- Over 31 million Americans have hearing loss but don’t utilize a hearing aid, primarily due to prohibitively high costs
- In the last 5 years, U.S. Presidents and Congress has demonstrated a strong commitment to making hearing aids affordable to all, including pressure on the FDA to complete changes now
- InnerScope has aggressively grown its business model through two key acquisitions and new sales channels that should lend to significant revenue growth as new regulations are put in place
More than 38 million Americans have some degree of hearing loss. Sadly, due mostly to prohibitively high costs, only about 20% of those people are able to improve their quality of life using hearing aids. The winds of change are blowing in for the 31 million Americans left behind, thanks to Congress prodding the U.S. Food and Drug Administration (“FDA”) to make changes and companies like InnerScope Hearing Technologies (OTC: INND) disrupting the market with new Direct-to-Consumer (“DTC”) technologies.
In 2017, President Trump signed the Over-the-Counter Hearing Aid Act into law. The new law received strong bipartisan support to eliminate arcane regulations limiting availability to over-the-counter (“OTC”) hearing aids while supporting new competition in the markets to drive prices down to a level affordable by all. In July 2021, President Biden issued the Executive Order on Promoting Competition in the American Economy, which detailed his commitment to promoting OTC hearing aids for those in need. Now, it is time for the FDA to act with the comment period for key provisions in the FDA’s proposed rule for regulating OTC hearing aids ended on January 18, 2022.
Congress is getting impatient with the FDA to finalize the rules to exclude any unnecessary restrictions that hinder access to OTC devices or limit their effectiveness for Americans with mild or moderate hearing loss. This point was made clear in a letter penned by Senators Chris Van Hollen (D-Md.), Elizabeth Warren (D-Mass.), and Chuck Grassley (R-Iowa) to Janet Woodcock, Acting Commissioner of the FDA, in February, which implored the agency to “finalize this rule without delay and in a manner that is consistent with congressional intent.”
Changing regulations to support affordable hearing aids and competition is aligned perfectly with InnerScope expanding its business through a combination of key acquisitions and a network of major retailers and pharmacy chains. Headquartered in Roseville, California, InnerScope is a leading DTC manufacturer and distributor of FDA-registered hearing aids, hearing assistive devices, hearing health-related products, and Personal Sound Amplifier Products (“PSAPs”).
Late in 2021, InnerScope moved aggressively to expand operations, buying iHear Medical and HearingAssist. The acquisition of iHear Medical brought a 40+ hearing technology patent portfolio, a research, and development team, and an R&D facility into the InnerScope family. Merging with HearingAssist was an instant revenue injection and scaling opportunity as an emerging industry powerhouse. A major hearing aid supplier to Walmart, HearingAssist generated $72 million in gross revenues in the three years before the InnerScope acquisition.
These operations complement the overall InnerScope strategy to serve the millions of people that will benefit from new FDA rules. InnerScope has built out a comprehensive ecosystem, complete with an eCommerce site (www.iHearDirect.com) and a newly launched call center (www.HearingAssist.com, 1-800-700-4327), where its customers have free access to a team of highly-experienced industry talent, consisting of licensed hearing professionals, including doctors of audiology, top salespeople, and a team of hearing aid customer care representatives.
The company further offers its hearing aids through partnerships with www.FSAstore.com, www.HSAstore.com, and www.WellDeservedHealth.com, online stores specializing in serving consumers enrolled in flexible spending accounts (“FSA”), health saving accounts (“HSA”), and employers’ health incentive programs.
The relationship with Walmart took another positive turn with select InnerScope products making their debut in the retail giant’s online store in Canada (www.Walmart.ca). Initially, the site will feature INND’s TReO(TM) by iHEAR(R) 3-IN-1 PSAP, Hearing Assist TV Listener / Hearing Amplifier, Hearing Assist Earwax Removal Ear Spray, and Hearing Assist Dehumidifier for Hearing Aids.
Hearing loss is prevalent in Canada, much like the U.S., affecting about 65% of Canadians over the age of 70. New research from Statistics Canada shows that more than half of Canadians between the ages of 40 and 79 have at least mild hearing loss, but 77% of them don’t realize it.
Late in March, InnerScope announced that 9 of its products are now available on the eCommerce site of Rite Aid. The initial launch included HearingAssist’s hearing aid care and assorted hearing aid batteries, earwax removal ear spray, and a Wireless Neckband TV Listener Hearing Amplifier.
Elsewhere, in recent months, InnerScope updated in-store product displays in 757 Walmart locations throughout Colorado, Tennessee, Texas, Arizona, and North Carolina; and launched 14 in-store Hearing Screening Kiosks with Hy-Vee, Giant Eagle, Food City, and Hartig Drug as part of a larger package where over 65 kiosks are already committed to retailers.
Investors will be looking forward to upcoming quarterly reports to see the effect of the acquisitions, new call center, kiosks, and expanded sales channels on the top and bottom lines. The company recently released its 2021 annual report, which showed revenues increased from $529,192 to $695,053 for fiscal 2021. Gross profits rose from $113,371 in fiscal 2020 to $490,266.
With all the recent developments, InnerScope CEO and President Matthew Moore commented, “[We] have an exciting roadmap for 2022 clearly defined ahead and after the Over-the-Counter Hearing Aid Law is enacted. We continue to add new retailers to our ever-growing distribution list, including, as previously announced, Rite Aid Pharmacy. In addition, our R&D team is working to bring new proprietary patented hearing aid products to market later this year.”
For more information, visit the company’s website at www.INND.com.
NOTE TO INVESTORS: The latest news and updates relating to INND are available in the company’s newsroom at https://ibn.fm/INND
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