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Baird has put Inspire Medical Systems (NYSE:INSP) on its top idea list following a survey of US physicians utilizing the company’s hypoglossal nerve stimulation, or HNS, device for obstructive sleep apnea.
The investment firm said its survey of 39 US-based implanting physicians left it “increasingly confident” in “meaningful upside” to Inspire’s fiscal 2024-2026 growth outlook, its longer-term competitive moat, and the limited impact of GLP-1 drugs on the business.
Baird said it sees Inspire maintaining market share of 85% at least by 2028. It also sees no material GLP-1-driven change to the company’s approximately 500K US total addressable market, with increasing capacity at treatment centers more than offsetting any “GLP-1 degradation in referrals.”
“While we anticipate volatility around the upcoming SURMOUNT-OSA readout, we don’t think real-world impacts will play out as bad as some fear and thus, at current levels, think share price upside potential outweighs the 12-month downside risk,” Baird added.
SURMOUNT-OSA is Eli Lilly’s (LLY) study of its GLP-1 drug tirzepatide, also known as Mounjaro and Zepbound, in the treatment of obstructive sleep apnea in obese patients. Tirzepatide’s main competitor is semaglutide, which is marketed under the brand names Wegovy and Ozempic by Novo Nordisk (NVO).
