Inspire Medical Systems (NYSE: INSP) reported third-quarter revenue that missed the Wall Street analysts consensus.
However, the Minneapolis-based implantable sleep therapy device company also upped its full-year guidance.
Investors appeared to focus on the downside after Inspire’s Q3 earnings report yesterday evening. By midday trading today, INSP shares were down more than 16% to $134.90 apiece. MassDevice‘s MedTech 100 Index was down slightly.
Inspire Medical Systems lost $8.5 million, or 29¢ per share, off of $153.3 million in revenue for the three months ended Sept. 30, 2023. Revenue was up 39% compared with Q3 2022. In addition, the company halved its losses compared to the same quarter last year.
Wall Street analysts had expected a loss of 58¢ per share and $154.45 million in revenue.
“Our growth continues to be driven primarily by higher utilization at existing sites and was complemented by the addition of 62 new implanting centers and 13 new U.S. sales territories,” Inspire Medical Systems CEO Tim Herbert said in a news release.
“During the quarter, we achieved several important milestones, including surpassing 50,000 patients implanted with Inspire therapy, and we also made significant progress with market access by expanding coverage policies with several large national health plans to include our recently expanded indications.”
Assisting patients in gaining prior authorization for Inspire therapy from their health insurers has been an essential part of Inspire Medical’s strategy for years. In the Q3 earnings release released today, Herbert suggested that a company pilot program involving prior authorizations may have created challenges.
Here’s how Herbert explained it:
“Early in the year, we implemented a pilot program regarding prior authorization submissions by our customers, and in tracking the results of the program, we observed a decline in prior authorization submissions for patients seeking Inspire therapy. After recognizing this trend, we reinvigorated our efforts to facilitate patient access to Inspire therapy by more closely engaging with our customers with the prior authorization submission process, including involving our corporate prior authorization team to assure consistency and accuracy of submissions. These challenges had a short-term impact on the number of implant procedures early in the third quarter, but the increase in patient prior authorizations at the end of the quarter reinforces our confidence in the fourth quarter and beyond.”
As a result, Inspire Medical Systems is increasing its full-year revenue to $608 to $612 million, up from $600 to $610 million — representing a 49% to 50% increase compared to 2022.
This article originally ran on Nov. 7, 2023. Updated Nov. 8 with next-day stock price.