Goleta-based Inogen is exploring new avenues of growth in the oxygen concentrator market.
Two of the company’s three co-founders — Brenton Taylor, executive vice president of engineering, and Byron Myers, executive vice president of sales and marketing — told members of the Santa Barbara Executive Roundtable on June 8 that Inogen is entertaining expansion ideas three years after the company went public.
Inogen’s executive team described efforts to preserve the company’s continuously “disruptive business model” in the medical device market.
“In the beginning, we did what everyone else did and told us to do. Then we went straight to the patient,” said Myers.
Selling directly to the customer and cutting out the middlemen for portable oxygen device distribution has been a major success for Inogen. Now, as Taylor and Myers look to the future, their greatest hope is to expand their direct-to-consumer network in international markets.
Currently, consumer purchases account for roughly 50 percent of revenue, and the majority of clients are from the U.S. and Western Europe. The company does a comparably small amount of business in Australia, Singapore, New Zealand and Latin America.
Inogen wants international sales to reach new nations but also hopes to create a deeper footprint in the European markets the company has entered. There the diagnosis of chronic obstructive pulmonary disease — a main driver of sales — is not diagnosed as commonly as it is in the U.S.
Since Inogen has cornered the domestic direct-to-patient market, the company is looking to grow by increasing business-to-business distribution and physician referrals. Taylor and Myers said that they want to make sure the company keeps developing organically and considers all possible distribution streams. While they currently have sales in those markets, they said diving deeper into them might be warranted.
Finally, the founders said, they want to better negotiate payer contracts to increase their bottom line and create new portable oxygen products while improving the old ones.
Taylor said “Historically, in the (direct-to-consumer) marketplace, you see a different type of product cycle — (it’s) much different than distributor markets, which stick with products for 10 to 15 years.”
Taylor and Myers said the medical device market has been growing at a steady 7 to 10 percent per year in the U.S., which Inogen plans to capitalize on while diversifying its products.
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