Core Viewpoint - Inspire Medical Systems has lowered its full-year revenue forecast for 2025, expecting sales to be between $900 million and $910 million, down from a previous estimate of $940 million to $955 million, with adjusted EPS projected between $0.40 and $0.50, significantly lower than the earlier forecast of $2.20 to $2.30 [2][3] Financial Performance - In Q2 2025, Inspire reported revenue of $217.1 million, a year-on-year increase of 10.8%, exceeding analyst expectations of $214.3 million. However, the company recorded a net loss of $3.6 million, a decline from a net profit of $9.8 million in the same period of 2024, primarily due to increased operating expenses and one-time costs [4] - Operating expenses for the quarter reached $185.7 million, a 15% increase year-on-year, while the gross margin was 84.0%, slightly down by 0.8 percentage points compared to the previous year [4] Inventory and Product Transition - As of June 30, the company's inventory stood at $121.6 million, up from $80.1 million at the end of the previous year, indicating transitional inventory pressure between Inspire IV and Inspire V [5] Product Development - Inspire Medical's core product, the Inspire neurostimulation system, is designed for treating moderate to severe obstructive sleep apnea (OSA) patients who cannot tolerate CPAP therapy. The system includes components that stimulate the hypoglossal nerve to prevent airway collapse during sleep [6][8] - Inspire V, the latest iteration of the product, received FDA approval in 2024 and has been launched in the U.S. However, market conversion has been slower than expected, impacting the company's financial performance [12] Legal and Competitive Challenges - The company incurred $1.7 million in legal expenses during the quarter, partly related to a civil investigation by the U.S. Department of Justice and a patent infringement lawsuit against competitor Nyxoah [13] - Inspire Medical emphasizes that these legal costs are temporary and do not reflect core operational performance. The company plans to enhance clinical data accumulation and improve market education to boost commercialization [15] Company Overview - Inspire Medical Systems, based in Minneapolis, Minnesota, focuses on OSA treatment and is the first company to achieve non-CPAP treatment through neurostimulation. Since product approval, over 100,000 patients have been treated globally [16] - The company has established over 1,435 implantation centers and 335 sales territories in the U.S. and has received regulatory approvals in Europe, Japan, and other regions. In 2024, the company reported annual revenue of $803 million, with a compound annual growth rate exceeding 60% [16] - Despite a slowdown in growth for 2025, the company remains focused on product conversion efficiency, international market expansion, and physician education to drive the penetration of Inspire V [16][17]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $217.1 million, an 11% increase from $195.9 million in Q2 2024 [24] - U.S. revenue was $207.2 million, a 10% increase from $187.8 million in the prior year [24] - Gross margin decreased to 84% from 84.8% year over year, primarily due to a $2.1 million charge for excess INSPIRE IV subcomponents [24] - Operating loss for the quarter was $3.3 million compared to an operating income of $5.1 million in the prior year [26] - Net loss for the quarter was $3.6 million, compared to a net income of $9.8 million in the prior year [26] - Adjusted EBITDA for the quarter was $44.1 million, a 14% increase compared to $38.7 million in the prior year [27] - Adjusted net income per share increased by 40% year over year to $0.45 [27] Business Line Data and Key Metrics Changes - The majority of units sold in Q2 were INSPIRE IVs, leading to minimal inventory destocking [10] - Over 50% of U.S. centers have completed the implementation of SleepSync, which is crucial for the transition to INSPIRE V [9] - The company is experiencing a 20% increase in patient implants at U.S. centers that have transitioned to INSPIRE V compared to the same period in 2024 [15] Market Data and Key Metrics Changes - Revenue outside the U.S. was $9.9 million, a 23% increase year over year [24] - The approval of CPT code 64568 for INSPIRE V for Medicare patients was announced in April, with billing starting on July 1 [11] - The national average Medicare hospital reimbursement for CPT code 64568 is proposed to increase to $32,000, a 4% increase from 2024 [17] Company Strategy and Development Direction - The company is focused on transitioning customers to INSPIRE V and has ramped up marketing and footprint expansion efforts in the second half of the year [12][13] - The company aims to drive high-quality patient flow and increase provider capacity through training and certification of additional surgeons [21] - The company has become a corporate champion of the American Academy of Otolaryngology, enhancing its brand and trust within the ENT community [18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the commercial rollout of INSPIRE V, including delays in training and implementation at centers [7] - The company adjusted its full-year revenue guidance to a range of $900 million to $910 million, reflecting a 4% reduction at the midpoint [14] - Management expressed confidence in overcoming current headwinds and achieving long-term growth [21] Other Important Information - The company ended the quarter with $411 million in cash and investments, allowing it to focus on executing growth strategies [28] - A personnel announcement was made regarding the retirement of Randy Bann, Executive Vice President, Patient Access and Therapy Awareness, in January 2026 [19][20] Q&A Session Summary Question: Can you provide more detail on the revised guidance and the headwinds faced? - Management identified the completion of training and the ability to bill Medicare as the primary factors affecting guidance [34][35] Question: What is the expectation for revenue growth in 2026? - Management expects revenue growth to exceed the 12% to 13% guidance for FY 2025 [37] Question: Can you clarify the EPS guide change? - The reduction in EPS guidance is primarily due to lower revenue expectations and increased marketing costs [41][42] Question: What is the status of the Q3 guidance? - Management anticipates a 1% to 3% sequential increase in Q3 revenue based on patient flow trends [46] Question: What are the underlying volume trends and pressures? - Management noted that the transition to INSPIRE V and the ability to bill Medicare are key factors affecting volume trends [54][55] Question: How is the company addressing the increase in accounts receivable? - The increase is attributed to a transition to a new billing service, which caused temporary delays in invoicing [77] Question: What is the outlook for the fourth quarter? - Management expects a seasonal increase in revenue from Q3 to Q4, consistent with historical trends [96]

Core Viewpoint - Tirzepatide, developed by Eli Lilly, is a dual agonist for GIP and GLP-1 receptors, recently approved by the FDA for weight loss under the brand name Zepbound™ and previously for type 2 diabetes as Mounjaro™. It is noted as the most effective weight loss drug currently available, having set multiple records in clinical trials for weight reduction [2]. Summary by Sections FDA Approval and Indications - Tirzepatide received FDA approval in November 2023 for weight loss and has also been approved for type 2 diabetes treatment. It has now gained a third indication for moderate to severe obstructive sleep apnea (OSA) in adults, as announced by the NMPA in China [2]. Clinical Trial Results - The SURMOUNT-OSA trial demonstrated that Tirzepatide significantly reduced the apnea-hypopnea index (AHI) and body weight in patients with moderate to severe OSA and obesity. In a 52-week treatment period, patients lost an average of 20% of their body weight, and AHI decreased by an average of 27 times per hour [2][7][11]. Efficacy Metrics - In the SURMOUNT-OSA study, patients treated with Tirzepatide experienced a 55% reduction in AHI compared to a 5% reduction in the placebo group. The average weight loss in the Tirzepatide group was 18.1%, while the placebo group saw only a 1.3% reduction [8][9]. Safety Profile - The overall safety of Tirzepatide in the SURMOUNT-OSA studies was consistent with previous trials, with gastrointestinal issues being the most commonly reported adverse events, generally mild to moderate in severity [12]. Market Potential - The success of the SURMOUNT-OSA trials indicates a significant advancement in addressing the unmet clinical need for OSA treatment, positioning Tirzepatide as a potential first pharmacological therapy for this condition [12]. Demographics of Study Participants - Approximately 70% of participants in the studies were male, with evidence suggesting that Tirzepatide may have a more pronounced weight loss effect in females [11].

Financial Data and Key Metrics Changes - The company ended the first quarter of 2025 with cash, cash equivalents, and investments of $343 million, compared to $198.2 million as of December 31, 2024, indicating a significant increase in liquidity [23] - R&D expenses for the quarter were $37.9 million, up from $30.8 million in the same quarter of 2024, primarily due to increased preclinical and clinical costs [24] - The net loss for the quarter was $42.2 million, compared to $31.5 million for the same period in 2024, reflecting higher expenses [25] Business Line Data and Key Metrics Changes - The pivotal trials for lorundrostat, including LAUNCH HTN and ADVANCE HTN, achieved statistically significant results in reducing systolic blood pressure in patients with uncontrolled and resistant hypertension [6][9] - The LAUNCH HTN trial demonstrated a placebo-adjusted reduction in systolic blood pressure of 9.1 mmHg at week six and maintained a reduction of 11.7 mmHg at week twelve [14] - The ADVANCE HTN trial showed a placebo-adjusted reduction of 7.9 mmHg in systolic blood pressure, confirming the efficacy of lorundrostat in a high-risk population [17] Market Data and Key Metrics Changes - A survey indicated that 95% of physicians are likely to prescribe lorundrostat if approved, particularly for third and fourth-line treatment of hypertension [9] - The company is targeting approximately 47,000 physicians who account for a significant portion of prescriptions for uncontrolled and resistant hypertension [49] Company Strategy and Development Direction - The company aims to submit a New Drug Application (NDA) for lorundrostat, incorporating data from multiple pivotal trials, including the ongoing EXPLORER CKD trial [9][35] - The appointment of Eric Warren as Chief Commercial Officer is part of the strategy to prepare for potential FDA approval and to enhance commercial efforts [11] - The company is exploring the use of lorundrostat in treating comorbid conditions such as obstructive sleep apnea and hypertensive nephropathy, indicating a broader strategic focus [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the clinical profile of lorundrostat and its potential to address significant unmet medical needs in hypertension [9][93] - The company plans to engage with the FDA in a pre-NDA meeting in Q4 2025 to discuss the path forward for lorundrostat's approval [9] - Management highlighted the importance of the benefit-risk profile of lorundrostat, especially in populations with advanced kidney disease [28] Other Important Information - The company completed a public equity financing that raised approximately $201.2 million, strengthening its balance sheet [12] - The EXPLORER CKD trial is designed to evaluate the safety and efficacy of lorundrostat in patients with chronic kidney disease, which is a critical area of focus for the company [19] Q&A Session Summary Question: What would be the max level of grade two hyperkalemia that would be acceptable if lorundestat yields a high single-digit placebo-adjusted SBP reduction? - Management indicated that specialists are more comfortable with higher potassium levels if there is a significant benefit in blood pressure and kidney function [28] Question: Do you expect similar efficacy and safety with lorundestat as seen with other treatments? - Management anticipates clinically meaningful reductions in blood pressure based on previous studies, but specifics are too early to determine [30] Question: How does the EXPLORER CKD study fit into the strategy for regulatory submission? - The EXPLORER CKD study will be part of the NDA submission, providing clinical support for patients with lower eGFR [35] Question: What are the gating factors to finalizing and filing the NDA? - Key factors include the completion of the open-label extension study and the collection of sufficient data to support the NDA submission [53] Question: Can you discuss any early discussions with potential partners? - Management has not provided updates on partnering discussions but believes that partnerships will be part of the company's strategy moving forward [60] Question: What are the primary objectives for the EXPLORER CKD study? - The primary focus is on safety and clinically meaningful reductions in blood pressure in the CKD population [70] Question: What is the expected timeline for hypertension guidelines to include data from the LAUNCH and ADVANCE HTN studies? - Management noted that it is too early to predict when guidelines will be updated but emphasized the importance of the data for informing treatment paradigms [68]

Financial Data and Key Metrics Changes - The company recorded deferred revenue of €600,000 in Q4 2024, with recognized revenue of €1.3 million for the quarter and €4.5 million for the full year 2024 [27] - Total operating loss for Q4 2024 was €18.3 million, compared to €10.8 million in Q4 2023, driven by increased R&D spending and commercial investments [28] - Cash position improved to €85.6 million at the end of 2024, up from €57.7 million at the end of 2023, aided by a €24.6 million equity raise [28] Business Line Data and Key Metrics Changes - Revenue for Q4 2024 would have been €1.9 million excluding the impact of deferred revenue, representing a 46% sequential growth over Q3 2024 [23] - Full-year revenue was €5.1 million, an 18% increase over 2023 [23] Market Data and Key Metrics Changes - The company launched Genio in the UK and UAE, with the UK expected to become a significant market due to NHS coverage [24][25] - The first successful implant in the UK generated excitement, and the company plans to expand into more hospitals [25] Company Strategy and Development Direction - The company aims to launch Genio in the U.S. by the end of March 2025, focusing on high-volume HGNS implanting centers and building referral networks with sleep physicians [17][18] - A two-pronged strategy will be employed for market penetration, targeting both existing HGNS centers and developing new referral networks [19][32] - The company plans to utilize CPT code 64568 for reimbursement, which is recognized by commercial and government payers for OSA indication [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in receiving FDA approval by the end of March 2025, citing ongoing positive interactions with the FDA [31][50] - The company is focused on establishing competitive pricing and strong referral networks to drive adoption of Genio in the U.S. market [31][32] - Management highlighted the importance of real-world data collection post-launch to support clinical and economic justification of the technology [70] Other Important Information - The DREAM study showed a strong AHI responder rate of 63.5% and an ODI responder rate of 71.3%, with a median AHI reduction of 70.8% [8][11] - Genio demonstrated a favorable safety profile with an 8.7% severe adverse event rate [14] Q&A Session Summary Question: Update on reimbursement and CPT code 64568 - Management acknowledged that while the reimbursement level may not be overly attractive, having a recognized CPT code is crucial for market entry [37] Question: Trajectory of U.S. launch and new account openings - Management indicated that they will focus on training physicians and expanding into high-volume HGNS accounts, aiming to cover all Tier 1 accounts within 12 to 18 months [44] Question: Confidence in FDA approval timeline - Management remains confident in the approval timeline, citing a 90-day review clock that aligns with their expectations for a March approval [50] Question: Manufacturing and supply chain readiness - Management confirmed that they have sufficient manufacturing capacity and inventory for the U.S. market, with products being manufactured domestically [64] Question: Need for real-world data post-approval - Management plans to collect real-world data as part of their post-market study to support the technology's clinical and economic justification [70]