Inspire Medical Systems (NYSE: INSP) shares dipped — but have since mostly recovered — following news of a government investigation following fourth-quarter results.
As of midday today, INSP shares were up more than 2% to $185 apiece. (They were down more than 5% over the past five days.)
The company disclosed yesterday evening that on Jan. 17, 2025, it received a civil investigation demand from the DOJ for the District of Minnesota. It relates to allegations of false claims arising from violations of the Anti-Kickback Statute. The demand requests information related to the marketing, promotion and reimbursement practices associated with Inspire products.
“We are cooperating with the investigation,” the company’s annual report reads. “No assurance can be given as to the timing or outcome of the government’s investigation.”
Meanwhile, Inspire Medical had Street-beating Q4 results
The Minneapolis-based maker of implantable neuromodulation technology for treating sleep apnea reported profits of $35.2 million. That equals $1.15 per share on sales of $239.7 million for the three months ended Dec. 31, 2024.
Inspire Medical more than doubled its bottom line on a sales increase of 24.5%. The company’s earnings per share came in 43¢ ahead of expectations on Wall Street. Sales also topped the estimates as experts forecast $237.4 million in revenue.
Tim Herbert, Inspire chair and CEO, said in a news release that highlights in the quarter included progress toward the full launch of the next-generation Inspire V system, cleared by the FDA last year. Herbert also highlighted an optimized leadership team, improved profitability and a $75 million share repurchase program.
“We are thrilled with our strong performance in the fourth quarter, growing revenue 25% year-over-year, delivering nearly $32 million in operating income and increasing diluted net income per share 135% year-over-year,” said Tim Herbert, chair and CEO of Inspire Medical Systems. “We look forward to continuing our strong performance in 2025 aided by the launch of Inspire V.”
During the company’s earnings call with analysts yesterday evening, Herbert also said that Inspire expects to eventually see tailwinds from the FDA’s approval late last year of Eli Lilly’s GLP-1 drug Zepbound (tirzepatide) as the first and only prescription drug to treat sleep apnea. He expects GLP-1s to help some people with sleep apnea to lose enough weight to qualify for Inspire therapy.
Questions about GLP-1s have been a significant theme for sleep apnea treatment companies, including CPAP giant ResMed.
Inspire reaffirmed its previous full-year sales guidance for between $940 million and $955 million. That marks expected growth between 17% and 19% over full-year 2024 revenues that totaled $802.8 million. The company expects earnings per share for the year to range between $2.10 and $2.20.
This story initially ran on Feb. 10 and was updated on Feb. 11 with information about the DOJ investigation.
