INSP - Inspire Medical Systems, Inc.

Inspire Medical Systems develops and commercializes the Inspire upper airway stimulation (UAS) system, an implantable neurostimulation device that treats moderate-to-severe obstructive sleep apnea by stimulating the hypoglossal nerve to keep the airway open during sleep. The business model is direct sales to hospitals and surgical centers, with revenue driven by per-procedure implant sales to sleep medicine and ENT physicians who implant the device in patients who have failed CPAP therapy. Annual revenue is approximately $800M–$900M, primarily generated in the United States with a growing but smaller international presence in Europe and select Asia-Pacific markets.

Past Year Trends

• Full year 2025 revenue grew 14% YoY to $912.0M, but Medicare contractors Noridian and CGS unexpectedly removed CPT code 64568 for hypoglossal nerve stimulation in December 2025, triggering an approximately 30% stock decline and forcing the company to manage severe reimbursement disruption heading into 2026. (Bearish)
• Inspire V received FDA approval and completed its full U.S. commercial launch in 2025 — the company's largest product launch in its history — delivering up to 30% reduction in OR time, though treatment-center onboarding delays slowed adoption and caused management to revise its 2025 revenue outlook downward to $900–$910M before finishing at $912M. (Neutral)
• Eli Lilly's Zepbound, FDA-approved specifically for obstructive sleep apnea treatment, emerged as a direct competitive headwind in 2025, pressuring the long-term growth narrative for implantable neurostimulation devices and becoming a recurring risk factor raised by analysts throughout the year. (Bearish)

Next Year Trends

• The final determination of the professional fee reimbursement level for Inspire procedures under the new CMS coding regime remains unresolved as of mid-2026, and management has explicitly stated that a significant reduction could limit physician participation especially among private practices, representing the single largest variable in the company's $1.003B–$1.013B 2026 revenue guidance. (Bearish)
• CMS confirmed new HCPCS C-codes for Inspire V in the April 2026 outpatient code editor update, resolving the immediate coding ambiguity that triggered the December 2025 stock crash, and INSP's 2026 guidance range of $1.003B–$1.013B explicitly excludes any upside from improved reimbursement, meaning a favorable professional fee ruling could provide material beat potential above consensus. (Bullish)
• Inspire 6, featuring automated sleep detection technology, is in active development as the company's next product cycle catalyst, with no publicly confirmed FDA submission timeline as of Q1 2026, representing a potential multi-year commercial driver contingent on regulatory clearance timing. (Bullish)

Red Flags

[Securities Fraud / Investigation] Inspire Medical Systems received a Civil Investigative Demand from the DOJ alleging false claims submitted to government payers in connection with its sleep apnea implant marketing, including potential Anti-Kickback Statute violations. — MedTech Dive / Star Tribune, January 2025

[Securities Fraud / Investigation] A federal securities class action filed in the U.S. District Court for the District of Minnesota alleges that Inspire Medical Systems and executives (CEO Timothy Herbert, CFO Richard Buchholz, CSO Carlton Weatherby) concealed Medicare billing software failures and an Inspire IV inventory glut during the Inspire V device launch, causing a $42.04 per-share stock drop; class period August 6, 2024 – August 4, 2025. — Multiple law firm filings via PR Newswire / ZLK, August–November 2025