Lilly OSA results ‘small net-positive’ for Inspire Medical, says Morgan Stanley

Morgan Stanley notes that Eli Lilly (LLY) announced positive topline results of the SURMOUNT-OSA phase 3 clinical trial, with tirzepatide significantly reducing apnea-hypopnea index, or AHI, versus placebo. The firm views this result as “a small net-positive” for Inspire Medical (INSP) over the long-run, with the hypoglossal nerve stimulator, or HGNS, therapy patient funnel likely expanding thanks to weight-loss benefits. The firm, which says it appreciates that SURMOUNT-OSA “has been a large overhang on shares for some time,” thinks that while this result “should begin to eliminate the bear thesis,” shorter-term patient funnel trends will likely be the core focus assuming tirzepatide obtains the obstructive sleep apnea, or OSA, label. Morgan Stanley has an Overweight rating and $250 price target on Inspire shares, which are off earlier lows in pre-market trading and have turned fractionally positive.