| Small & micro cap project / Activism insight

Inspire Medical Systems: Signs of moat

by | May 12, 2020

The company’s proprietary Inspire system is the first and only FDA-approved closed-loop neurostimulation technology that provides a safe and effective treatment for moderate to severe obstructive sleep apnea (“OSA”). OSA occurs when a person’s breathing is interrupted during sleep by a partially or completely blocked airway, and affects patients of all ages, sexes and body types.

What is the standard procedure?

Continuous positive airway pressure (“CPAP”) is the leading therapy for patients with moderate to severe OSA. CPAP is delivered through a face or nasal mask that connects through a hose to a bedside air pump. In order for CPAP to be most effective, the mask must form an airtight seal on the patient’s face or nose, and the mask must be worn every night. The effectiveness of CPAP has been limited due to low patient compliance, as many patients find the mask or treatment cumbersome, uncomfortable and noisy. Apart from CPAP, other treatment options are primarily invasive surgical procedures developed to modify or remove existing tissue in an attempt to create free air flow. These invasive surgical procedures have limited or unpredictable clinical benefit, are irreversible, and can be extremely painful. 

The company’s solution: a CPAP alternative

The company has developed a novel, closed-loop solution that continuously monitors a patient’s breathing and delivers mild hypoglossal nerve stimulation to maintain an open airway. To receive the Inspire system, patients undergo a short outpatient surgical procedure, typically lasting two hours, during which the neurostimulator, sensing lead, and stimulation lead are implanted. Patients turn their Inspire system on when they plan to go to sleep and turn it off when they awaken.

The company’s solution is comfortable and convenient, and in fact, the company’s product has received a 93% satisfaction level, with an average of 12 months from initial treatment in the first 1,017 patients in the company’s ongoing global patient registry.

Signs of moat:

It is the first and only FDA-approved obstructive sleep apnea treatment that works inside the body with just the click of a button.

  • First mover advantage.
  • Track record: The company received approval in 2014 and since then has treated over 7,800 patients at over 350 medical centers across the U.S. and Europe. This proven track record would be hard for any newcomers to overcome.
  • Patents: As of December 31, 2019, the company has rights to 28 issued U.S. patents, 26 issued foreign patents, 39 pending U.S. patent applications, and 47 pending foreign patent applications.


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