Inspire Medical Systems Faces Securities Fraud Lawsuit After Stock Plunge and Allegations of Concealed Software Issues

Inspire Medical Systems: A Looming Securities Fraud Case

In the wake of a significant stock drop to $42.04, Inspire Medical Systems, Inc. (NYSE: INSP) finds itself embroiled in a serious securities fraud lawsuit. Led by investor rights law firm Hagens Berman, this class action alleges that the company concealed crucial operational failures that could have materially impacted investors’ decisions.

The Background of the Lawsuit

The lawsuit centers on Inspire's introduction of its next-generation device, known as Inspire V, which was aimed at treating obstructive sleep apnea. Investors are being urged to step forward, particularly those who suffered losses between August 6, 2024, and August 4, 2025, with the lead plaintiff deadline set for January 5, 2026. The case is currently pending in the U.S. District Court for the District of Minnesota.

Hagens Berman states that Inspire Management misled investors by maintaining a facade of operational readiness, implying that they were prepared to fully roll out the Inspire V device. However, internal issues and failing operations, which were not disclosed to the public, ultimately resulted in a massive stock price collapse.

Key Allegations

The securities class action outlines several crucial points that were allegedly concealed:

1. Medicare Billing Readiness: The software necessary for processing Medicare claims was not functional until July 1, 2025. Consequently, many treatment centers were unable to bill for procedures, significantly hampering the early adoption of the Inspire V device.

2. Excess Inventory: Many customers continued to hold substantial stocks of the older Inspire IV device, which severely limited demand for Inspire V. This “inventory burn down” meant that sales for the new device could not keep pace with expectations, leading Inspire to slash its earnings forecast for 2025 by over 80%.

3. Lack of Training: A sizeable number of treatment centers had either not completed or were delayed in completing the necessary training for the new device's implantations, which stunted deployment rates.

As a result of these alleged undisclosed issues, Inspire's stock took a sharp 32.4% decline following a major reassessment of guidance, which has prompted the current legal actions.

Investor Support and Resources

Hagens Berman’s focus rests on these concealed facts, as the firm’s partner Reed Kathrein states, “The priority seemed to lie in maintaining a narrative of seamless operation rather than confronting the harsh operational realities.” This lack of transparency left many investors in a precarious position, increasingly concerned over their financial commitments to Inspire.

For those investors who held Inspire Medical securities during the class period, there are legal options available. The firm encourages affected individuals to reach out for guidance on how to proceed, especially facing the upcoming lead plaintiff deadline.

Contact Information for Affected Investors

For more details, investors are encouraged to contact Hagens Berman’s Reed Kathrein at 844-916-0895 or send an email to [email protected]. Those who have pertinent information related to the case may also contribute to the ongoing investigation.

Additionally, individuals possessing non-public information about Inspire Medical are prompted to explore the SEC Whistleblower program, where they may qualify for rewards of up to 30% of any successful recovery made by the SEC.

Conclusion

The situation surrounding Inspire Medical Systems represents another high-profile example of corporate accountability and investor rights. With allegations now surfacing about concealed operational failures and the resulting impacts on stock valuation, it becomes ever more critical for investors to stay informed and take appropriate actions to protect their interests.