Nevro Corp. has submitted a premarket approval supplement to the U.S. FDA seeking a green light for its Senza system to treat chronic pain associated with painful diabetic neuropathy (PDN).

This submission is expected to allow the company to gain approval and kick off U.S. launch activities for this indication in the second half of next year. Nevro would be tapping into a big market, as diabetes affects roughly 1 in 10 adults in the U.S. and can damage peripheral nerves, resulting in severe pain and numbness in the extremities. In announcing the move, the company cited literature stating that there are about 4 million diabetic patients suffering from PDN in the U.S. alone.

"This submission is a significant milestone in the evaluation of Nevro's proprietary HF10 high frequency spinal cord stimulation [SCS] therapy to address the many PDN patients who are unable to find relief with currently available pharmacologic options," said D. Keith Grossman, Nevro's chairman, CEO and president.

There are a lot of eyes on Grossman, who is expected to help put Nevro on a successful path. The company said in March 2019 that it had named Grossman as president and CEO, succeeding Rami Elghandour.

According to the company, the randomized SENZA-PDN study assessing SCS treatment is the largest of its kind conducted thus far. It looked at HF10 therapy plus conventional medical management (CMM) to CMM alone in 216 patients at 18 centers in the U.S. The primary endpoint was the difference in proportion of treatment responders at three-month follow-up with all study participants continuing to be followed out to 24 months. The study aims to provide safety and efficacy data, which will be used to support customer adoption and efforts to ensure adequate payer coverage.

The Redwood City, Calif.-based company noted that SENZA-PDN study data is expected to be discussed at the upcoming 2021 North American Neuromodulation Society (NANS) Virtual Meeting. The session will highlight complete six-month results and the analysis of all prespecified secondary endpoints. A first look at preliminary 12-month pain relief and preliminary crossover results also is planned.

Developing the PDN market

During a Nov. 30 presentation that was part of the Citi Bank Head Shoulders Knees and Toes Conference Call Series, analyst Joanne Wuensch asked Grossman about where he saw the company going in two years. He answered that he hoped that the market had moved well beyond COVID-19 and that his company would be experiencing double-digit growth rates. He also expressed interest about pushing the PDN market forward, as “we're on a path to market leadership, which I think we have every right to expect over time from this technology and this franchise.”

In the wake of his comments, analysts had various – but mostly positive – reactions. SVB Leerink’s Danielle Antalffy rated the company’s shares Outperform with a $175 12-month price target. She added that Grossman is turning things around, and, as a result, “we view NVRO as an execution story, as the management team stabilizes and strengthens the company’s commercial foundation to optimize its commercial potential.” She predicted that the SCS market in the U.S. will deliver growth, while the company will return to a share gain position with sales rep productivity improving.

She also pointed to the Omnia system as driving incremental growth. In May, the company reported that it had received CE mark approval for the system, with an eye toward delivering a solution for patients with chronic pain. It launched that solution in the U.S. late last year.

Meanwhile, William Blair analyst Margaret Kaczor put forward in a Dec. 22 note that the future likely is bright for Nevro. She posited that patients who are in pain likely would be among the first to return next year. “Beyond that, we believe the fundamental story for Nevro remains strong, as both a post-COVID beneficiary and with upcoming clinical data presentations,” she wrote, calling out the expected presentation of the 12-month responder rate data for the PDN study at NANS.

“Overall, we believe that both PDN and NSBRP [nonsurgical refractory back pain] give Nevro an opportunity to expand its TAM [total addressable market] meaningfully while also launching a product that should help pull forward revenue growth toward the end of 2021 and into 2022. We believe these investments – both within pain and extending into new indications – will ultimately prove to be the drivers of the stock as the company looks to durably reaccelerate its revenue and market growth profiles,” she wrote.

Wells Fargo’s Larry Biegelsen rated Nevro shares as Overweight, highlighting the ability of management to turn things around, the strength of the SCS market and in what he views as the group’s underappreciated pipeline.