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Inogen (INGN) Introduces Next-Gen Inogen One G4 POC

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Inogen Inc. (INGN - Free Report) recently launched a next-generation portable oxygen concentrator (POC) – Inogen One G4. The new device weighs only 2.8 pounds and is 40% lighter and almost half the size of Inogen One G3.

Inogen One G4 offers long battery life of up to 6 hours with an optional double battery, a large LCD screen, and quiet operations. According to Inogen “the Inogen One G4 boasts the highest oxygen output per pound of weight of any oxygen concentrator currently available in the supplemental oxygen therapy US homecare market.”

Inogen One G4 is now available for sale to oxygen therapy patients in the company’s direct-to-consumer sales channels. Inogen expects to make the product available on additional sales channels, including domestic and international business-to-business channels, over the coming months.

The direct-to-consumer channel launch will drive top-line growth in the near term. Management expects direct-to-consumer sales to be Inogen’s fastest growing channel in 2016.

Moreover, Inogen One G4 fulfils the acceptance criterions that the Department of Transportation and the Federal Aviation Administration recently published for POCs to be used on-board aircraft. Hence from Aug 22, 2016, passengers will be able to use the Inogen One G4 on flights. This expanded use is likely to drive adoption of the device.

We believe that Inogen’s unique direct-to-customer business model, innovative product line and growing patient base are the key catalysts. Expansion of the company’s direct-to-consumer network and shift to cash sales of systems will boost margins.

However, anticipated changes in Medicare reimbursements are likely to hurt rental revenues. Inogen continues to expect total revenue from Medicare competitive bidding national rollout of 3.5%–4% in 2016.

Zacks Rank & Key Picks

Inogen carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the medical sector include Masimo Corp (MASI - Free Report) , Cryolife and Exactech . While Masimo sports a Zacks Rank #1 (Strong Buy), Cryolife and Exactech carry a Zacks Rank #2 (Buy).

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