Saxena White PA has launched a class action lawsuit accusing Inspire Medical Systems Inc and certain executives of securities fraud, alleging that the company provided misleading information about its Acceleration Program, leading to significant investor losses.
According to the lawsuit, in 2022, Inspire introduced a pilot program, the Acceleration Program, through which the company’s 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.
The lawsuit states that, throughout the class period, Inspire “touted the Acceleration Program’s effectiveness,” claiming that the program had achieved a “30% improvement in physician appointments” and that, by August 2023, “about 60-plus centers are using the tool right now.”
The lawsuit alleges that Inspire 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 obstructive sleep apnea device; and (3) as a result, Inspire’s 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.
“The truth emerged after the close of markets on Nov 7, 2023, when the company announced disappointing earnings results for the third quarter of 2023, including ‘a decline in prior authorization submissions for patients seeking Inspire therapy,’” according to a release from Saxena White PA. “Inspire Medical further admitted it had started to ‘track’ problems with the Acceleration Program no later than the second quarter of 2023, the company ‘had strong confirmation’ of the problems with the Acceleration Program, and the company ‘realized we needed to take some corrective action.’ In response to this news, shares of Inspire Medical declined approximately 20%, from a closing price of $161.74 per share on Nov 7, 2023, to a closing price of $129.95 per share on Nov 8, 2023.”
In response to the allegations, Inspire issued a statement to Sleep Review, stating, “We are aware of the lawsuit filed against Inspire alleging securities fraud. We intend to vigorously defend ourselves in this matter.” The company further adds, “Because this is an active litigation matter, we have no additional comments.”
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