Inogen sees ‘pull through’ demand for POCs

GOLETA, Calif. – Inogen reported a 17.9% increase in sales of portable oxygen concentrators to HME providers in the fourth quarter of 2020, a sign of just how much the pandemic is straining the supply of stationary oxygen concentrators, a more common therapy for COVID-19 patients. 

That’s compared to a 25.2% decrease in direct-to-consumer sales for the quarter. 

“Traditionally, these patients are treated with stationary oxygen concentrators, because if they’re still recovering from COVID, ambulation is not their biggest priority and it typically would be a higher flow unit,” said Ali Bauerlein, co-founder and CFO, during a conference call to discuss the company’s financial results. “But as that supply got constrained in the fourth quarter, we did see a pull through in POC demand for that use, since they couldn’t get access to more traditional therapy.” 

Inogen reported total revenue of $74 million for the fourth quarter, a 6.3% decrease compared to the same quarter in 2019, and a net loss of $5.1 million vs. $1.38 million. The company reported revenue of $308.5 million for 2020 compared to $361.9 million for 2019, and a net loss of $5.8 million vs. a net income of $20.95 million. 

The increase in sales to providers is continuing into the first quarter of 2021, with continued pressure on the supply of stationary oxygen concentrators, Bauerlein said. 

“But it’s really hard to tell any long-term impacts at this point,” she said.  

Another highlight in the fourth quarter – and a segment of Inogen’s business that will be an area of focus in 2021 – was rentals, company officials say. The company reported rental revenue was $9.4 million for the quarter, a 71.7% increase compared to the same period in 2019. 

“While we expect the COVID-19 pandemic and any potential for further prolonged lockdowns would have a negative impact on our sales revenue in the period, we believe it is prudent to continue to make investments to build the necessary infrastructure to support our strategy to focus on rentals at the onset of care,” said Bauerlein. “As part of this strategic initiative, we plan to expand our physician sales force and to build out the infrastructure to enable us to offer our physicians the necessary solutions to better serve their patient’s needs.” 

Hand in hand with expanding Inogen’s physician sales force will be expanding the clinical evidence for their POCs, says Nabil Shabshab, CEO. 

“We’d like to be able to do some clinical studies to prove the value of POCs and their superiority over other modalities of therapy,” he said. “It’s established that oxygen therapy is definitely very helpful and beneficial. We believe that there is an added plus to adherence and compliance, which I think is at the core of the offering that we have.” 

Much like Inogen’s push in consumer sales increased awareness of POCs and, therefore, increased business for providers, so will its push in physician sales, Bauerlein says. 

“We think driving more physician awareness of POCs and the options that patients have, and why the technology really does work for the mass majority of the ambulatory, long-term oxygen therapy patients – that’s something that we think will help supplement the work that the provider community is already doing on physician education,” she said.