Inogen takes ‘steps in right direction’
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By Liz Beaulieu, Editor
Updated 9:57 AM CDT, Fri August 9, 2024
GOLETA, Calif. – Inogen reported strong financial results for the second quarter, including a 6% increase in revenue year over year and a 14% increase sequentially, as the company continues to fine tune its business model.
During a recent conference call, CEO Kevin Smith again highlighted pilot programs to 1) target hospitals, in addition to individual practitioners, as referral sources in its rental channel; and 2) cross-train its sales reps to execute both cash and insurance transactions in its direct-to-consumer channel.
“We’re working through the pilots – working on making sure that we’re managing the cost within that to optimize – but we feel good with the structure that we have today going forward,” he said.
The rental and DTC channels continue to lag the domestic business-to-business channel, which saw revenue increase 16.5% to $21.3 million in the second quarter, driven by increased volumes with new and existing customers. Rental revenue decreased 6.2% and DTC sales decreased 15.6% for the quarter.
Profitability milestone
One of Inogen’s three strategic priorities is “advancing our path to profitability” and in the second quarter, the company reported its first quarter of profitability since Smith took over as CEO in November 2023. Adjusted EBITDA was a positive $1.3 million vs. a loss of $3.2 million year over year.
“This is an exciting milestone and a meaningful step in the right direction,” he said. “But please note our path to durable profitability will not necessarily be linear, as we will continue to invest thoughtfully in support of growth. Over time, we do see a pathway to sustainable adjusted EBITDA profitability with our current innovation pipeline and product portfolio.”
Innovation pipeline
Inogen continues to make progress toward getting Physio-Assist’s Simeox tech-enabled airway clearance device, which it acquired in 2023 for $32 million, approved in the U.S., and the company plans to launch its newest generation portable oxygen concentrator, the Rove 4, in the back half of the year. The Rove 4, Smith said, offers patients a fourth flow setting and a service life of up to eight years.
“These innovations are representative of our mission to provide patients on oxygen therapy with an opportunity to maintain mobility and quality of life as they undergo treatment,” he said. “Additionally, we continue to invest in our digital offerings to ensure Inogen devices remain as easy to utilize and maintain as possible.”
Market intel
Inogen did see a “modest tailwind” in its B2B channel following the decision by Philips to exit the POC market. Smith also acknowledged there is “pricing pressure” in the market.
“We’ve been maintaining some pricing discipline,” he said. “There’s price pressure, yes. We see that. We feel that from competitors. But we've got the right messaging to be able to pull through on that. We've been holding relatively stable.”
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