Inspire Medical Systems (INSP) risk factors, FY2025 10-K

Inspire Medical Systems's FY2025 10-K, filed Feb 13, 2026, lists 59 risk factors in 4 groups. Against the prior year's 59: 9 new, 9 dropped, 20 substantially reworded.

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Risk factors listed
594 groups
New this year
9vs 59 last year
Dropped
9since the prior 10-K
Substantially reworded
20of those kept
Section length
29k wordsItem 1A

What the changes say

  • Inspire Medical added risks regarding pharmaceutical competition from Apnimed and new AI and tax rules.

What changed since the prior 10-K

New

  • NewRisks Related to Our Business

    reducing the BMI of our prospective patients and increasing the number of eligible patients for our Inspire therapy, there can be no assurance of such benefit

    Apnimed's drug candidate is in Phase 3 trials, creating potential new pharmaceutical competition for our Inspire therapy.

  • NewRisks Related to Our Business

    to allocate sufficient capacity in order to meet our increased requirements, which could have an adverse effect on our ability to meet customer demand for our Inspire system and our results of operations

    Maintaining higher inventory levels to avoid supply disruptions risks obsolescence and expiration charges.

  • NewRisks Related to Our Business

    Fluctuations in our tax obligations and effective tax rate and realization of our net deferred tax assets may result in volatility of our operating results and materially impact our financial condition or financial results

    Our effective tax rate may experience ongoing variability and volatility starting in fiscal year 2026.

  • NewRisks Related to Government Regulation

    subcontractors. Our products are also subject to similar state regulations and various laws and regulations of foreign countries governing manufacturing

    Third-party manufacturers may fail to comply with regulations, leading to product delays, warning letters, or seizures.

  • NewRisks Related to Government Regulation

    have been used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI

    We face heightened scrutiny from the FTC and state Attorneys General regarding consumer data protection and PHI.

  • NewRisks Related to Government Regulation

    Our business may be affected by the evolving regulatory framework for AI Technologies

    Evolving federal and state regulatory frameworks for artificial intelligence and automated decision-making technologies may restrict our operations.

  • NewRisks Related to Government Regulation

    Current and future healthcare reform legislation or regulation may increase the difficulty and cost for us to commercialize our products and could harm our business, financial condition and results of operations

    Healthcare reform legislation and the Affordable Care Act may create downward pricing pressure and rigorous coverage criteria.

  • NewRisks Related to Government Regulation

    employee headcount and costs associated with U.S. administrative agencies, including the FDA, and it remains unclear the degree to which these efforts may limit or otherwise adversely affect such agencies’ ability to conduct routine activities

    EU notified bodies face review delays and backlogs under the EU Medical Devices Regulation.

  • NewRisks Related to Intellectual Property Matters

    tribunal for challenging patents could increase the likelihood that our own patents will be challenged, thereby increasing the uncertainties and costs of maintaining and enforcing them

    The European Unified Patent Court allows competitors to centrally revoke our patents and obtain pan-European injunctions.

Dropped

  • DroppedRisks Related to Our Business

    without merit, may also result in settlements, injunctions or damages that could have a material adverse effect on our business, financial condition and results of operations

  • DroppedRisks Related to Our Business

    we may lose sales, experience manufacturing or other delays, incur increased costs or otherwise experience impairment to our customer relationships. We cannot guarantee that we will be able to establish alternative relationships on similar terms, without delay or at all

  • DroppedRisks Related to Our Business

    when considering the use of our products, either of which could have a material adverse effect on our business, financial condition and results of operations

  • DroppedRisks Related to Government Regulation

    Modifications to our products may require us to obtain new PMAs or approvals of a PMA supplement or certification, and if we market modified products without obtaining necessary approvals or certifications, we may be required to cease marketing or recall the modified products until required approvals are obtained

  • DroppedRisks Related to Government Regulation

    authority or certified by a notified body, may not effectively treat such conditions, which could harm our reputation in the marketplace among physicians and patients

  • DroppedRisks Related to Government Regulation

    devices, we may face additional regulatory enforcement action, including FDA or foreign regulatory authority warning letters, product seizure, injunctions, administrative penalties or civil or criminal fines

  • DroppedRisks Related to Government Regulation

    are subject to or affected by new and/or existing privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition

    Received a DOJ civil investigative demand regarding False Claims Act and Anti-Kickback Statute allegations.

  • DroppedRisks Related to Government Regulation

    Healthcare policy changes, including recently enacted legislation reforming the U.S. healthcare system, could harm our business, financial condition and results of operations

  • DroppedRisks Related to Our Common Stock

    The market price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our common stock

Reworded

  • 86% rewrittenRisks Related to Government Regulation

    Any of these actions could significantly and negatively affect supply of our products. If any of these events occur, our reputation could be harmed, we could be exposed to product liability claims and we could lose customers and experience reduced sales and increased costs

    Added explicit references to product liability claims, customer loss, reduced sales, and increased costs resulting from regulatory actions.

  • 84% rewrittenRisks Related to Our Business

    We are involved, and may become involved in the future, in disputes and other legal or regulatory proceedings that, if adversely decided or settled, could materially and adversely affect our business, financial condition, and results of operations

    Added data privacy claims to the list of potential legal and regulatory disputes.

  • 72% rewrittenRisks Related to Government Regulation

    Our products must be manufactured in accordance with foreign, federal and state regulations, and we or any of our suppliers or third-party manufacturers could be forced to recall our installed systems or terminate production if we fail to comply with these regulations

    Updated from FDA Quality System Regulation to Quality Management System Regulation incorporating ISO 13485.

  • 62% rewrittenRisks Related to Government Regulation

    The timing of FDA approval of a next generation product could have a significant impact on the carrying value of the inventory of our previous generation product, and therefore our results of operations

    Updated EU Medical Devices Regulation transition provisions and conformity assessment requirements.

  • 53% rewrittenRisks Related to Our Business

    We rely on a limited number of third-party suppliers and contract manufacturers for the manufacture and assembly of our products, and a loss or degradation in performance of these suppliers and contract manufacturers could have a material adverse effect on our business, financial condition, and results of operations

    Clarified third-party manufacturer and sole supplier dependencies for the Inspire system.

  • 49% rewrittenRisks Related to Our Business

    We currently compete and will in the future continue to compete against other companies, some of which have longer operating histories, more established products or greater resources than we do, which may prevent us from achieving increased market penetration and improved operating results

    Refined description of second-line therapy status for moderate to severe OSA.

  • 47% rewrittenRisks Related to Our Business

    Our ability to use our net operating losses and research and development credit carryforwards to offset future taxable income may be subject to certain limitations

    Updated ownership change analysis reference date from December 31, 2023 to December 31, 2024.

  • 47% rewrittenRisks Related to Our Business

    Failure of a key information technology system, process or site, cyberattacks, or other deficiencies in our cybersecurity could have an adverse effect on our business and operations

    Expanded IT risk scope to include operational technology environments and sensitive patient data.

  • 43% rewrittenRisks Related to Intellectual Property Matters

    Changes in U.S. and foreign patent laws may limit our ability to obtain, defend and/or enforce our patents

  • 43% rewrittenRisks Related to Government Regulation

    Legislative or regulatory reforms in the U.S. or the EU may make it more difficult and costly for us to obtain regulatory clearances, approvals or certification for our products or to manufacture, market or distribute our products after clearance, approval or certification is obtained

  • 41% rewrittenRisks Related to Our Business

    Our results of operations could be materially harmed if we are unable to accurately forecast customer demand for our Inspire system and manage our inventory

  • 40% rewrittenRisks Related to Our Business

    Our financial results and the market price of our common stock may fluctuate significantly and may not fully reflect the underlying performance of our business

    Was: Our financial results may fluctuate significantly and may not fully reflect the underlying performance of our business

  • 35% rewrittenRisks Related to Our Common Stock

    Changes in U.S. and foreign tax laws could have a material adverse effect on our business, cash flow, results of operations and financial condition

  • 33% rewrittenRisks Related to Our Business

    To successfully market and sell our Inspire system in markets outside of the U.S., we must address many international business risks

  • 32% rewrittenRisks Related to Our Business

    We may not be able to sustain profitability, we have historically incurred significant operating losses, and we may incur operating losses in the future

    Was: We have historically incurred significant operating losses, we may incur operating losses in the future, and we may not be able to sustain profitability

  • 28% rewrittenRisks Related to Our Business

    We face the risk of product liability claims that could be expensive, divert management’s attention and harm our reputation and business. We may not be able to maintain adequate product liability insurance

  • 27% rewrittenRisks Related to Our Business

    If we are unable to achieve and maintain adequate levels of coverage or reimbursement for our Inspire system, or any future products we may seek to commercialize, our business, financial condition or results of operations may be adversely affected

    Was: If we are unable to achieve and maintain adequate levels of coverage or reimbursement for our Inspire system, or any future products we may seek to commercialize, our commercial success may be severely hindered

  • 26% rewrittenRisks Related to Intellectual Property Matters

    Litigation or other proceedings or third-party claims of intellectual property infringement could require us to spend significant time and money and could prevent us from selling our products or affect our stock price

  • 23% rewrittenRisks Related to Our Business

    We bear the risk of warranty claims on our Inspire system

  • 22% rewrittenRisks Related to Our Business

    The evolving focus on sustainability and environmental, social, and governance initiatives from regulators and stakeholders could increase our costs, expose us to new risks, harm our reputation and adversely impact our financial results

    Was: The increasing and evolving focus on sustainability and environmental, social, and governance initiatives from regulators and stakeholders could increase our costs, expose us to new risks, harm our reputation and adversely impact our financial results

All 59 risk factors

Headings as the filing states them, in filing order.

Risks Related to Our Business

  1. 01Our revenue is primarily generated from sales of our Inspire system and we are, therefore, highly dependent on it for our success
  2. 02Our financial results and the market price of our common stock may fluctuate significantly and may not fully reflect the underlying performance of our business40% rewritten
  3. 03We may not be able to sustain profitability, we have historically incurred significant operating losses, and we may incur operating losses in the future32% rewritten
  4. 04If patients or physicians are not willing to change practices to adopt our Inspire therapy to treat moderate to severe OSA, our Inspire therapy may fail to gain increased market acceptance, and our business will be adversely affected
  5. 05If we are unable to achieve and maintain adequate levels of coverage or reimbursement for our Inspire system, or any future products we may seek to commercialize, our business, financial condition or results of operations may be adversely affected27% rewritten
  6. 06We currently compete and will in the future continue to compete against other companies, some of which have longer operating histories, more established products or greater resources than we do, which may prevent us from achieving increased market penetration and improved operating results49% rewritten
  7. 07reducing the BMI of our prospective patients and increasing the number of eligible patients for our Inspire therapy, there can be no assurance of such benefitNew
  8. 08We are involved, and may become involved in the future, in disputes and other legal or regulatory proceedings that, if adversely decided or settled, could materially and adversely affect our business, financial condition, and results of operations84% rewritten
  9. 09Our long-term growth depends on our ability to enhance our Inspire system, expand our indications, and develop and commercialize additional products
  10. 10Our results of operations could be materially harmed if we are unable to accurately forecast customer demand for our Inspire system and manage our inventory41% rewritten
  11. 11to allocate sufficient capacity in order to meet our increased requirements, which could have an adverse effect on our ability to meet customer demand for our Inspire system and our results of operationsNew
  12. 12We rely on a limited number of third-party suppliers and contract manufacturers for the manufacture and assembly of our products, and a loss or degradation in performance of these suppliers and contract manufacturers could have a material adverse effect on our business, financial condition, and results of operations53% rewritten
  13. 13Performance issues, service interruptions or price increases by our shipping carriers could adversely affect our business and harm our reputation and ability to provide our services on a timely basis
  14. 14Consolidation in the healthcare industry or group purchasing organizations could lead to demands for price concessions, which may affect our ability to sell our products at prices necessary to support our current business strategies
  15. 15If we are unable to effectively size, manage and maintain our direct sales and marketing organization we may not be able to generate revenue growth
  16. 16To successfully market and sell our Inspire system in markets outside of the U.S., we must address many international business risks33% rewritten
  17. 17We primarily rely on our own direct sales force for our Inspire system, which may result in higher fixed costs than our competitors and may slow our ability to reduce costs in the face of a sudden decline in demand for our products
  18. 18We face the risk of product liability claims that could be expensive, divert management’s attention and harm our reputation and business. We may not be able to maintain adequate product liability insurance28% rewritten
  19. 19If the quality of our Inspire system does not meet the expectations of physicians or patients, then our brand and reputation or our business could be adversely affected
  20. 20If we choose to acquire new and complementary businesses, products or technologies, we may be unable to complete these acquisitions or to successfully integrate them in a cost-effective and non-disruptive manner
  21. 21Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations
  22. 22Failure of a key information technology system, process or site, cyberattacks, or other deficiencies in our cybersecurity could have an adverse effect on our business and operations47% rewritten
  23. 23If our facilities are damaged or become inoperable, we may be unable to continue to research, develop, and supply our Inspire system and, as a result, there could be an adverse effect on our business until we are able to secure a new facility and rebuild our inventory
  24. 24We rely on third-party distributors to effectively distribute our products in certain markets
  25. 25We bear the risk of warranty claims on our Inspire system23% rewritten
  26. 26We may need substantial additional funding beyond our existing cash resources and may be unable to raise capital when needed, which could force us to delay or reduce our commercialization efforts or product development programs
  27. 27Our ability to use our net operating losses and research and development credit carryforwards to offset future taxable income may be subject to certain limitations47% rewritten
  28. 28Fluctuations in our tax obligations and effective tax rate and realization of our net deferred tax assets may result in volatility of our operating results and materially impact our financial condition or financial resultsNew
  29. 29If we were deemed to be an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business, financial condition and results of operations
  30. 30The evolving focus on sustainability and environmental, social, and governance initiatives from regulators and stakeholders could increase our costs, expose us to new risks, harm our reputation and adversely impact our financial results22% rewritten
  31. 31Climate-related events, geopolitical and global events, and other events could harm our business

Risks Related to Government Regulation

  1. 32Our products and operations are subject to extensive and changing laws, government regulation and oversight both in the U.S. and abroad, and our failure to comply with applicable requirements could harm our business
  2. 33We may not receive the necessary approvals or certifications for our future products or expanded indications, and failure to timely obtain necessary approvals or certifications for our future products or expanded indications would adversely affect our ability to grow our business and our results of operations
  3. 34The timing of FDA approval of a next generation product could have a significant impact on the carrying value of the inventory of our previous generation product, and therefore our results of operations62% rewritten
  4. 35Failure to comply with post-marketing regulatory requirements could subject us to enforcement actions, including substantial penalties, and might require us to recall or withdraw a product from the market
  5. 36Our products must be manufactured in accordance with foreign, federal and state regulations, and we or any of our suppliers or third-party manufacturers could be forced to recall our installed systems or terminate production if we fail to comply with these regulations72% rewritten
  6. 37subcontractors. Our products are also subject to similar state regulations and various laws and regulations of foreign countries governing manufacturingNew
  7. 38Any of these actions could significantly and negatively affect supply of our products. If any of these events occur, our reputation could be harmed, we could be exposed to product liability claims and we could lose customers and experience reduced sales and increased costs86% rewritten
  8. 39If we do not obtain and maintain international regulatory registrations, approvals or certifications for our products, we will be unable to market and sell our products outside of the U.S
  9. 40The FDA may modify its enforcement policies with respect to medical software products, and our software products may become subject to extensive regulatory requirements, which may increase the cost of conducting, or otherwise harm, our business
  10. 41Legislative or regulatory reforms in the U.S. or the EU may make it more difficult and costly for us to obtain regulatory clearances, approvals or certification for our products or to manufacture, market or distribute our products after clearance, approval or certification is obtained43% rewritten
  11. 42have been used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of PHINew
  12. 43Our business may be affected by the evolving regulatory framework for AI TechnologiesNew
  13. 44Current and future healthcare reform legislation or regulation may increase the difficulty and cost for us to commercialize our products and could harm our business, financial condition and results of operationsNew
  14. 45Our business involves the use of hazardous materials and our third-party manufacturers must comply with environmental laws and regulations, which may be expensive and restrict how we do business
  15. 46employee headcount and costs associated with U.S. administrative agencies, including the FDA, and it remains unclear the degree to which these efforts may limit or otherwise adversely affect such agencies’ ability to conduct routine activitiesNew

Risks Related to Intellectual Property Matters

  1. 47If we are unable to adequately protect our intellectual property rights, or if we are accused of infringing on the intellectual property rights of others, our competitive position could be harmed or we could be required to incur significant expenses to enforce or defend our rights
  2. 48Litigation or other proceedings or third-party claims of intellectual property infringement could require us to spend significant time and money and could prevent us from selling our products or affect our stock price26% rewritten
  3. 49If we are unable to protect the confidentiality of our trade secrets, our business and competitive position could be harmed
  4. 50We may be unable to enforce our intellectual property rights throughout the world
  5. 51Third parties may assert ownership or commercial rights to inventions we develop
  6. 52Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets
  7. 53Changes in U.S. and foreign patent laws may limit our ability to obtain, defend and/or enforce our patents43% rewritten
  8. 54tribunal for challenging patents could increase the likelihood that our own patents will be challenged, thereby increasing the uncertainties and costs of maintaining and enforcing themNew

Risks Related to Our Common Stock

  1. 55Provisions in our governing documents and under Delaware law could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our current management
  2. 56Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain
  3. 57Changes in U.S. and foreign tax laws could have a material adverse effect on our business, cash flow, results of operations and financial condition35% rewritten
  4. 58Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
  5. 59Securities analysts may not publish favorable research or reports about our business or may publish no information at all, which could cause our stock price or trading volume to decline

Other Inspire Medical Systems 10-Ks

  • FY2024 10-K risk factors
    59 risks

    Inspire Medical Systems relies entirely on its Inspire system for revenue, facing intense medical technology competition and strict regulatory oversight.

    Filed Feb 10, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.