ReportDate:April22,2020Company:InspireMedicalSystems,Inc.Ticker:INSPUSIndustry:MedicalDevicesStockPrice(USD):$69.68MarketCap(USD,Millions):$1,840.1Page1of57InspireMedicalSystems:ANightmareInvestmentIntroductionWolfpackisshortInspireMedicalSystems(INSP).Theannualmarketopportunitypromotedbyitsmanagementissopreposterousthatitmustbedisingenuous,leavinginvestorsholdingthebagofthisterminallyunprofitablebusiness.ItturnsoutthatInspirecanbarelyevengivetheirdeviceaway:Ithasbeenavailableto~9millionenrolledU.S.Veteransforfreesince2014,butdatafromtheVAhospitalsystemshowonly387totalpatientshaveoptedforInspire’ssurgery.OurresearchshowsInspirecan’tevensell20,000unitsinayear,muchlessthe500,000unitsclaimedbymanagement.Inspire’ssurgicallyimplanteddevicecomeswithalonglistofonerouslifestylerestrictionsandinsufferableside-effectsthatpermanentlyhauntpastpatientsanddriveoffpotentialpatients.Insidershavepocketedmorethan$340millionfromstocksales,nearly3xthecompany’stotalrevenuesincethe2018IPO.Inspireisonlygoodatsellingtwothings:thisridiculousgrowthstoryandtheirstock.SummaryInspire’sdeviceisfartooinvasiveandrestrictivetoevergaintractioninamarketwithnumerousnon-invasivealternatives.Inspirepromotesitselfasaminimally-invasiveandmoreconvenientsolutionforObstructiveSleepApnea(“OSA”).WefoundthatInspire’ssurgeryisanythingbutminimally-invasive.Itcarriesseriousriskssuchaslacerationofthejugular,paralysisandleaveslargevisiblescarsonthepatient’sneckandchest.Further,Inspire’sdevicerequiresadditionalsurgeriestoreplacethebatteryevery7-10yearsfortherestofyourlife,whichisashitsandwichin-and-ofitself.Intheyearsbetweenthesesurgeries,Inspire’sdevicecancauseseriousinjuryifthepatienthasapacemaker,undergoesanMRI,orrequiresdefibrillationduringacardiacevent.1AllInspirepatientshavetolivewithanightmarishlistofrestrictionsthatmakeInspire’s“therapy”asinconvenientaswecouldpossiblyimagine.Theymustworryabouteverydayactivitieslikeansweringtheircellphone,usingacomputerorpowertools,goingtothestoreandgoingthrou...
