
Nevro Corp. Beats Outlook and Raises Forecast but Faces Expanding Competition in High Growth Diabetic Neuropathy Indication
11-2-23 (by: Scott Gleason) Nevro Corp. has released its financial results for the third quarter of 2023 with revenue for the third quarter of 2023 amounted to $103.9 million, showing a 3% increase both as reported and in constant currency, compared to the third quarter of 2022. Analysts had forecasted total revenue of $96.5 million. In the United States, the company had a 7% increase in implant volumes during the third quarter of 2023, compared to the same period in 2022. Management believes it held its market share in spinal cord stimulation in the quarter and noted competitors showed growth showing procedure stabilization.
Painful Diabetic Neuropathy (PDN) indication sales experienced substantial growth, reaching approximately $20.8 million, representing a 56% increase when compared to the same period in 2022. Management noted that PDN represented 20% of implant procedures worldwide. Management noted strong clinical data from the 24-month readout of the SENZA PDN Randomized Controlled Trial which showed a 90.1% Responder in refractory PDN and which was published in Diabetes Research and Clinical Practice. Management noted current health plan coverage for 205 million lives with PDN. Of note, Boston Scientific recently received FDA approval for diabetic neuropathy with its WaveWriter Alpha Spinal Cord Stimulation System who could represent a new competitive risk.
Kevin Thornal, Nevro’s CEO and President, expressed his satisfaction with the company’s performance, stating, “I am very pleased with our third quarter results. The changes and processes we put in place over the past five months are well underway, and we are beginning to experience the positive results from them. While we are encouraged by the early momentum we are experiencing, we know it will take several quarters for our financial results to fully reflect the positive changes we have made throughout the Company. We are excited about the opportunities ahead and delivering on our three core pillars: commercial execution, market penetration, and profit progress.”
EPS in the quarter were ($0.65) compared to street estimates of ($0.77). Cash, cash equivalents, and short-term investments were $320.3 million as of September 30, 2023, showing a $9.7 million decrease from June 30, 2023, primarily due to cash used in operations.
Nevro raised its full year outlook with guidance for the fourth quarter of 2023 calling for worldwide revenue of approximately $108 million to $110 million, representing a decrease of 4% to 6% over the previous year on a constant currency basis. The company anticipates a non-GAAP adjusted EBITDA of approximately $1 million to $2 million for the fourth quarter of 2023.