JPMorgan says Lilly data positive for Inspire Medical, buy shares

JPMorgan analyst Robbie Marcus recommends buying shares of Inspire Medical (INSP) on weakness following Eli Lilly’s (LLY) results of SURMOUNT-OSA, which evaluated the use of tirzepatide in obstructive sleep apnea. The trial showed that tirzepatide significantly reduced apnea-hypopnea index compared to placebo, meeting its primary endpoint as expected, the analyst tells investors in a research note. The firm says that to argue for tirzepatide replacing obstructive sleep apnea therapy like CPAP machines or Inspire, the non-positive airway pressure arm reduction of 50.7% is the right metric to use. This came in at the low end of expectations, which is a win for Inspire, contends JPMorgan. The firm does not see a 50.7% reduction as sufficient to replace CPAP or Inspire, saying tirzepatide could be used alongside these therapies to treat sleep apnea. It believes Lilly’s data clears an overhang for Inspire Medical shares and allows investors to return to focusing on the Q1 fundamentals, which it thinks “should be good.” JPMorgan has an Overweight rating on Inspire Medical.