to work as hard as we can every day to deliver what we promise, and make sure that we deliver the strong patient outcomes that we believe will, in turn, continue to lead to our increased and continued growth of Inspire. And now we can do it in a profitable manner as we did last year and as we kind of lean into this year. So thanks, everybody, for attending and hearing the story and for your confidence in Inspire and ongoing support of Inspire.

Perfect. Well, Tim, Rick, Ezgi. Thanks so much, everybody on the line. Thanks for listening. Hope everybody has a great weekend.

Thank you. All right, Larry, very good. Take Care. Thanks much.