Inogen lines up strong 2016
GOLETA, Calif. – The second quarter went so well for Inogen that the manufacturer and provider of portable oxygen concentrators has increased its guidance for the year.
Inogen reported total revenues of $54.6 million for the second quarter, a 23.9% increase compared to the same period last year. It reported a net income of $5.1 million, a 48.7% increase.
“Domestic business-to-business sales were again our strongest growth channel, increasing 61.3% over the second quarter of 2015, primarily due to purchases from traditional home medical equipment providers and strong private label demand,” said Raymond Huggenberger, CEO. “As expected, in this phase of reimbursement reductions, more HME businesses are turning to portable oxygen concentrators and specifically to Inogen to improve their cost position.”
Inogen has increased its 2016 revenue guidance to a range of $190 million to $194 million, representing year-over-year growth of 19.5% to 22%. Previously, it provided guidance of $187 million to $191 million.
The strong financial results and increased guidance come as the HME industry experiences its steepest Medicare cuts yet, an accomplishment not lost on Inogen officials.
“When we look at the increase in guidance in spite of seeing those additional reimbursement reductions, it really is because the domestic B2B side continues to perform very nicely for the company and we continue to expect strength in those channels as more providers switch toward non-delivery solutions like POCs, and in particular our POC,” said Ali Bauerlein, CFO and co-founder.
Inogen expects private label sales, in particular—a business that has been in play for the company for about a year now—to be a growing contributor to business-to-business sales going forward.
“(Our private label partner) continues to invest in sales and marketing, and continues to drive the conversion to POCs,” Bauerlein said. “So we do see them as a critical partner and somebody who is performing well for us.”
Inogen also expects a boost going forward from the recent launch of its Inogen One G4, which began shipping to the direct-to-consumer market at the tail end of the second quarter. The company expects to expand shipping to the business-to-business market in the third quarter.
“We had about a month of sales traction in the second quarter, but we did not do any G4-focused advertising in May, June,” Huggenberger said. “We just started to launch our G4 focused advertising in the third quarter and we will continue to scale that up throughout the third quarter. So, what that means is the sales that you see in the second quarter, they are really based on our individual reps talking about that product to patients that initially responded to a G3.”