Acquisition Enables Evolution to a Global
Respiratory Care Company by Adding a Sizable, Growing and
Underserved Airway Clearance Market Opportunity
Inogen Provides Preliminary, Unaudited Second
Quarter Financial Update
Inogen to Announce Second Quarter Financial
Results on August 7, 2023
Inogen, Inc. (Nasdaq: INGN), a medical technology company
offering innovative respiratory products for use in the homecare
setting, today announced that the company has entered into a
definitive agreement to purchase Physio-Assist SAS, a
privately-held company headquartered in France.
Physio-Assist developed and manufactures Simeox, a
technology-enabled airway clearance device with a proven efficacy
and safety profile, currently used outside of the United States, to
treat a condition in the lungs known as bronchiectasis, where the
lung’s bronchi become damaged and widened, that is often present in
cystic fibrosis and chronic obstructive pulmonary disease. Simeox
is used in pulmonary rehabilitation centers, as well as at home.
Simeox has been cleared under CE mark in the EU and is currently
being sold in Europe, Asia, and the Middle East.
“This acquisition aligns with our strategy to diversify our
portfolio to globally improve patient lives through respiratory
care,” said Nabil Shabshab, President and Chief Executive Officer
of Inogen. “Simeox imminently expands our product offering in EMEA,
and potentially in the US to serve COPD and other chronic disease
patients who suffer from bronchiectasis with an innovative,
non-invasive, and next generation airway clearance solution. We
believe this is a compelling transaction, as it expands our
addressable market opportunity, enhances our long-term growth and
profitability, and is expected to generate an attractive return on
investment.”
“I am very excited about Physio-Assist becoming a part of the
Inogen organization and view this as a significant milestone in the
journey to scale the Simeox differentiated product offerings
globally in service of bronchiectasis and cystic fibrosis patients
with unmet needs,” said Adrien Mithalal, Chief Executive Officer of
Physio-Assist.
Strategic Rationale
- Aligns with Inogen’s strategy to diversify its portfolio and
expand market opportunities imminently in the rest of the world and
potentially in the US.
- Aligns with Inogen’s long-term financial goals.
- Leverages Inogen’s commercial infrastructure and
capabilities.
- Provides a differentiated and clinically proven innovative
airway clearance technology with capital sales and desirable
recurring revenue from disposables.
- Provides access potentially to a large growing bronchiectasis
market opportunity with 400,000 to 490,000 patients in the US upon
regulatory clearance.
Financial Details
Inogen will pay approximately $32 million in cash net of debt
payable at closing, plus potential future cash performance-based
milestone payments based on achievement of goals related to FDA
clearance of the device. The total consideration, if all milestones
are achieved, will not exceed $45 million. The amount of the
performance-based milestones may also be adjusted net of related
development costs.
In 2023, the acquisition is expected to be immaterial to
Inogen’s revenue and immediately accretive to gross margin. Given
the clinical and commercial investment required to obtain FDA
clearance and launch Simeox in the US, the transaction is expected
to be accretive to adjusted earnings beginning in 2027. The
transaction, which has been approved by the Board of Directors of
Inogen and Physio-Assist, is subject to the satisfaction of
customary closing conditions, including Foreign Investment
Authority approval from the French Ministry of Economy. The
transaction is expected to close in the fourth quarter of 2023.
In connection with the acquisition and to facilitate the
operations of Physio-Assist between signing and expected close of
the transaction, Inogen will be providing Physio-Assist a
short-term loan in the amount of up to $500,000. Upon close,
assuming the full $500,000 has been drawn, $250,000 will be used to
reduce the purchase price and $250,000 will be forgiven.
Preliminary, Unaudited Second Quarter Financial
Update
Inogen estimates preliminary, unaudited total revenue in the
second quarter of 2023 to be in the range of $83 million to $84
million. Revenue was lower than expected in US and International
business-to-business, and lower direct-to-consumer revenue despite
continued productivity gains. This performance was partially offset
by growth in rental revenue reflecting the company’s strategic
focus on US prescribers.
These preliminary, unaudited estimates are based solely upon
information available to management as of the date of this press
release. Inogen’s actual results may differ from these estimates
due to the completion of its quarter-end closing procedures, final
adjustments and developments that may arise between now and the
time its financial results for the quarter ended June 30, 2023, are
finalized. In light of these preliminary results, the Company
intends to provide updated 2023 guidance on the second quarter
earnings call.
Quarterly Conference Call Information
Inogen will issue second quarter 2023 financial results after
the market closes on Monday, August 7, 2023. On the same day, the
Company will host a conference call at 1:30 p.m. PT / 4:30 p.m.
ET.
Individuals interested in listening to the conference call may
do so by dialing:
US domestic callers (877) 841-3961 Non-US
callers (201) 689-8589
Please reference Inogen to join the call. To listen to a live
webcast, please visit the Investor Relations section of Inogen's
website at: http://investor.inogen.com/. This webcast will also be
archived on the website for 6 months.
A replay of the call will be available approximately three hours
after the live webcast ends and will be accessible through August
14, 2023. To access the replay, dial (877) 660-6853 or (201)
612-7415 and reference Conference ID: 13739327.
Inogen has used, and intends to continue to use, its Investor
Relations website, http://investor.inogen.com/, as a means of
disclosing material non-public information and for complying with
its disclosure obligations under Regulation FD. For more
information, visit http://investor.inogen.com/.
About Inogen
Inogen, Inc. (Nasdaq: INGN) is a leading global medical
technology company offering innovative respiratory products for use
in the homecare setting. Inogen supports patient respiratory care
by developing, manufacturing, and marketing innovative
best-in-class portable oxygen concentrators used to deliver
supplemental long-term oxygen therapy to patients suffering from
chronic respiratory conditions. Inogen partners with patients,
prescribers, home medical equipment providers, and distributors to
make its oxygen therapy products widely available allowing patients
the chance to remain ambulatory while managing the impact of their
disease.
For more information, please visit www.inogen.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including, among others, statements with respect to the
acquisition of Physio-Assist including impact on gross margin,
statements related to Inogen’s portfolio diversification, product
expansion, addressable market opportunity including potentially in
the US, and long term growth and profitability; and statements
related to Inogen’s preliminary second quarter 2023 results and
intention to provide updated guidance. Any statements contained in
this communication that are not statements of historical fact may
be deemed to be forward-looking statements. Words such as
“believes,” “anticipates,” “plans,” “expects,” “will,” “intends,”
“potential,” “possible,” and similar expressions are intended to
identify forward-looking statements. 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 related to completion of the
acquisition and achievement of milestones, and risks arising from
the possibility that Inogen will not realize anticipated future
financial performance or strategic goals. In addition, Inogen's
business is subject to numerous additional risks and uncertainties,
including, among others, risks relating to market acceptance of its
products; competition; its sales, marketing and distribution
capabilities; its planned sales, marketing, and research and
development activities; interruptions or delays in the supply of
components or materials for, or manufacturing of, its products;
seasonal variations; unanticipated increases in costs or expenses;
and risks associated with international operations. Information on
these and additional risks, uncertainties, and other information
affecting Inogen’s business operating results are contained in its
Annual Report on Form 10-K for the period ended December 31, 2022,
and its Quarterly Report on Form 10-Q for the three month period
ended March 31, 2023, and in its other filings with the Securities
and Exchange Commission. These forward-looking statements speak
only as of the date hereof. Inogen disclaims any obligation to
update these forward-looking statements except as may be required
by law.
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Agnes Lee ir@inogen.net
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