Inspire Medical Systems offers the only obstructive sleep apnea (“OSA”) device that has been approved by the Food and Drug Administration (“FDA”) for treatment of the root cause of sleep apnea by working inside the body with the patient’s natural breathing process.  Inspire Medical Systems calls this treatment “Inspire therapy.”  In order to receive insurance coverage for Inspire therapy, patients are required to visit a doctor to secure prior authorization.  Inspire Medical Systems maintains an Advisor Care Program team to assist with this process, including the scheduling of appointments, which was historically handled through telephone calls with physician offices.  In 2022, Inspire Medical Systems introduced a pilot program (the “Acceleration Program”), through which Inspire Medical Systems’ Advisor Care Program team with the customer on the phone would directly access doctors’ electronic schedules and schedule doctor appointments online, without the need for phone calls.

A securities fraud class action complaint alleges that Inspire Medical misled investors and/or failed to disclose that: (1) despite the Acceleration Program, customers were encountering challenges with the prior authorization submission process, including with the scheduling of appointments; (2) a slowdown in prior authorization submissions arising from these challenges led to a shortfall of hundreds of procedures to implant the Company’s OSA device; and (3) as a result, Defendants’ positive statements about the Company’s financial guidance, business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.

It is alleged that investors only learned the truth on November 7, 2023 when Inspire Medical Systems announced disappointing earnings results for the third quarter of 2023, and revealed that it had started to “track” problems with the Acceleration Program in the second quarter of 2023, including a decrease in the number of prior authorization submissions for Inspire therapy, and “recogniz[ed] this trend early in the third quarter,” ­i.e., as early as July 1, 2023.  On this news, the price of Inspire Medical Systems’ stock fell by nearly 20%, according to the complaint.

Current Inspire Medical shareholders who have continuously held Inspire Medical shares since prior to May 3, 2023, can seek corporate reforms, the return of funds back to company coffers, and a court approved incentive award at no cost to them whatsoever.

If you would like to learn more about this matter, you are encouraged to contact Joshua H. Grabar at jgrabar@grabarlaw.com or Mia R. Heller at mheller@grabarlaw.com, or call 267-507-6085.