Inogen, Inc Overview May 2021 - cloudfront.net
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Inogen, Inc Overview May 2021
Notice Regarding Forward-Looking Statements
These slides and the accompanying oral presentation (the “Presentation”) include forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, which are based on current expectations, estimates and projections based on information currently available to
management. These forward-looking statements include, among others, statements relating to our business strategy; our expectations regarding
changing reimbursement rates on both our rental revenue and the oxygen therapy market generally; the size and estimates of growth in the oxygen
therapy market; our estimates concerning market penetration; our expectation regarding market headwinds and the impact on HME providers; our
expectations regarding the impact of the COVID-19 pandemic on our business and demand for our products; our hiring expectations; product
development; expectations related to the Company’s rental strategy and growth prospects; and our expectations related to our acquisition of New Aera
and the Tidal Assist® Ventilator technology. All statements other than statements of historical facts contained in this Presentation, including statements
regarding our future results of operations and financial position, business strategy, prospective products, plans and objectives of management for future
operations, and future results of current and anticipated products are forward-looking statements. Forward-looking statements are typically identified by
words like “believe,” “anticipate,” “could,” “should,” “estimate,” “expect,” “intend,” “plan,” “project,” “will,” “forecast,” “budget,” “pro forma,” and similar
terms. Forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from currently
anticipated results, including but not limited to, risks arising from the possibility that we will not realize anticipated revenue; the impact of reduced
reimbursement rates; the possible loss of key employees, customers, or suppliers; and intellectual property risks if we are unable to secure and maintain
patent or other intellectual property protection for the intellectual property used in our products. In addition, our business is subject to numerous
additional risks and uncertainties, including, among others, risks relating to market acceptance of our products; our ability to successfully launch new
products and applications; competition; our sales, marketing and distribution capabilities; our planned sales, marketing, and research and development
activities; interruptions or delays in the supply of components or materials for, or manufacturing of, our products; seasonal variations; unanticipated
increases in costs or expenses; and risks associated with international operations. The known risks and uncertainties are described in detail under the
caption “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2020. Additional information will also be set
forth in our Quarterly Report on Form 10-Q for the period ended March 31, 2021 and our subsequent reports filed with the Securities and Exchange
Commission, or SEC. Accordingly, our actual results may materially differ from our current expectations, estimates and projections. Unless otherwise
specified herein, forward-looking statements represent our management’s beliefs and assumptions only as of our May 4, 2021 earnings release, and we
undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as
required by applicable law. For more complete information about Inogen, Inc., please read our Annual Report on Form 10-K, Quarterly Reports on Form
10-Q, and other documents that we have filed and may file from time to time with the SEC. These documents can be obtained by visiting EDGAR on the
SEC Web site at www.sec.gov.
1
Inogen POC Offers Freedom and Mobility
Delivery Model Inogen Model
Portable oxygen concentrator (POC)
Stationary Oxygen
Concentrator + Regular Oxygen
Tank Delivery
Inogen One G5®
¡ 4.7 pounds (single battery)
¡ Pulse-dose, Intelligent Delivery Technology
¡ Run time up to 13 hours with a double battery
¡ A/C adaptable
¡ Conforms to all applicable FAA requirements
¡ Suitable for stationary, portable, travel & overnight use
Inogen® offers a single solution, freedom and independence
2
Traditional O2 Therapy Challenged by Market Dynamics
Traditional O2 Inogen Relevance Today
§ Increased baby boomer expectations
Enables Quality
of Life O P §
§
Greater consumer involvement in healthcare decisions
Enables travel and mobility
§ Reduces reliance on in-home deliveries
§ >50% reduction to Medicare reimbursement rates
Cost Effective
O P § Oxygen delivery has high infrastructure and variable costs
§ Clinical study shows ambulatory O2 à 2x survival; 60% fewer hospital days1
and we believe POCs enable increased mobility for patients versus tanks
Clinical
Evidence O P § Utilizers of oxygen therapy have lower deaths, hospitalizations, and days in
the hospital than those who have a health condition that would support
oxygen but do not use it2
Note 1: Retrospective Review of the 1980 Nocturnal Oxygen Therapy Trial Group led by Dr. Tom Petty published in 2000
Note 2: www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/DMEPOSCompetitiveBid/Monitoring.html 3
Product Performance Drives Leadership Position
Inogen One G5® Inogen One G4®
Launch Date April 2019 May 2016
Effectiveness
Minimum Advertised Retail Price $2,495 $2,295
O2 Capacity 1,260 ml/min 630 ml/min
Overnight ü ü
Single Solution ü ü
Design
Use Replaceable Batteries ü ü
Sieve Life Extending Technology ü ü
Weight (lbs.) 4.7 (single battery) 2.8 (single battery)
Convenience
5.7 (double battery) 3.3 (double battery)
Battery Duration Up to 13 hours on a Up to 5 hours on a
double battery double battery
Sound Level (on flow setting 2) 38 dBA 40 dBA
4
Innovation at Forefront of Customer Preference
Technology leadership delivering patient preferred features with focus on product reliability
• Optimized for the oxygen therapy user requirements and preferences
• Superior oxygen production per pound, sound suppression and run-time
• Durability, reliability and functionality to deliver a single solution POC for oxygen at home, away, and travel
Rapid innovation cycles to remain a technology leader and best meet a wide range of patient needs
Inogen One G1 Inogen One G2 Inogen One G3 Inogen At Home Inogen One G4 Inogen One G5 Inogen TAV
Launch 2004 Launch 2010 Launch 2012 Launch 2014 Launch 2016 Launch 2019 Launch 2019
〉 Small, light 〉 Smaller, lighter 〉 Smaller, lighter 〉 Only 18 lbs. 〉 Smallest, lightest 〉 Smaller, lighter 〉 Non-invasive ventilator
〉 5-settings than G1 than G2 〉 Continuous flow 5 Inogen POC than G3 〉 Discreet cannula design
〉 Travel 〉 Greater O2 / lb. 〉 Greater O2 / lb. LPM stationary 〉 Greater O2 / lb. 〉 Greater O2 / lb. 〉 5-setting / Multiple
compliant 〉 Additional setting 〉 Increased runtime 〉 Energy efficient 〉 Large user display 〉 Additional setting modes
〉 Increased runtime 〉 Replaceable sieve 〉 Replaceable sieve 〉 Bluetooth/App 〉 Increased runtime 〉 Works with certain
〉 Lifetime warranty beds beds 〉 Bluetooth/App stationary concentrators
& tanks
5
Building the Inogen Brand
Targeted Advertising Consumer Preference
Domestic Direct-to-Consumer Sales ($M) Domestic Business-to-Business Sales ($M)
$121.6
$96.4
+22.7%
5-year +22.9%
CAGR 5-year
$43.8 $34.4 CAGR
2015 2020 2015 2020
Founded in patient preference
6
U.S. Market Dynamics Favor POC Adoption by HME Providers
Estimated Penetration of POCs1 Average Gross Monthly Medicare Reimbursement Rates in Former CBAs
$250
100% $233
$200
90% $158
22% 22% $136 $134
$150 $115 $114 $113 $121
33% $109 $110 $110
80%
$100
8%
70% $50
60% $0
2012 Round 1 Round 2 R1 re- R2 re- R1 re- 2018 DME 2019 DME 2020 DME 2021 DME April '21
50% 60%
compete compete compete Adj. Adj. Adj. Adj. DME Adj.
2014 2016 2017
40%
63% 70% Market Dynamics
30%
§ POCs favored by patients, and have a premium reimbursement rate to tanks
20% CAGR:
~22% § HME restructuring challenges, capital constraints, and limited cash flow are expected to lead to
10% 18% “lumpy” order activity
5% § We believe COVID-19 has reduced new COPD patient referrals due to reduced travel and limited
0%
1 patient interactions at physician offices, however 4Q20 and 1Q21 we saw increased demand
2012 2019 Estimated Full
primarily associated with increased COVID-19 discharges
Penetration 2
§ Oxygen therapy was removed from competitive bidding round 2021, and the removal of Medicare
POCs Ambulatory Non-POCs Stationary budget neutrality requirements increased rates in former competitive bidding areas by ~10% and
all other Medicare areas by ~5% effective 4/1/2021
Note 1: Based on 2019 U.S. Medicare claims data and our estimates of the ratio of the Medicare market to the total market. Value excludes Medicare Advantage, Medicaid, cash pay and private insurance.
Note 2: Based on 2019 U.S. Medicare claims data, ambulatory patients account for 77.8% of total patients. Inogen estimates a full POC penetration rate of up to 90% of the existing ambulatory patient 7
population based on Inogen’s analysis of the patients who have contacted the Company and their clinical needs
Rental Focus to Drive Improved Results
Strategic Focus
§ Increases patient access to Inogen POC technology
§ Plan to grow referrals at the onset-of-care
§ Expect to build a national physician facing sales force and expand insurance contract coverage
over next 3 to 5 years
§ Invest in infrastructure to support physician sales force, expand clinical evidence, and offer
physicians solutions to best serve their patients
§ Expect it will help grow revenue with better predictability with an attractive margin profile
Rental Revenue ($M) Rental Patients on Service
$28.3
$21.4 25,300 32,200
+32.3% +27.3%
Growth Growth
2019 2020 2019 2020
We believe expanding rentals will increase patient access and improve margins over time
8
Globally Diversified Revenue
Sales in 59 Countries Worldwide Revenue
3 Months Ended March 31, 2021
2020 Revenue Breakdown Revenue Breakdown
DTC rentals DTC rentals
9.2% 11.3%
Domestic B2B
31.3% Domestic B2B
35.4%
DTC sales
39.4% DTC sales
35.2%
Int’l B2B
20.1% Int’l B2B
18.1%
2020 Revenue: $308.5M
1Q 2021 Revenue: $86.9M
9Historical Revenue & Strong Balance Sheet
Revenue ($M)
$400.0
$358.1 $361.9
$350.0
11 Year CAGR of 42.2%
1
$308.5
$300.0
$249.4
$250.0
$202.8
$200.0
$159.0
$150.0
$112.5
$100.0 $86.9
$75.4
$48.6
$50.0 $30.6
$23.6
$10.7
$-
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 2021
As of March 31, 2021
Cash, cash equivalents and marketable securities $233.2M
Debt $0.0M
10
1 2020 was significantly impacted by the COVID-19 pandemic.Driving Future Revenue Growth
1 n 24 physician sales representatives*
n Increase utilization of DTC leads to drive rentals
Rental Focus n Increase physician awareness of Inogen POC technology
n Expand infrastructure for sales & service support
2 n 300 inside sales reps*
Direct-to-Consumer n Focusing on sales rep productivity including close rates
Optimization n Increased utilization of leads to drive rentals
3 n 14 U.S. and 9 Int’l B2B sales & support team*
Increase Domestic & n Strong & evolving partnership with B2B providers to address underserved markets
International B2B n Distribution in 58 international countries
Adoption n Developing reg. & sales pathways in emerging markets
4
n Inogen One G5 launched in 2019
New Product Pipeline n Integration of TAV / New Aera technology into POCs underway
n Focused on disruptive products and evaluating potential acquisition targets that
offer unique respiratory solutions
*As of December 31, 2020 11Company Highlights
1 2
Market leader in large, global, DTC model enables innovation and
underpenetrated market customer access
3 4
Differentiated product portfolio with Experienced management team
continued commitment to recognized as leaders in the
innovation respiratory homecare market
5
Attractive financial profile
12Supplemental Information
High Standards of Compliance and Regulations
Accredited home care provider Billing / DTC Key regulatory approvals
§ 510(k) clearance by the FDA
§ FDA registered manufacturing
§ Accredited Home Medical § Licensed to provide directly to facilities
Equipment Provider by the patients & bill Medicare in 50 § Conforms to all applicable FAA
Accreditation Commission for states & District of Columbia requirements for use on
Health Care (ACHC) commercial aircraft
§ State by state licensure
requirements § Quality Management System
certified to comply with ISO
13485 for the design,
development, manufacture,
distribution and service of oxygen
concentrators, non-invasive
ventilators and accessories
14Estimated U.S. Medicare Penetration of POCs
We believe POCs remain under penetrated Estimated Full POC Penetration Rate¹
¡ Based on 2019 U.S. Medicare claims data,
ambulatory patients account for 77.8% of total LTOT
POC Appropriate
patients. Ambulatory
Stationary 90%
77.8%
22.2% Ambulatory
¡ Inogen estimates a full POC penetration rate to be
non-POC
90% of the existing ambulatory patient population
10%
or ~70% of the total¹
¡ Based on 2019 U.S. Medicare claims data, we Estimated Penetration of POCs¹
estimate the penetration rate for POCs was ~18%² 70%
(based on Medicare)
0.6
¡ Inogen estimates the U.S. oxygen therapy market
to reach full POC penetration in 5+ years 0.4
14% 18%
0.2 9% 11%
¡ Inogen’s POC estimated useful life is 5 years 8%
0
2015 2016 2017 2018 2019 Est. Full
Penetration
Note 1: Based on 2019 U.S. Medicare claims data, ambulatory patients account for 77.8% of total patients. Inogen estimates a full POC penetration rate of up to 90% of the existing ambulatory patient population based
on Inogen’s analysis of the patients who have contacted the Company and their clinical needs.
Note 2: 2019 U.S. Medicare claims data does not include Medicaid, cash sales, private insurance, government or Medicare Advantage patients
15Design Expertise & Intellectual Property
Trade secrets & know-how
§ Increase functionality
§ Automation
§ Connectivity § Improve design
§ Compressor design & air separation § Ease-of-use
§ Encoded software § Reduce production costs
§ Ventilation & air entrainment
60 patents issued*
§ System design and assembly § Product differentiation
§ Control systems for oxygen concentrators § Long-term protection of
and ventilators
existing portfolio
§ Nasal interface designs
§ Sieve bed designs and life prediction § Design features for patient
preference
29 pending patent applications*
§ POC design improvements § Reduced service costs
§ Ventilation interface design § Reduced part count and
§ Design features for improved manufacturing ease of assembly
* Patents and pending patents as of March 31, 2021 16Average Gross Non-Delivery Ambulatory Monthly Rates
300
POC Ambulatory Oxygen in Former CBAs
250 233
Stationary/Nocturnal Oxygen in Former CBAs
200 52
158
150 136 134
42 115 114 113 121
109 110 110
43 38
100 38 36 36 40
181 36 36 36
50 116
93 96 81
77 78 77 73 74 74
0
Medicare STD 2012 Round Round Round 1 Round 2 re-compete Round 1 2018 DME Fee 2019 DME Fee 2020 DME Fee 2021 DME Fee April '21 DME Fee
1 2011 2 Mid-2013 re-compete 2014 Mid-2016 re-compete 2017 Adjustment Adjustment Adjustment Adjustment Adjustment
¡ We believe lower reimbursement rates will drive conversion to non-delivery solutions, although there are challenges to HME provider adoption
¡ POC reimbursement rates are at a premium compared to stationary + tanks in 36-mo rental period
¡ Oxygen was removed from competitive bidding round 2021, and the removal of Medicare budget neutrality requirements increased rates in former
competitive bidding areas by ~10% and all other Medicare areas by ~5% effective 4/1/2021
¡ CMS has published a proposed rule to establish reimbursement rates going forward. It is unclear if there will be a future round of competitive bidding
17COVID-19 Policy Changes
The CARES Act extended the 50/50 blended rate for HME
providers in rural and non-contiguous, non-competitive
bid areas & established a new 75/25 blended rate for all
other non-competitive bid areas through duration of
COVID-19 public health emergency
Interim final rule published on Federal Register on 4/6/20
• Allows clinicians additional flexibility in determining Medicare
patient needs for respiratory devices to allow patients to
manage their treatments at home, including oxygen
concentrators and other respiratory products
• Allows waivers for signature and proof of delivery requirements
and accreditation and appeal extensions during the public
health emergency
18Strategic Value of New Aera Acquisition
§ Non-invasive ventilator (NIV) for select patients with chronic lung diseases
(Rx required)
Strengthens Complementary § Compatible with certain oxygen concentrators, oxygen cylinders, wall gas,
Technology Sales and certain medical air sources
Leadership Opportunity
§ Delivers higher flow and pressure versus traditional oxygen therapy
§ Proprietary micro nasal pillow design with built-in entrainment for
Enhances Expansion into
Financial Profile NIV Market maximum flow
§ 23 issued patents and 13 pending patent applications*
19
* Patents and pending patents as of March 31, 2021Benefits of TAV® vs. Standard Oxygen
§ Randomized, open-label crossover study comparing TAV vs. standard oxygen for its impact on exercise
endurance, oxygen saturation and Borg dyspnea
§ 18 subjects included moderate to very severe COPD or interstitial lung disease patients studied at a pulmonary
rehabilitation site
§ Primary endpoint was exercise endurance, secondary endpoints included SpO2, Borg dyspnea scores, leg
fatigue scores, and heart rate
20A Proven Team Built for Success
§ 30+ years of leadership with Becton Dickinson, SC Johnson / Diversey, and in various pharmaceutical and consumer goods
Nabil Shabshab companies. Extensive experience in running global businesses, accelerating growth through portfolio innovation, solution
President, Chief Executive Officer, BOD Member and market development, commercial strategies and execution, and organizational transformation
Ali Bauerlein § Co-founder of Inogen with 19 years experience in treasury, finance, accounting, risk management as well as strategic and
CFO, EVP Finance, Corporate Secretary & tactical cost analysis and forecasting
Corporate Treasurer
§ 29+ years of experience leading commercial organizations, driving innovation, managing strategic accounts, building
George Parr strong product portfolios and brands, and delivering exceptional customer experience globally in healthcare, consumer
EVP & Chief Commercial Officer and industrial industries with Becton Dickinson, SC Johnson / Diversey and private equity portfolio companies.
Brenton Taylor § Co-founder of Inogen with 19 years of experience in medical device product development and manufacturing
Executive Vice President, Engineering § Successfully obtained 26 issued U.S. patents for POC development
Bart Sanford § 30+ years of manufacturing and operations leadership experience, with 18 years in Danaher Corporation (Cepheid,
Executive Vice President, Operations Molecular Devices, Fluke Corporation)
Jim Runchey § 30+ years of corporate leadership experience with Zeiss, Invitrogen / Life Technologies, and Alaris Medical Systems in
Executive Vice President, Human Resources Human Resources and Commercial Operations
2122 Thank you Proprietary and Confidential
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