INSP competition

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Hi:
First, I want to thank MountainTom for bringing INSP to the board. I took a small get-your-feet-wet position.
One thing I wanted to investigate further before taking a full position was potential competition for similar devices (setting aside other types of treatments such as CPAP). INSP’s filing notes that they have the only FDA approved neurostimulation device available. But they also note that a competitor also sells a neurostimulation device outside the US (imThera), and that they are in trials in the US (but not yet approved by FDA).
I wondered if MountainTom or anyone else here has any feeling for whether INSP has better technology or patents, or some other kind of moat? Or is their success mostly dependent on becoming the top dog in the US market quickly?

-lemur

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Hi Lemur,

Thanks for your investigation into the competition. According to the company, they will be the only company in the market with the approved technology for at least a few years. As you noted, there is one other company, ImThera that is currently conducting clinical trials. ImThera was acquired by LIVN in December, last year. See the following link for trial details:

https://clinicaltrials.gov/ct2/show/study/NCT02263859


   
                 Study Start Date :         February 2015
Estimated Primary Completion Date :         March 2019
  Estimated Study Completion Date :         December 2022

So it is likely that their device could be approved in next few years. For medical device companies, long term follow-up data is usually very important to convince clinicians or patients. INSP had their device approved by FDA in 2014, they are only able to publish the 5-year data this year. Therefore, even ImThera device can be approved, INSP is 6-9 years ahead of them. Their technology is also different. There is a large body of published literature on INSP technology but very little on ImThera technology. INSP started the development of their technology 20 years ago in MDT. It takes a long time to have publications accumulated.

There was another company, Apnex who were also developing the stimulation device for apnea. But they ceased operation in 2013 after early results of their clinical trial proved disappointing.

https://www.bizjournals.com/twincities/blog/in_private/2013/…

There is another company with approved device to treat central sleep apnea (CSA), which is not a competition for INSP. INSP system does not treat CSA. But it is a good investment candidate to watch for its IPO.

https://www.respicardia.com/press-releases/respicardias-reme…

INSP technology is protected not only by their patents, it is also protected by industrial secrets and recognition by the clinicians and patients. In fact, this is why I like medical device companies. Even their patients expired, someone else can reverse-engineer a similar device, they still need do clinical trials to prove their devices, which usually take a long time. After that, they still need to win the mind and heart of clinicians and patients. Unlike a software company like Yahoo (or ayx or mdb), a few college students in their dorm will be able to conjure up a better idea to disrupt it. A new and better device or therapy usually shows up as a major publication or an important presentation in a major meeting, it will then be slowly accepted in the field. It will take even longer to become a commercial competition. However, it is always important to watch the competition carefully, even the competition comes slowly.

Regards,

Tom

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Thanks Tom, that was quite helpful.
-lemur

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Thank you Tom for your stock idea, I also bought a starting position (around 2%).

Best,

Ascent