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Inspire Medical Systems Faces Legal Action Over Inspire V

Inspire Medical Systems, Inc. (NYSE: INSP) is now confronting significant legal challenges with a proposed class-action lawsuit tied to the disastrous launch of its new sleep apnea device, Inspire V. This lawsuit, spearheaded by prominent investor rights law firm Hagens Berman, claims that Inspire misled its investors regarding the readiness and anticipated demand for this critical product.

Background of the Lawsuit

The lawsuit is known as City of Pontiac Reestablished General Employees' Retirement System v. Inspire Medical Systems, Inc., and it seeks to represent individuals who purchased Inspire stock from August 6, 2024, to August 4, 2025. Legal experts note that the crux of the case lies in allegations that Inspire Medical made overly confident statements about the commercial prospects and regulatory readiness of the Inspire V device.

The firm asserts that these assurances starkly contrasted with the actual circumstances surrounding the device's rollout, which was marred by poor sales performance. Investors allege that they were kept in the dark about the substantial challenges that would later become apparent upon the product's market introduction.

Launch Disasters Uncovered

The lawsuit highlights that during the critical launch phase, Inspire Medical repeatedly communicated to the market that all necessary regulatory, technical, and commercial prerequisites had been met. They projected strong demand stemming from a successful commercial strategy. However, the reality was far different; initial demand for the Inspire V was disappointingly low. According to the allegations, many healthcare providers already had excess inventory of the older Inspire IV devices, contributing to the limited uptake of the new device.

Moreover, the lawsuit claims that Inspire Medical failed to implement fundamental operational steps necessary to facilitate the swift adoption of the Inspire V among clinicians and payors. An in-depth analysis of the launch revealed that crucial training and onboarding requirements were unmet at many medical centers, creating significant barriers to product adoption.

The Turning Point

On August 4, 2025, Inspire Medical issued a press release disclosing that the launch of the Inspire V had experienced a series of unforeseen delays and complications. They described an “elongated timeframe” for achieving adequate product uptake due to substantial headwinds that had not been previously communicated to investors. Inspire explained that many institutions had not completed requisite training or contractual agreements necessary before offering the new device to patients.

In addition, while Inspire V received the necessary Medicare reimbursement codes, administrative changes hampered billing for procedures until mid-July 2025, thereby causing many medical centers to prefer using the older iteration of the device instead. The result was a compounded need for medical facilities to reduce their existing Inspire IV stock before they would turn to the new version.

Market Reactions and Fallout

Following the grim outlook provided by Inspire Medical, the company slashed its earnings guidance for 2025 by an alarming 80%, forecasting earnings per share to drop to between $0.40 and $0.50. This shocking revelation led to a dramatic plummet in Inspire’s stock price, which fell by approximately 32%, translating to a loss of $42.04 per share the following day. Investors are now grappling with tremendous losses, prompting Hagens Berman to encourage those affected to detail their financial setbacks as part of the ongoing investigation.

Legal Investigation and Future Actions

Hagens Berman’s lead partner, Reed Kathrein, expressed concern over potential misrepresentations that may have misled investors about the headwinds impacting the Inspire V launch and how these factors negatively affected investor confidence and earnings potential. The firm is urging anyone who invested in Inspire and sustained significant losses, or those who have information relevant to the investigation, to come forward.

The legal landscape following this case underscores the importance of transparency and accountability in corporate communications, particularly in industries where public trust is paramount. As developments unfold, it remains to be seen how Inspire Medical Systems will navigate this turbulent period and the long-term repercussions of the Inspire V rollout.

For further information about the lawsuit and how to take part, visitors can reach out to Hagens Berman, or if they prefer more discretion, contact them via email or their official website.