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Inspire Medical Systems Faces a Securities Fraud Class Action

Inspire Medical Systems, Inc. (NYSE: INSP), renowned for its innovative medical solutions, is currently embroiled in a legal battle following a dramatic decline in its stock price, which plummeted to $42.04. This drop has ignited a securities fraud lawsuit led by the law firm Hagens Berman, which aims to hold the company accountable for its alleged operational and financial misrepresentations.

The Background of the Lawsuit

On December 19, 2025, Hagens Berman announced its alert to investors regarding the pending class action lawsuit against Inspire Medical. Shareholders who experienced significant losses during the class period of August 6, 2024, to August 4, 2025, are urged to reach out before the lead plaintiff deadline on January 5, 2026. The allegations against Inspire Medical center on claims of serious operational failures linked to the rollout of its next-generation device, Inspire V, intended for the treatment of obstructive sleep apnea.

Allegations of Concealment

The lawsuit contends that Inspire Medical and its executives misled investors by asserting their readiness for the Inspire V's commercial introduction. According to legal documents, the assurances provided were not only overly optimistic but also obscured several critical operational failures that made a successful launch realistically unattainable. Consequently, these misrepresentations resulted in a catastrophic downward revision of earnings guidance and a subsequent crash of the company’s stock price.

Key Issues Highlighted in the Complaint

1. Medicare Billing Readiness

One of the pivotal issues was the alleged delay in the necessary software updates for Medicare claims processing, which only became operational on July 1, 2025. As a result, implanting centers experienced a halt in billing for procedures, directly impacting early adoption and revenue generation.

2. Inventory Glut of Older Devices

Another critical challenge specified in the lawsuit was that many customers and treatment centers were left with a surplus of the older Inspire IV device. This situation not only hampered the demand for the new Inspire V product but also created a considerable barrier by requiring an extensive 'inventory burn down.'

3. Insufficient Training for Centers

Lastly, the complaint points out that a troubling number of treatment centers were not adequately trained to implant the new Inspire V device. This lack of preparation delayed its rollout, ultimately leading to a significant decline in stock value, evidenced by the $42.04 drop per share, representing a staggering 32.4% decrease in market value.

Hagens Berman's Investigation

Reed Kathrein, the leading partner at Hagens Berman overseeing the case, emphasizes that their investigation will focus on what they term the concealment regarding both the Medicare claims software issue and the inventory surplus of the previous device. He indicated that the company's management allegedly prioritized presenting a narrative of a smooth transition over the operational realities that were undoubtedly problematic.

Legal Options for Investors

For shareholders impacted by the stock drop, several legal routes may be available. Hagens Berman invites anyone who purchased Inspire Medical securities during the specified class period to come forward and discuss their legal rights. The firm also encourages whistleblowers possessing pertinent non-public information to consider engaging in the investigation, as they may qualify for rewards under the SEC’s Whistleblower program.

Conclusion

As Inspire Medical Systems braces for what could be a protracted legal battle, investors are left grappling with the implications of the company’s mismanagement and the resulting fallout. The upcoming lead plaintiff deadline on January 5, 2026, signifies a critical point for those seeking justice in light of their investment losses.

For more information or to report losses, investors can contact Hagens Berman directly at 844-916-0895 or via email. They can also visit Hagens Berman’s dedicated case page for further details and updates on the situation.