Inspire(INSP) - 2025 Q4 - Annual Report

Therapy Effectiveness - Inspire therapy demonstrated a 70% reduction in median apnea-hypopnea index (AHI) from 29.3 events per hour to 9.0 events per hour at 12 months post-treatment[22] - At five years, median AHI remained low at 6.2 events per hour, indicating sustained effectiveness of Inspire therapy[22] - Inspire therapy achieved a median AHI reduction from 29.3 events per hour to 9.0 events per hour at 12 months post-treatment, with a five-year follow-up showing a median AHI of 6.2 events per hour[39] - Inspire therapy is indicated for patients with moderate to severe OSA (AHI of 15 to 100) who have failed or cannot tolerate CPAP treatments[42] - Inspire therapy has shown an 80% nightly usage rate among patients five years post-treatment, indicating strong patient compliance[39] - In a long-term follow-up study, 88% of adolescents with Down syndrome demonstrated a 50% reduction in AHI after an average of four years, with an overall average decrease of 60%[53] - Patients aged over 50 years using Inspire therapy experienced a reduction in average AHI from 31 to 14, along with significant improvements in various life domains measured by PROMIS surveys[54] Patient Compliance and Satisfaction - 80% of patients reported continued nightly use of Inspire therapy through five years from initial treatment, showcasing high patient compliance[26] - The ADHERE patient registry reported that patients used Inspire therapy an average of 5.7 hours per night, with 90% overall satisfaction and 91% of patients preferring it over CPAP[49] Market Presence and Expansion - Inspire therapy has been implanted in over 125,000 patients, establishing a significant first mover advantage in the market[28] - The company achieved target enrollment of 5,000 patients in the global real-world patient registry (ADHERE) in 2024, with follow-up completed in 2025[23] - Positive coverage policies have been secured with major U.S. commercial payors, covering over 300 million lives[25] - The Inspire system is marketed in 295 sales territories in the U.S. and 21 territories outside the U.S. as of December 31, 2025[24] - The company plans to expand its presence in international markets, focusing on Europe and the Asia Pacific region, including Japan and South Korea[31] - Inspire has established 295 U.S. sales territories and 275 U.S. field clinical representatives as of December 31, 2025, compared to 335 territories and 230 representatives in 2024[57] Regulatory Approvals and Compliance - The Inspire neurostimulator received FDA approval in 2024 and began marketing in the U.S. in 2025, enhancing the product portfolio[29] - Inspire therapy received FDA approval in 2023 to expand indications for pediatric patients with Down syndrome and increased the upper limit of AHI from 65 to 100 events per hour[31] - The company is pursuing regulatory approval in Korea and expanding commercial activities in Europe, focusing on reimbursement pathways[63] - The FDA's Breakthrough Devices Program aims to expedite the development and review of medical devices that provide more effective treatment for life-threatening conditions, allowing for more timely access to qualifying devices[110] - The company is subject to extensive FDA regulations, requiring premarket clearance or approval for its Class III medical devices[98] Intellectual Property - The company has a comprehensive intellectual property portfolio with 119 issued U.S. patents and 83 issued foreign patents as of December 31, 2025[29] - As of December 31, 2025, the company holds rights to 119 issued U.S. patents and 73 pending U.S. patent applications, with patents expiring between 2029 and 2043[87] - The company has entered into a license agreement with Medtronic, granting it a worldwide, royalty-free license for certain patents related to OSA treatment[91] - The company is involved in multiple adversarial proceedings with Nyxoah regarding its patent portfolio[88] Competition - The company faces competition from PAP therapies, with specific competitors including ResMed Inc., Philips BV, and Fisher & Paykel Healthcare Corporation Limited[81] - The company has one direct neurostimulation competitor in the US, Nyxoah SA, which offers a different device for OSA treatment[81] Financial and Operational Insights - The company has experienced supply disruptions related to polyurethane-based stimulation leads, impacting revenue during the third quarter of 2023 and into the first half of 2024, but the issue has since been resolved[95] - The company relies on third-party suppliers for manufacturing, which helps reduce capital investment and operational expenses[92] - The company anticipates future healthcare reform measures that may adversely affect its business operations[100] - A hypothetical 1% change in interest rates would have impacted interest and dividend income by approximately $3.8 million and $3.6 million for the years ended December 31, 2025 and 2024, respectively[452] - As of December 31, 2025, no single customer represented more than 10% of the company's accounts receivable, indicating a broad diversification of the customer base[456] Workforce and Corporate Culture - As of December 31, 2025, the company had 1,333 employees, with a 7% increase in workforce during 2025 to support business growth[148] - 52% of the U.S. workforce identified as female, and 15% identified as a member of a minority racial group[149] - The company maintains a flexible time off policy, allowing employees to take time off as needed without accruing a specific amount of paid time off each year[153] - The company completed a pay equity analysis in 2025 and plans to continue regular reviews of pay equity[152] - The company offers reimbursement for tuition and related expenses up to $10,000 per calendar year[159] - The company has implemented a leadership development pathway to support the growth of high performers and strengthen coaching capabilities[160] - The company has established an anonymous hotline for employees to report concerns regarding violations of the Code of Conduct[150] - The company has a strong internal referral network and encourages internal job movement opportunities for employee development[155] - The company participates in annual talent review and succession planning exercises to identify organizational needs and potential future leaders[161] Corporate Social Responsibility - In 2025, the company contributed nearly $175,000 to local and national charitable organizations, including healthcare charities[164] - The company has implemented a corporate sustainability program and published its fourth Sustainability Report in 2025[165]