All right, we're gonna get started. Thanks everyone. I'm Robbie Marcus, the med tech analyst at JPMorgan. I'm very happy to have Inspire for our next session. I'm gonna turn it over to CEO Tim Herbert for some presentation, and then we'll break after and do some Q&A. Thanks.
Sounds great. Thank you very much, and good morning. So great to be here, and welcome everybody, another rainy day for JPMorgan. Let everybody kinda still kinda pile in here. Fantastic. Okay, I got 20 minutes to go through a bunch of slides and, okay, there's the disclaimer. Everybody read that quick. All right. Let's just back up. We realized that when we're doing these, we never really tell the core story. We always kinda jump into the status where we're at today. We treat obstructive sleep apnea, and we treat moderate to severe obstructive sleep apnea. You can see over in the corner right there. Wait a minute, I can get a laser pointer. You can see the definitions are pretty clear. Normal AHI, less than 5; mild, 5 to 15; moderate, 15 to 30; and severe, greater than 30.
Most people are really unaware of their condition unless you're, well, your wife tells you know, "You snore, you got that sleep apnea." They'll see an ad, and they'll create an awareness. Just look at all the symptoms, right? From headaches, depression, to tough time performing at work, to just your daily living. If it's left untreated, it's very serious, and that's where we have to address sleep apnea. That's why you see a significant amount of people being diagnosed, be given CPAP. The CPAP, as we know, is difficult to use. Therefore, we need alternative treatments, and that's why Inspire has made such a strong impact. Look at that, 2 times the risk of stroke. This is for moderate to severe sleep apnea left untreated. 2 times the risk of sudden cardiac death.
57% increased risk for reoccurrence of atrial fib. That's really significant. You look at the survival curves, and you just see that 15 years follow-up. This is a group in Wisconsin, which I know is not like normal population being from Minnesota, right? The survival curve really drops for those left untreated. Current treatment, everybody knows about CPAP. Everybody knows somebody who has a mask that they wear at night. People can benefit significantly from CPAP. It's a very effective, very cost-efficient therapy. Fact of the matter is, compliance is somewhere between 35% and 65%, depending upon which publication you pull. That just creates a huge void or huge opportunity for a new therapy. You can see that there's how many different masks.
CPAP's been around for 40-plus years, and they've gone from just a reverse vacuum cleaner to now heated air, humidified air, variable pressure air, everything to make CPAP a little bit better compliance. The fact of the matter is, you still have an apparatus that you have to put on your face, and it's gonna blow high pressure in your air. You can see the reasons over on the right-hand side there on why people just are not tolerant to use of CPAP. If you look at the current surgical alternatives, not very promising there either. I know down at Stanford, they specialized in the maxillomandibular advancement, where they basically break your jaw, move your lower jaw forward about 10 millimeters, 'cause you gotta create volume.
Gotta create a gap between the back of your tongue and the back of your airway to prevent it from obstructing. Well, very few of those procedures are done annually, maybe, you know, 1,500. The most common procedure is a uvulopalatopharyngoplasty. You don't need to pronounce that, UPPP. It's where they look, and they try to excise any tissue that could obstruct, so it wouldn't obstruct. The result's about a 50% performance, and it hurts. It exposes all that mucosal tissue in your airway, and they say it's for 3 months, it's the worst sore throat you ever had. It's kind of easy for us to be able to move in against that. Let's introduce Inspire. Inspire is using neural stimulation. We work the same way CPAP does, right?
The whole point is you have to prevent the tongue from collapsing in the back of the airway to cause an obstruction. What do we do? We sense. Over here on the right, we sense when a patient's breathing. This is exhale, and here the patient inhales. All we're doing is we have a sensor that senses this curve right here. We can see this is the start of inspiration, Inspire, right? We turn on stimulation during the inspiratory phase of sleep or during the respiratory pattern. All we're doing is stimulating the hypoglossal nerve that slightly moves the back of the tongue forward, and it just prevents the airway from collapsing. We don't detect an apnea and then stim to react to it. We prevent it.
We try to stim on every single breath to make sure the airway stays open, therefore, there are no obstructive events. Patient has this little remote that they use when they go to bed. They just kinda hold it over the device. It communicates through the skin. They push a button, it turns it on. Instead, it has a beep that tells them they turned it on correctly, but also what it does, it'll send one pulse. When you turn it on, boom, you'll feel your tongue move, right? You get a positive reinforcement that you turned on the device correctly. We have a sensing lead that senses respiration. We have a neurostimulator that includes the electronics and the battery and the algorithm. Then we have a stimulation lead that goes up to the hypoglossal nerve.
All told, 69 minutes, outpatient procedure. We let the patient go home. They heal for 30 days, and then they come back, and they start to be trained on how to use the therapy all night every night, right? We continue to advance. We started the company in 2007. We got FDA approval in 2014. Took about 5 years to work through our reimbursement program that we now have completed. Here we are now into 2022, and we're doing significant investments in our R&D. Just in 2022, we had 3 significant launches. We did the whole SleepSync patient management system. Everything we do is based on maintaining strong patient outcomes. There's nothing can slow us down except for that.
If we honor the patient and continue to make sure that patients all have the best possible outcome with Inspire, we're in pretty good position. The challenge is we have to be able to measure them and monitor them. How do you do that? We build a system that we can communicate with patients. We can monitor them. That little blue This little remote control that came out this year has Bluetooth in it. It communicates with the patient's smartphone. The smartphone goes to Inspire Cloud, which is part of the SleepSync system, right? All the information from the implanted product, all the information from the remote is sent directly to SleepSync and the physicians can monitor how their patients are doing.
The physician programmer is currently in review at the FDA. When we release that one, the new physician programmer will communicate directly with the cloud. Now we have two key aspects to it. I'll talk the next slide on how we interface in with the sleep studies. We introduced silicone leads just in the third quarter and ramped that up in the fourth quarter. That's just easier to manufacture, easier to implant, a little bit better long-term performance. Most importantly, we made that sensing lead a lot shorter. It makes it really easier for the physician to implant. We did announce full body MRI this year. That is retroactive to anybody who's had an implant since about 2018.
It really gives the patients a real peace of mind. Here you can kind of see the world of where we're going with SleepSync. We're going to be able to tie in sleep diagnostics. If somebody has an overnight or a home sleep study, if somebody has, you know, some of those. Even some of those Oura Rings, we'll start to try and work with them or different kind of diagnosis to be able to input that data into the system so the sleep physicians and the ENTs can really see how well the patients are doing. That's really kind of key so we can track, and then we can set up alerts. If somebody hasn't used their device in 3 nights, boom, the doctor's going to get a notice, "Call that patient. They're not using the device.
Something might be wrong." That's just we can put guard beds in there. Here's the trick to this whole thing. We as a company, we get to see every patient globally, we get to see which centers are performing really well, which centers are not performing as well. We can learn from some centers, and then we have teachable moments with other centers to kinda say, "Hey, you gotta change things up." I highlight down here the Inspire IV, Inspire V is in the works right now. We'll talk about that a little bit later. That's our new neural stimulator that's coming out. We're gonna be submitting to the FDA soon. That will take that sensing lead and eliminate it 'cause we are now putting the sensing inside the can on the circuit board.
It's one less product that the surgeon has to implant. Here's part of this whole data collection thing, right? We continuously monitor every patient, right? We have a ADHERE registry. It's set up for 5,000 patients. Right now we're well over 4,000. We'll probably get to about 5,000 this year. That's when we're gonna stop this study, and we're gonna roll it into ADHERE 2.0. ADHERE 2.0, naturally, is gonna be part of SleepSync. What we can do is you can see the number of centers, 62 centers in the U.S. participate in this study, 11 in Europe, and we're able to really collect that data and just do longitudinal follow-up with those patients and really see how well they're doing. Now, this data isn't from the ADHERE registry. This data is all patients.
We track every single revision, every single explant that happens with our system. Now, this is part of our quality system. This quality report is on our website. We publish it every year. This is new data that just came out a couple months ago. This is how we do continuous improvement. Look at the revision rates. Okay, now notice the scale. Second 94% was back in 2018. 6% of patients experienced a revision. Look where we are today. We're up over 99%, right? Just 1% of patients actually experience a revision. That's what this is all about. Here's the next key. The majority of these revisions that you see right here are caused by that pressure sensing lead.
We go to Inspire V, we get rid of that sensing lead, we get another step up in reliability, which is positive for the experience for the patient. On the other side, this is survivability. This is patients that have an explant. You can see down in 18. This scale is different too. You're already talking 96.5%. The majority of these explants were tied to MRI. Now that we have full body MRI, that allowed an immediate step up. You can see, you're talking half a % explant rate in 21 and so far in 22, that's even better yet. We track that very, very closely and very excited about that. AHI is the objective measure, apnea-hypopnea index, the number of events per hour. Remember, everything 15 to 30 is moderate, 30 and above is severe.
Our population starts right at 33. These are the patients in that ADHERE registry, you can see that we can take them down to 33 and get them down to 10. That's the goal of this whole thing, that's really impressive. ESS is Epworth Sleepiness Scale. This is the quality-of-life scores, right? You can see it going from an 11 down to 6. It's tremendous. A 2-point step is really what's important. This is a very consistent data. Average use about 5, 6 hours a night for these patients. Here's the key. This is how we knew we hit a home run, this is how we keep working for the patients. Overall satisfaction, how are you with Inspire? 90%. 90% of the people that had Inspire said they'd do it all over again. That's significant, right?
That's what we're all about. All right, we made the announcement this morning. We've been growing very, very strong, we did have a very good fourth quarter. You can see we expect our final numbers to come in between $137.5 and $137.9, when Rick gets done with all the financial work and closes the books. Pretty confident with that. A significant step-up driven predominantly by increased utilization. We also increased a significant number of new centers. What that means for the whole year, we went over $400 million for the year. Very proud of that. $407.5-$407.9. 75% growth rate over 2022. It's not a new product. We've been around since 2014.
Real proud of how the team's working. Randy's in the back. He's our chief commercial officer and runs the entire world sales force and doing just a great job at building the awareness and continuing to grow the utilization and the confidence of the physicians to be able to enroll a greater number of patients. Gross margins, we are not changing that yet because Rick's still working on the books, but our guidance was 83%-85%. We're not gonna talk about guidance yet because we're still setting up the year. We do have our earnings call coming 1st week of February, where we will lay out all that activity. We will talk about new center adds, because that's important. We did open up 61 new centers in the quarter. That puts us at the end of the year at 905.
Just a steady step up. We also Randy added 16 new sales territories in the United States. That gets us up to a total of 225 right now. The whole process is just a continual step up, continual scaling of our organization. We don't do any bonus hires. We've been very consistent. If you kind of look at the centers, very consistently. Now, there are some break points in here. We have increased the size of our training team to be able to open up an additional, you know, centers to be able to address the demand that we have. We've been very consistent. We don't get out over our skis, the reason we don't do that, because we need to protect patient outcomes. Very steady growth, very consistent growth, very significant growth as well.
The whole time, we're actually improving on patient outcomes. As I just showed you, we're improving on the reliability by reducing the number of any patients requiring any kind of explant or a revision. Very scripted algorithm that we have, just a very steady cadence. Here's how we did it. We have this direct to consumer. Sleep apnea just lends itself so well to reaching out to patients and educating patients, right? We people, if you have sleep apnea, they're not embarrassed by it, right? They'll talk about it. You'll sit around the campfire and say, "Yeah, I got that sleep apnea. I got one of those CPAP things. Hate it, but man, if I don't use it, I feel like crap in the morning." People talk about sleep.
Randy and I, we did an experiment back in 2012 when we did a clinical study. We did one radio ad in Dallas for this clinical study, and the phone just rang off the hook. People wanting to react to the ad and say, "I gotta learn more about this." As time went on, we continued to evolve our process and we'd do, you know, radio ads, we would do all the Facebooks, Google, Facebook, Twitter, you name it. All the time just building the brand, building the awareness of Inspire. Well, now we've taken the next step, and we've gone to TV. We started doing local TV ads, and then started looking around saying, "You know what?
We're getting to the point now where we have centers in all 50 states. By the way, that happened last year. Rhode Island was the last state, right? Alaska and Hawaii beat Rhode Island. We have centers in all 50 states, so now it's time for us to do national television. That's what we introduced this year. What's always the highlight of the JPMorgan conference is we always preview a couple of our new TV commercials. We are gonna do that here in the next next step, and it's pretty cool. Look at the number of website hits. From 2018, when we're talking 2.3 million to over 13 million people came to our website last year to learn about what Inspire is.
Our brand awareness score took a huge step up in the year. As people are becoming more and more aware of what Inspire is, they can define what Inspire is. It's not just patients, it's sleep physicians, and now more importantly, it's general practitioners. 'Cause a lot of patients will see an ad, they'll go to our website, they'll get educated, and they'll say, "I gotta see what my doctor thinks of this." They'll go to their doctor, and the doctor says, "What's an Inspire?" Right? Now you're seeing all the general practitioners becoming more and more educated, and that's gonna really be a focus as we start going forward next year, is really start building the brand and the awareness. Right? All right. I got two minutes and 50 seconds to show a couple commercials. All right?
The key with these commercials, and this is probably our third wave or fourth wave of commercials. Rick's sitting right here, Rick, our CFO, he hasn't seen them. He's sitting there intently. These are the very, very early stage. These... what you see here will not be shown on TV. Love your feedback on it. My wife signs off all of them before they go to print or go to air, and she hasn't signed these off yet. She's seen them. One of them, she says I wasn't supposed to show, but I'm gonna show it to get your reaction anyways. Everything, the key theme that we wanna show when we do our TV commercials, we always wanna show somebody moving aside CPAP, moving away from CPAP.
I tried CPAP, I can't benefit from it. You'll always see somewhere in a commercial moving away CPAP. You'll also see the ease of Inspire with just a click of the button. You're always gonna see somebody turning the device on with just pushing the button right there. We play off it from there. Let's just go for it and see what happens. Get the mouse out of the way. Here we go.
I struggled with CPAP every night. Now that I get the-
Can you turn that up a little bit? Just crank itGood?
Yeah.
I struggled with CPAP every night. Now that I get the Inspire implant to treat my sleep apnea, I'm sleeping much better. In fact, it's making me think of doing other things I've been putting off.
Oh, like removing the tattoo of your first wife's name.
Your mom's name is Vicky, too.
That's even worse.
Inspire sleep apnea innovation. Learn more and view important safety information at inspiresleep.com.
Dana's on my board, so I always look at Dana's reaction too. First time he sees those, right? I mean, again, it's somebody that's not able to benefit from CPAP and has Inspire, trying to feel good about themselves and do things that they hadn't previously done, and including removing the old tattoo of your ex-wife. This is the neighbor, right? I won't even describe it. I'm just gonna kinda run it. Here we go.
Wait, wait.
That neighbor is hot.
That's my husband.
What?
It's the Inspire implant he got. He's not struggling with CPAP anymore.
All that rest is working wonders for him.
For me. Gotta go.
Naughty girl.
Hi, sweetie. Here comes the treat-treat trade of love. Inspire sleep apnea innovation. Learn more and view important safety information at inspiresleep.com.
I'm gonna get a phone call after this one. That's the, that's the one my wife isn't too excited about. She thinks we need to kind of rework that commercial a little bit, but it's still kind of fun. Before I go on to the next one, and we're gonna run out of time, I'm getting into Robbie's time. Couple catalysts coming up. We got a big year happening, and we're very, very excited about it. We do have a pediatric Down syndrome indication. We've been talking about treating our pediatric population for a long time. it's such an important group of patients for us, especially those with Down syndrome. There's just no way these kids can use CPAP. We finally agreed the right thing to do is get an indication just for the kids with Down syndrome. That has been in with the FDA.
FDA has been asking us questions on that. We expect that approval to come in the first half of the year. Very, very excited about that. We do have two other indication expansions with apnea-hypopnea index is the primary indication expansion. BMI is a little bit less, because we still have to deal with lateral wall collapse. We will get our first reimbursement cases in France, Belgium, and Hong Kong. How's that? Took us a long time to negotiate with France and Belgium, but it's really good to see those territories come through. Hong Kong already has their first cases scheduled in a month or so. Below the line there, you can see the PREDICTOR data is a clinical study we're using to eliminate the necessity to do sleep endoscopy or DISE.
We have enrolled a 300 patient study, and we're looking at the preliminary results. We really like them, and so those will roll out pretty quickly. The original study, conducted by Jordan Weiner in Arizona just published last Friday. Get a hold of myself, Ezgi, or Rick if you want to figure out how to get a copy of that publication. That really is the precedence to be able to use this predictor to move forward. We have the connected physician program that I talked about. That is in review with the FDA currently too. Inspire V is the big story, and we're in qualification testing right now.
We're gonna be once we get the units, the design is frozen, and we'll be submitting that to the FDA with the intention to launch that in 2024. The other key thing that most people are aware of, we just highlighted up on the top of the line. When we get to about 2025. Remember, our devices have about 11-year battery life. We got approval in 2014. As we start moving into 2024, 2025, all those patients are gonna be coming back for their replacement devices. That's gonna be another significant effort, and that's something that Randy has to plan for as we build utilization, is to make sure we have appropriate time to take care of patients for their replacement devices.
I could give Robbie 17 minutes, or I could show the last commercial. What do you wanna do?
Commercial.
They all say the commercial. This is called CPAP Retirement. All right? Well, let's just run it.
A toast to Bob and his new Inspire implant. We're so glad you don't struggle with CPAP anymore.
Trust me, I am too.
I sure woke up hearing your snoring next door.
I'm showing up tired and late every day.
Hey, Bobby, I'm out of your office.
I still work here, Cheryl.
We have cake.
Cake? Cake. Cake. All right. Let's go.
Inspire sleep apnea innovation. Learn more and view important safety information at inspiresleep.com.
There you go. All right.
Let's do some questions.
We have Rick come on up here, too.
Good. Maybe we could start with the news that came out this morning, the fourth quarter announcement. You guys beat the street by about $20 million, another quarter and year of strong growth. Maybe you could just start out some of the trends you saw in the first quarter or fourth quarter with respect to Inspire. How much of it was growth from new accounts, growth from same stores? Then we can take it from there.
Absolutely. I think the good news is with that, we also announced we opened up 61 new centers. That gets us kind of back on that track, right, compared to where we were in the third quarter. A little bit of a step up from that standpoint. When we talked in the third quarter, we saw the pendulum really swing that utilization or same-store sales is really kind of driving the growth. Opening up 61 centers is a significant part of the revenue that we had during the quarter, but I still think it's still predominantly driven by same-store sales. It's really Randy and his team. It's instilling the confidence in the physicians to be able to prescribe the therapy and make sure that they can commit more of their practice to Inspire therapy.
I think the key is, you had a note today that highlighted that the reimbursement of a couple years ago takes time to take hold. The new CPT code, consistency of how much they're gonna get paid and that they will in fact be paid. Now physicians see that and they know that they can commit more of their practice because they can count on, they can do their own budget planning. That way we can work with them, say, "Hey, we gotta commit more OR time." You saw 13 million people come to our website. We don't have a shortage of demand, a shortage of patients that want Inspire therapy. We still lack appropriate amount of capacity in the operating room to do the procedure, and that's what our continued focus is.
Are you seeing an actual patient backlog where there's a number, you know, whether it's a month, 2 months, a quarter or so of patients that are just waiting to get appointments? Or is it more just you need to diligently build out more manpower to go out there and open accounts?
No, the demand is strong and it's present. When we talk about our Inspire Advisor Care Program, our call center, if you will, where patients go to the website, they educate themselves, they call the call center, and the call center's asked to get the patients an appointment. We find with some of the centers, they're so booked up, their appointments are so far out, 2 months out. Patients don't want that. Patients are active right now. They want an appointment right now. We need to work with the physicians to say, "Hey, we've got to get appointments earlier. We've got to get improved flow." A lot of times what we'll do, if there's a center that is overwhelmed with patients, we just have to temporarily take them off the website. It's not mean. It's saying, "Look, you're full.
You've got all the patients that you can take care of. We need patients to be able to go to an area where another physician can take care of them. As we work down the backlog, then we'll put you back on the website, and we'll fill up your appointment books again. Let me take the opportunity to highlight one other thing in there. We do have a pilot program that we're testing on. The biggest challenge we have is when a patient calls in to the Advisor Care Program. The Advisor Care Program says, "You know, I think you're a pretty good candidate, but we got to get you an appointment with a doctor to be evaluated." Together, they make a conference call into a doctor's office, and nobody answers the phone. Press one, press two.
What a buzz kill that is for the patient, right? Now we're piloting having direct access to their electronic scheduling system. If it's a potentially a really good patient, the Inspire Advisor Care Program can just slot them in on an available appointment on the website. That's pretty exciting. You know, it's pretty early stage on that, but you're gonna continue to hear more and more, and that's all about improving flow and helping patients through the process.
I wanna ask one more question, then I'll open it up to the room here. Rick, you know, really impressive top line growth. We've also seen expenses come up along with that over the years. You know, I know you're working on fourth quarter expenses, you know, I'm really looking more for 2023 as you think about expense growth. Is this a year we can start to see more improvement where you get more leverage with lower expense growth versus higher sales growth?
For the first nine months of the year, we have shown improvement on our leverage. Our revenue growth for the first nine months was around 74%, and our OpEx growth was about 60%. We have created leverage. In the third quarter, our net loss was $16.8 million, and stock-based compensation was about $14.8 million. You back that out, we actually generated cash in the third quarter, so profitability is getting closer and closer. We expect to continue to really focus on the top-line revenue. We don't have any competition for the next several years, in our opinion.
We're gonna continue to focus on that because we're in 900 centers. We're still in the early innings of our rollout, and we're gonna continue to have that methodical expansion of our capacity by adding centers and territory managers. We'll continue to focus on really on driving the top line.
We'll open it up to questions.
Tim, great job. Great presentation.
Thanks, Pat.
Two questions. Is there any variability, between surgeons in terms of the procedure once they're trained, or does everybody get it? Are all, you know, 1,000 or 2,000 doctors in the U.S. competent at the procedure? The second question is, silicone being used in medical devices, sometimes it's been controversial. Are you looking at other, polymer silicone coexist, whatever, for the cuff that goes around the nerve?
Randy's got a training group. When you start out, you get trained to do a procedure. We send the physicians who we treat like patients. We send the physicians outside, and it's a full day training. It's 4-hour didactic and then 4 hours hands-on cadaver, then we go back, and we send one of our top people in to make sure we monitor their first several procedures, then they actually get certified. It's pretty strict how we do our training. There's only one way to do the procedure, and it's our way. When you do the first 3 procedures, you're gonna do it by the book and make sure everybody's very consistent.
There's publications that show that Surgeons become accommodated to the procedure after their third procedure, and certainly by their fifth. We're very, very strict on training. Now, once they get to a certain level, and then after they've done 100 implants, now we turn the tables. We say, "Okay, you've done 100. How do you, what can we do to make this better?" All right. We talked earlier that we have a group of our ENT advisors coming in as of next week or week after, and they sit down and we says, "Okay, you know the procedure. Everybody in this group has got a cumulation of thousands of implants. How do we make this better?" That's how we, when you start out, it's strict. You do it the way it is. We're...
Okay, go to biomaterials on the other side. We were using polyurethane, we moved from polyurethane to silicone. We think we like the performance of it a little bit better. We have all of our experts, and we're all the old Medtronic, Boston, Guidant, so well aware of all the material options available. That's why we've gone to silicone right now. We really like what that provides as far as manufacturability and long-term performance.
Thank you.
You bet.
It is great idea to remove the pressure sensor into the IPG, as you mentioned.
Yes.
How much time can be reduced for the implant procedure?
Um-
And also-
Okay.
Do you still use the pressure sensor as your sensor or other sensors?
Very good question. Let's go backwards. What we're using today is it's a differential pressure sensor. When you breathe, it's really a gross signal. It's very easy for us to sense that, pick that up, and build the algorithm around that, right? As we go to Inspire V, we're putting it inside the device on a circuit card. Now we're changing. We're going with an accelerometer. Accelerometers are used in cardiac pacing for years, right? For rate responsive pacing. If you go jogging, your pacemaker pumps faster, right? We're gonna switch over to an accelerometer. We believe it's gonna improve our signal on the clinical data that we've shown because it's more of a stable environment, and that's what's been qualified with clinical data, and that's what we're gonna be submitting to the FDA.
How much time does it save?
Oh, I'm sorry. That was your first question. It depends. If you're at 60 minutes, it can maybe take off 15, getting you down to a 45-minute. If you're at 90 minutes, it might take out 30 minutes. We think the procedure will go down to somewhere around 45-60 minutes instead of 60-90. Go ahead.
I have another question. Since you mentioned pacemaker, the pacemaker will only have the PSA during the implant to get the pacing ratio.
Uh-huh.
It looks like your pacing don't need that, right?
We do full intraoperative testing, right? When the patient's in there under sedation, what we wanna make sure of, we get the electrodes in the right spot on the nerve. During the operating procedure, we turn the device on, we stimulate the cuff, the electrodes, and we make sure that we can see a forward movement of the tongue. We use a clear drape to be able to visualize that. We also, on the programmer, we can visualize the respiratory patterns. Anesthesia will squeeze the bag to give us a real good pulse, and we can visualize that. We know the system's operational before we close, just like in pacing.
Yeah. Do you use the IPG still to do the pacing?
We do.
You don't use the tissue nerve?
Okay. There's something called the nerve integrity monitor that gives us the temporary stimulation. We actually can use a probe, and we touch different parts of the nerve. That's the first step, so we know where to put the electrodes. We put the electrodes there and use the neural simulator to confirm it. We do that same step.
Maybe if we're looking out 2024, 2025, you'll have Inspire V.
Mm-hmm.
2025, you're gonna start to have some of the initial battery replacements-
Mm-hmm.
coming through, potentially some competition coming to market. You know, leave that aside for a second. If we just think about Inspire V and replacements, I imagine you're gonna continue to grow territories. How do you think about capacity in the system? It's already an area that's, a little bit of a bottleneck in the system today. What is Inspire doing today to be able to prepare for more volumes in the future to accommodate them?
Well, we're developing a market, right? When we're working with physicians, it's not like we're a company coming into an existing space and spinal cord for pain or wherever you wanna go, that we're just fighting for market share. We need our doctors to do something, you know, else. We need them to do Inspire procedures. It is a market development to have them find more capacity in their office. I know A lot of our doctors are oncologists. They have to deal with cancer. Cancer's not going away. We need to kind of build up the confidence that they can do that. As we've shown over the last several quarters, that works.
One of them is make sure that economically it's feasible, they have confidence in the therapy that it will take care of their patients, and they can commit more time. When we get to Inspire V, we continually reduce the amount of time it takes them to do a procedure. When we get to device replacements, those are relatively easy for these docs. They're gonna be really quick, and they can schedule multiple in a day just to kind of work through that. I don't think that's gonna be a real burden on the system. For the physicians, they get reimbursed really well for that. It's really gonna be a good boost for their economics. It's gonna be a boost for the ambulatory surgical centers and the hospitals. We'll just continue to keep moving forward with that.
Along those lines, the ASCs, the ambulatory surgical centers Really helped you during COVID be able to offload procedure volumes. How should we think about ASCs and their role they'll play in future Inspire procedure growth now?
I think it'll continue to grow. Hospitals get reimbursed really well for Inspire. We're able to get good priorities and get good OR time, hence we're not subjected to a lot of the staffing issues that you'll hear because. Well, two things. One, we schedule our cases out quite a way in the future. Number two, we get priority because it is a beneficial therapy for the hospital. That being said, when surgeons don't have access at a hospital, they're able to go to their ambulatory surgical centers as a backfill to be able to get additional capacity. We're working with the reimbursement there. They will have to do individual contracts with UnitedHealthcare, Anthem, or Aetna for Inspire cases.
Most of them have them in place to be able to leverage that, but that's an ongoing challenge with the big companies like USPI or SCA to make sure that they have the global contracts in place. We can start leveraging that more and continue to keep growing the number of cases at ASCs in the future.
Maybe, one last question from me. You know, international right now is a small percentage of your sales. Obviously, a lot of IPO or new companies start in the US and build internationally over time as you gain more cash flow. Is there any reason this couldn't be something like a traditional med tech split, 50/50, 60/40 US, outside the US? How long would it take in your head to get there?
We're talking years in the future, and just the notion of what we can do in the United States with the building the brand and the awareness and the direct to consumer, we're restricted a little bit on what we could do internationally on that and how much you can invest in that today. Really the focus today is continue to grow the US, and that's putting up the numbers that we want, and we're gonna continue to focus on that. International is having a big impact, right? We had growth in the fourth quarter. Germany is active now. We got countrywide reimbursement in France. Belgium's about to announce. We're doing implants in the UK. Europe is really starting to step up a little bit. Japan is really strong.
Now we have multiple centers in Japan, and that's starting to grow. Singapore is doing well. Opening up Hong Kong, but we're also continuing to look there. Right now, we're low single-digit % of our revenue is international. Our immediate look is how do we somehow get that growing to a point it gets up to higher single digits? If you're looking at a 50/50 split, that's quite some time in the future, 'cause we're gonna continue to focus on growing the U.S., and you can see we're barely tapping into the demand that we have from the patients.
Yeah. Well, great. We're out of time, but thanks a lot. Appreciate you coming.
Thank y`ou very much for having me. Very good. Thanks, all.
Thanks, everyone.