Nevro Corp.’s stock was up following encouraging results detailed during its fourth-quarter earnings call. Management predicted a positive 2020, highlighting the potential of the U.S. spinal cord stimulation (SCS) market.

Redwood City, Calif.-based Nevro developed HF10 to treat chronic pain of the trunk and/or limbs. It offers the Senza SCS system, which is available in several markets, including the U.S. Last November, the company reported that it had won U.S. FDA approval for the Senza Omnia SCS system. It is intended to deliver the HF10 therapy, as well as all other available SCS frequencies.

Keith Grossman, chair, CEO and president of the company, noted that the SCS market slowed last year as a result of stocking issues – a challenge that affected both it and its competitors. “We also believe 2020 should demonstrate U.S. SCS market growth spurred in part by our Omnia commercial launch as well as the promotion of a couple of product upgrades from our competitors.”

Overall, worldwide revenue for the quarter came in at $114.4 million, a 6% increase vs. $107.9 million for the same period last year.

NSRBP surprise

For her part, William Blair's Margaret Kaczor said that one aspect of the call surprised her – namely the commentary related to the company's nonsurgical refractory back pain (NSRBP) randomized controlled trial. “A third-party statistician determined that following an interim look the trial is already adequately powered,” she wrote. “The update potentially accelerates a path to improving reimbursement coverage for the 300,000 NSRBP patients domestically and adds another meaningful catalyst to 2021.”

Grossman addressed the study, acknowledging that Nevro had not provided many details on it previously. The study is comparing the safety, clinical effectiveness and cost-effectiveness of HF10 therapy plus conventional medical management (CMM) to CMM alone in those with chronic refractory back pain who are not candidates for back surgery. As a result of the third party’s assessment, Grossman said no additional enrollment is required.

He emphasized that the study is blinded, so the company has not seen any data. Still, there is a possibility that the company may be able to present data at the North American Neuromodulation Society (NANS) meeting in 2021.

Grossman also discussed the reimbursement opportunity Kaczor mentioned. “As most of you know, having prior back surgery is often a requirement for payers to provide SCS reimbursement. Today, approximately 30% of our current patient population are nonsurgical back pain patients, and they're getting their procedures reimbursed on a case-by-case basis, though, often with additional pre-authorization support. We expect that our NSRBP data will allow us to work with payers to broaden access to SCS therapy for this dramatically under-treated and under-penetrated market segment with a patient population that we think is up to approximately $300,000 per year.”

Against this backdrop, Wells Fargo’s Larry Biegelsen appeared to see the potential of the NSRBP opportunity. “Based on our checks with physicians, the impact from this study would potentially be greater than the SENZA-PDN [painful diabetic neuropathy] trial[,] as many of these patients are already being seen by pain specialists and many patients are seeking a non-surgical option,” he wrote.


Still, the PDN study represents an exciting opportunity for the company. Specifically, the study is comparing the company’s HF10 therapy plus CMM to conventional medical management alone. The company presented three-month results from the study at the NANS meeting last month.

At the time, Kaczor highlighted these results, which she labeled “encouraging.” The company is looking to go to the FDA for label expansion shortly, with an eye toward potential commercialization by mid- to late 2021. However, the market could take some time to develop.

“While the PDN trial was front and center from an investor perspective, we came also away more encouraged by the ongoing opportunity within its existing back and leg pain market, including interest and catalysts to continue recent mid- to high-teens-plus implant growth,” Kaczor wrote.

She also pointed to the momentum behind NSRBP in her note, adding that it represents a big opportunity over the next few years.

With the current financial results, Biegelsen highlighted the company’s bullish stance on PDN. “Management noted that PDN would be more NVRO-specific than a class effect across players for clinicians and regulatory agencies. We agree as studies with low frequency SCS have shown lower responder rates than HF10 in PDN patients, therefore, we believe NVRO will disproportionately benefit from the PDN opportunity.” He noted the PDN opportunity could represent 10% to 20% of the company’s SCS implants in three years, or an incremental $50 million to $100 million in sales.


During the call, Cecilia Furlong with Canaccord asked about the sales force and plans in terms of ads, as well as what role Omnia will play. “[W]e've given our sales organization a very, very specific road map of Omnia, not only training, but also positioning and targeting,” Grossman replied. He declined to go into the details of the targeting, “[b]ut we have very specific directions in the hands of our sales organization.”

Suraj Kalia with Oppenheimer asked whether the company would provide the quarterly contribution of Omnia. Grossman replied that the company does not break out revenue by product, and it does not plan to start.

COVID-19 also came up during the call, with CFO Andrew Galligan noting that the company does not have revenue in Asia. “We do have a small number of components that are sourced from Chinese suppliers. However, we believe we have taken appropriate measures to mitigate any potential supply risks.”