Post on 04-Aug-2016
description
From College Start-up to IPOCFA Presentation
Presenter: Ali BauerleinInogen, Inc
Co-Founder & CFO
June 2016
2
Notice regarding forward-looking statementsThese 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 current GAAP and non-GAAP guidance, including our estimates of 2016 revenue, adjusted EBITDA, adjusted net income, and related margin expectations; our expectations regarding the impact of competitive bidding and decreasing reimbursement rates; the size and estimates of growth in the oxygen therapy market; and our expectations with respect to our needs for additional capital. 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 in connection with competitive bidding and the Centers for Medicare & Medicaid Services rules; 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 in customer operations; 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 period ended December 31, 2015 filed with the Securities and Exchange Commission (SEC) on March 14, 2016. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 filed with the SEC on May 9, 2016. Accordingly, our actual results may materially differ from our current expectations, estimates and projections. Forward-looking statements represent our management’s beliefs and assumptions only as of our May 9, 2016 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. You should read our Annual Report on Form 10-K, quarterly reports of Form 10-Q, and other documents that we have filed and may file from time to time with the SEC for more complete information about Inogen, Inc. You may get these documents for free by visiting EDGAR on the Securities and Exchange Commission Web site at www.sec.gov.Use of Non-GAAP Financial Measures This Presentation includes certain non-GAAP financial measures as defined by SEC rules. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Management believes that non-GAAP financial measures, taken in conjunction with U.S. GAAP financial measures, provide useful information for both management and investors by excluding certain non-cash and other expenses that are not indicative of Inogen's core operating results. Management uses non-GAAP measures to compare Inogen's performance relative to forecasts and strategic plans, to benchmark Inogen's performance externally against competitors, and for certain compensation decisions. As required by Regulation G, we have provided a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, which is available in the Appendix following this Presentation. For future periods, we are unable to provide a reconciliation of non-GAAP financial measures as a result of the uncertainty regarding, and the potential variability of, the amounts of interest income, interest expense, depreciation and amortization, stock-based compensation, provisions for income taxes, and certain other infrequently occurring items, such as acquisition related costs, that may be incurred in the future.
3
Meet Mae & the Founding Story of Inogen
Inogen® offers a single solution, freedom and independenceInogen® offers a single solution, freedom and independence
2.8 pounds (single battery)
Up to 6 hours of run time with a double battery
A/C adaptable FAA approval:
expected 8/22/2016 Suitable for
overnight useInogen One G4™
4
Traditional O2 therapy challenged by market dynamicsTraditional
O2
Inogen
Cost effective
Maximizes mobility
Relevance today
Large reimbursement cuts implemented July 2013 with additional cuts to the remaining Medicare market in 2016
Oxygen delivery has high fixed and variable costs
Ambulatory O2 2x survival; 60% fewer hospital days1
1 day hospital visit > 1 year O2 therapy cost1
Baby boomer expectations Co-pays Consumer
involvement in healthcare decisions
Cost effective
Enables Quality of Life
Note 1: Retrospective Review of the 1980 Nocturnal Oxygen Therapy Trial Group led by Dr. Tom Petty published in 2000
5
Large, growing addressable oxygen market opportunity in beginning stages of POC adoption
Large market opportunity & high growth
POCs small but fastest-growing segment of
the market3
Note 1: Wintergreen Research Report, 2015Note 2: U.S. Department of Health National Heart, Lung, and Blood Institute www.nhlbi.nih.govNote 3: Based on 2014 U.S. Medicare claims data and our estimate of the ratio of the Medicare market to the total market
Approximately $3 billion to $4 billion market, with 2.5 – 3.0 million oxygen patients in U.S. and 4.5 to 5.0 million patients worldwide as of year-end 20141
Oxygen patient population is estimated to grow 7-10% per year between 2013 – 20211
Increasing emphasis on earlier diagnosis of respiratory disease. An estimated 50% of COPD patients are currently undiagnosed2
POCs have penetrated ~6.9% of the Medicare market3
U.S. market size and growth rate used for this calculation is the mid-point of 7-10% estimated per year growth of U.S oxygen patients.
1
6
Major Milestones 2001-2007
2001: Company founding 2002: Angel funding 2003: Venture capital funding / graduation 2004: FDA approval / product launch 2005: FAA approval / reimbursement approval 2006 / 2007: The dark years – survival, bringing
manufacturing in-house, restructure
7
$29.3
$43.8
$8.8$13.4
2014 2015 Q1 2015 Q1 2016
$19.3
$34.4
$5.9$9.5
2014 2015 Q1 2015 Q1 2016
Building the Inogen brandTargeted advertising Consumer preference
Domestic direct-to-consumer sales ($mm) Domestic business-to-business sales ($mm)
($mm)
Founded in patient preference Founded in patient preference
8
Major Milestones 2008-2014
2008: PIVOT – Direct to consumer 2009: Medicare accreditation 2012: Texas expansion 2014: IPO
9
Inogen IPO Key Milestones
Q1 2014
SEC comments Final S1 Roadshow Pricing Closing
Q4 2013
S1 submission / amendments SEC comments Stock split Roadshow prep Analyst day #2 Financial projections
Q3 2013
Org meeting S1 drafting & due diligence Analyst day Audit / financial
statement prep Vendor selection Testing the waters meetings Board actions
Q2 2013
Investment banker bake-off Analyst discussions Board Approval
Last but not least, STILL RUNNING YOUR BUSINESS & DELIVERING RESULTS!
10
IPO Summary 6 S1 filings & amendments 10+ SEC comment responses 262 S1 page count Roadshow
– 9 days (7 business days)– 12 cities (9 states)– 2 teach-ins– 50 investor meetings
Costs– $5M brokers– $1.3M accounting/printing– $1.2M legal– $0.4M other
Countless stressful days & nights
$72.2M Capital raised– $52.5M net cash – $16 per share (in the range)– $291M market cap at IPO
(2.8X 2014E Revenue) 6.6X oversubscribed $1.5-3M ongoing costs Continuous scrutiny &
reporting obligations Ongoing analyst / investor
education & outreach
11
$10.7 $23.6$30.6
$48.6
$75.4
$112.5
$159.0
$43.0
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
$160.0
$180.0
$200.0
2009 2010 2011 2012 2013 2014 2015 2016E*
$146*
Track record of growthRevenue ($mm)
*2016 estimated revenue of $189M based on the midpoint of guidance provided during the Company’s press release on May 9, 2016 of $187M - $191M. This outlook represents the Company’s guidance only as of that date.
Chart calculations based on the mid-point of guidance.
12
$24.0
$32.3
$38.0
$6.4$8.1
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
2014 2015 2016E
FY
Q1
Growth with strong margins
Reconciliation of these non-GAAP measures to GAAP net income is provided in the appendix of this presentation.
*2016 estimated Adjusted EBITDA of $38M and Adjusted Net Income of $13M based on the midpoint of guidance provided during the Company’s press release on May 9, 2016 of $37M - $39M and $12M - $14M, respectively. This outlook represents the Company’s
guidance only as of that date. Chart calculations based on the mid-point of guidance.
Adjusted EBITDA ($mm) Adjusted Net Income ($mm)
Adj. EBITDA Margin
%
$6.6
$10.0
$13.0
$1.6$2.4
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
2014 2015 2016E2014 2015 2016E*5.8% 6.3% 6.9%*
Adj Net Income Margin
%
2014 2015 2016E*21.3% 20.3% 20.1%*
13
Multiple avenues to drive future growth
Expansion of direct-to-consumer network
Increase B2B distribution (domestic & international)
Growth in physician referrals
Negotiate private payor contracts
166 inside sales reps*
27 people in clinical, 66 in billing, 33 in patient customer support & service*
Distribution in U.S. and 44 int’l countries
3 B2B sales team, 3 sales support team*
14 outside physician sales team, 2 outside physician sales support team*
84 non-Medicare contracts*
New products Inogen One G3 upgrade launched Q4 15
Inogen One G4 launched Q2 16
*Headcount and private payor contracts provided as of December 31, 2015 and March 31, 2016, respectively
14
Company highlights
Market leader in large, growing, underpenetrated market
DTC model enables innovation and customer access
Differentiated product portfolio with commitment to R&D
Seasoned management team with proven track record
Attractive financial profile
Proprietary and Confidential 15
Proprietary and Confidential 16