A securities class action has been filed against Inspire Medical Systems, Inc. (INSP) on behalf of all persons or entities who purchased or acquired Inspire Medical common stock between August 6, 2024 through August 4, 2025. This case has been filed in the USDC – MN.
Inspire Medical develops and manufactures an implantable medical device called “Inspire” to treat obstructive sleep apnea. The latest version of the Company’s device, Inspire V, uses an implanted sensor and neurostimulator designed to improve respiration during sleep.
The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Specifically, the lawsuit alleges that throughout the Class Period, Defendants misrepresented and failed to disclose key facts about Inspire V, including the actual market demand for the device and whether the company had taken the steps necessary to successfully launch it. Defendants issued a series of materially false and misleading statements that led investors to believe demand for Inspire V was strong and that Company had taken the necessary steps for a successful launch.
Investors learned the truth on August 4, 2025 when the Company revealed that the Inspire V launch was facing an “elongated timeframe” because, among other issues, “many centers did not complete the training, contracting and onboarding criteria required prior to the purchase and implant of Inspire V.” That same day, Defendants further admitted that although Inspire V’s CPT code has been approved for Medicare patients, “software updates for claims submissions and processing did not take effect until July 1,” which meant that “implanting centers would not be able to bill for those procedures until July 1.” As a result, many treatment centers simply chose to continue treating with Inspire IV. Finally, Defendants revealed that the Inspire V rollout was plagued by poor demand resulting from excess inventory, and the Company reduced its 2025 earnings guidance by more than 80%.
On this news, the price of the Company’s common stock declined more than 32%, from a close of $129.95 per share on August 4, 2025, to close at $87.91 per share on August 5, 2025 wiping out $1.2 billion in market capitalization in a single day of trading. From the Company’s Class Period stock price closing high of $216.71 per share on September 23, 2024, Inspire Medical’s stock price dropped an astonishing $127.00 per share, or nearly 60%, erasing billions of dollars from the Company’s market capitalization.