Inogen readies for ramp up

GOLETA, Calif. – Inogen’s 10.2% decrease in total revenues for the first quarter of 2023 was impacted, in part, by HME provider customers tightening their belts, but the company is making progress winning them over with its value proposition, says CEO Nabil Shabshab. 

The company reported sales revenue of $55.8 million for the first quarter of 2023 compared to $67.4 million for the same period in 2022, about a 17% decrease. 

“There were some challenges in the business-to-business channel in the U.S., in terms of our customers thinking a little bit about capital deployment and restructuring, in terms of operating expenses,” said Nabil Shabshab, president and CEO. “So, we continue to work with them in terms of landing ordering where we need it to be. The start was a little bit softer, but we’re encouraged by the progress we’re making.” 

Inogen’s revenues were actually in line with its expectations, while its gross margin (42.6% in the first quarter this year vs. 43.5% in the same period last year) and adjusted EBITDA (negative $11.8 million vs. negative $5 million) were slightly above its expectations. 

The company’s value proposition to HME provider customers “remains solid,” Shabshab said. 

“We continue to monitor the overall market dynamic in the U.S. B2B channel,” he said. “Our strong and unique value proposition remains solid, as Inogen’s brand equity, device quality and service come together to deliver optimized POC fleet deployment and competitive total cost of ownership for HMEs with high patient satisfaction. This has helped in adding new HME customers and expanding the base we serve, while we manage competitive pressures.” 

Inogen did enjoy reported rental revenues of $16.3 million for the first quarter this year vs. $13 million in the same period last year, a 25% increase, driven by the addition of two large private health care payers increasing the company’s total covered lives to about 160 million and by the ramp up of its prescriber channel. 

“Rental revenue continues to be a strong growth trajectory at the one-year anniversary of our renewed focus on the prescriber channel,” Shabshab said. “The execution behind our prescriber channel strategy has delivered double-digit increases in referrals and sales rep productivity, sequentially.” 

This year will be an “inflection point” for Inogen, Shabshab said, as the company continues to evolve its channel strategy, but it expects a “ramp up” in the back half of the year “in all channels.” 

“Our channel strategy was designed to improve our ability to serve patients at the point of diagnosis and prescription through Inogen and HME partners, while refining our DTC model, to meet the needs of patients who desire to switch to POC-based therapy later in their disease-management journey,” he said. “In 2023, we look forward to the continued evolution of our channel strategy into a patient-centric one, agnostic to channel boundaries to accelerate patient and prescriber adoption, driving scale, predictability and profitability over time.”  

• Read more about Inogen’s prescriber channel strategy.