Inogen: ‘We’re continuing to see healthy orders’

GOLETA, Cailf. – Two major factors contributed to Inogen’s 13.2% increase in revenue in the third quarter: The company remediated “the significant portion of its backlog,” and it made “excellent progress” with its prescriber strategy, says President and CEO Nabil Shabshab.   

Shabshab declined to detail the size of the backlog of orders in its domestic business-to-business channel, but Inogen recorded $42.5 million in sales for the channel in the third quarter compared to $22.8 million for the same period last year.  

“Now, the discussions are ongoing, in terms of how we mitigate the remainder of the orders for the year, as well as when we get back to normalized sales levels,” he said during a recent conference call to discuss the company’s financial results for the third quarter. “What does that look like? But we are continuing to see healthy orders coming in, in general, with a few exceptions here and there, but they’re not notable.” 

During a previous conference call to discuss financial results for the second quarter, Shabshab had said Inogen was prioritizing supply for the B2B channel in the short term  to reduce the backlog, but now he expects the company to “get back, hopefully, to balancing these channels as much as possible.” 

‘Key strategic focus’ 

Increased productivity from Inogen’s prescriber team is boosting sales for its domestic direct-to-consumer rental channel, which has seen a 25% increase in revenue for the first nine months of this year compared to the same period last year, Shabshab said. 

“This is relatively new, but this was our key strategic focus, in terms of actually expanding penetration of POC-based oxygen therapy,” he said. “I think the productivity that we’re seeing relates to three things: One is the ability to actually get the right coverage of the biggest prescribers; secondly, get to the right frequency; and thirdly, shorten the sales cycle, in terms of getting referrals from them.” 

Because most patients put on therapy by prescribers are expected to be rentals, Inogen is also securing coverage from private payers, most recently Humana, adding 25 million covered lives in the United States, Shabshab said. 

“(This) is expected to drive sales productivity by expanding the overall number of prescriber referrals that we can convert to rental patients,” he said. 

Macroeconomic factors 

Despite uncertainties from macroeconomic factors, Shabshab did say he expects Inogen’s revenue for the fourth quarter to be in the range of $87 million to $92 million, representing growth of about 14% to 20% year-over-year. 

“We know that the macroeconomic conditions might have an impact,” he said. “We are working hard to try and isolate that. It’s not easy to be able to pull that out from the performance, but we're being very diligent, in terms of how we're watching for that.”