Investors Target Inspire Medical Systems Over Troubling Inspire V Device Launch Issues

Inspire Medical Systems, Inc. (NYSE: INSP) finds itself embroiled in a proposed class-action lawsuit that raises serious allegations about the company's communications surrounding the launch of its next-generation sleep apnea device, the Inspire V. The legal challenge, spearheaded by prominent investor rights firm Hagens Berman, comes in light of claims that Inspire misled investors regarding the device's market readiness and demand during the critical launch period.

The Allegations

The lawsuit, formally known as "City of Pontiac Reestablished General Employees' Retirement System v. Inspire Medical Systems, Inc., et al.," targets all investors who acquired Inspire common stock between August 6, 2024, and August 4, 2025. It centers on assertions that Inspire repeatedly assured its shareholders that it had met all necessary regulatory and commercial benchmarks for the Inspire V device's launch. These claims of readiness, however, contrast markedly with the company's actual performance and subsequent stock decline, which left many investors in the lurch.

According to the allegations, the commercial release of the Inspire V encountered severe challenges, primarily stemming from significantly lower-than-expected initial demand. A serious contributing factor was an existing surplus of the prior model, the Inspire IV, which led many clinician practices to delay adopting the newer device. Furthermore, it appears that Inspire failed to take essential preparatory steps to guarantee a smooth transition and uptake of the Inspire V among medical professionals and insurers alike.

The Troubling Impact on Investors

The situation escalated dramatically on August 4, 2025, when Inspire disclosed that the launch faced unexpected delays. They attributed these obstacles to several factors, including the fact that numerous medical centers had not fulfilled the training and contractual requirements crucial for adopting Inspire V. Compounding this was the announcement that while the device had received its CPT code approval for billing Medicare patients, necessary software updates for processing claims were only effective from July 1, resulting in confusion and further delays in billing for these new procedures.

In light of these revelations, Inspire’s ability to market and sell the Inspire V came under intense scrutiny. The company indicated that many clinicians preferred to continue treating patients with the older Inspire IV, resulting in a backlog that hindered the effectiveness of the new product's rollout. The ramifications were severe; in response to the disastrous launch, Inspire slashed its earnings projections for 2025 by an astonishing 80%, estimating earnings per share to fall between $0.40 and $0.50.

Following this announcement, the response from the market was immediate and harsh, with Inspire shares plummeting by approximately 32%, leading to a loss of $42.04 per share the day after the disclosure hit the news.

Ongoing Legal Considerations

Law firm Hagens Berman is leading the charge in holding Inspire accountable and aims to uncover whether the company deliberately misled investors about the headwinds impacting the product launch. Reed Kathrein, a partner in the firm, emphasized the focus on verifying investor claims of losses and whether appropriate disclosure procedures were followed prior to the launch.

With a lead plaintiff deadline set for January 5, 2026, aggrieved investors are encouraged to step forward and share their experiences. The firm has opened channels for those who believe they might possess non-public information about Inspire's performance to contribute to the ongoing investigation, thus allowing potential whistleblowers the opportunity to assist in ensuring accountability and transparency.

In addition to the actions related to the Inspire V launch, Hagens Berman has been active in advocating for corporate accountability in various sectors, securing over $2.9 billion on behalf of clients harmed by corporate malpractice. Investors seeking justice for their losses may find a voice through the firm during this challenging time for Inspire Medical Systems.

As the legal proceedings unfold, they will surely be closely monitored by both the investing community and industry observers interested in corporate governance and product management practices. The outcomes may serve as an important precedent for investor lawsuits surrounding medical technology companies in the future.