Inspire Medical (INSP) Sued Over Claims It Misled Investors on Next-Generation Device Launch
Did you invest in Inspire Medical Systems (INSP) between August 6, 2024, and August 4, 2025, and suffer significant financial losses? You might be affected by a recently filed securities class action lawsuit. This lawsuit alleges that Inspire Medical misled investors regarding the launch of its next-generation device, the Inspire V, leading to a sharp decline in the company’s stock price. On August 4, 2025, the company’s stock plummeted 32% in a single day, wiping out billions of dollars in market capitalization.
What is Inspire Medical and What Does It Do?
Inspire Medical Systems, Inc. (NYSE: INSP) is a medical technology company focused on developing and commercializing minimally invasive solutions for patients with obstructive sleep apnea (OSA). Their flagship product, the Inspire system, is an implantable neurostimulation device designed to improve respiration during sleep. The company’s newest device, Inspire V, was expected to be a significant advancement in OSA treatment.
The Allegations: A Disastrous Launch
The core of the lawsuit revolves around claims that Inspire Medical and certain of its top executives made false and/or misleading statements and failed to disclose critical operational failings that ultimately sabotaged the launch of Inspire V.
Specifically, the lawsuit alleges that Inspire Medical:
- Misled investors about the demand for Inspire V: The company allegedly assured the market that the transition to Inspire V would be seamless and successful, with strong demand. However, the lawsuit claims that demand was poor due to surplus inventory of the previous device (Inspire IV) already held by providers.
- Failed to take necessary steps for a successful launch: Despite assurances to the contrary, Inspire Medical allegedly failed to complete basic tasks essential for a successful launch, such as ensuring that treatment centers completed the necessary training, contracting, and onboarding criteria.
These alleged misrepresentations and omissions created a disconnect between the company’s public statements and the operational reality, leaving investors vulnerable to significant financial losses.
The Lawsuit: City of Pontiac Reestablished General Employees’ Retirement System v. Inspire Medical Systems, Inc.
The class action lawsuit, captioned City of Pontiac Reestablished General Employees’ Retirement System v. Inspire Medical Systems, Inc., No. 25-cv-04247 (D. Minn.), was filed in the United States District Court for the District of Minnesota. It alleges violations of the Securities Exchange Act of 1934, specifically Sections 10(b) and 20(a), which prohibit the use of manipulative and deceptive devices in connection with the purchase or sale of securities.
The lawsuit seeks to represent investors who purchased or acquired Inspire Medical common stock between August 6, 2024, and August 4, 2025 (the “Class Period”).
The Impact: A Stock Price Crash
The alleged scheme purportedly unraveled on August 4, 2025, when Inspire Medical publicly admitted that the Inspire V launch was facing an “elongated timeframe” due to a number of previously undisclosed headwinds. The company revealed that many centers had not completed the necessary training and onboarding criteria required prior to purchasing and implanting Inspire V.
This news sent shockwaves through the market, causing Inspire Medical’s stock price to plummet by over 32% on heavy trading volume. This dramatic decline triggered the investor class action lawsuit.
What This Means for Investors
If you purchased Inspire Medical Systems (INSP) stock between August 6, 2024, and August 4, 2025, you may be entitled to compensation for your financial losses.
Key Dates to Remember:
- Class Period: August 6, 2024 – August 4, 2025
- Lead Plaintiff Deadline: January 5, 2026
What is a Lead Plaintiff?
The Private Securities Litigation Reform Act of 1995 (PSLRA) allows any investor who purchased or acquired Inspire Medical common stock during the Class Period to seek appointment as lead plaintiff in the class action lawsuit. The lead plaintiff is a court-appointed representative for absent members of the Class.
What are your options?
- Do Nothing: You can remain an absent class member. If a settlement or judgment is reached in favor of the class, you may be entitled to a share of the recovery, but you will not have any control over the litigation.
- Seek Appointment as Lead Plaintiff: If you suffered substantial losses, you may wish to seek appointment as lead plaintiff. The lead plaintiff has the responsibility of representing the interests of the class and overseeing the litigation.
- Contact an Attorney: You can contact an attorney to discuss your rights and options. Many law firms specialize in securities class action litigation and offer free consultations.
Expert Stock Analysis
As of December 1, 2025, Inspire Medical has a market capitalization of $3.68 billion. The stock price stands at $124.41, a slight decrease from the previous session. The 52-week range has been volatile, between $72.08 and $215.42. Revenue growth is strong at 10.50%, and the company has a substantial free cash flow of over $74 million.
Analyst sentiment is mostly positive, with 10 buy ratings and 7 hold ratings. However, the average price target is $117.73, suggesting a potential downside from the current price.
Conclusion: A Call to Action
The lawsuit against Inspire Medical highlights the risks associated with investing in companies that may be making misleading statements about their products and prospects. If you have been affected by the alleged fraud, it is important to understand your rights and options. Consider consulting with a securities litigation attorney to discuss your potential recovery.