Nevro Senza System

Highlights from Nevro's Presentation at the Morgan Stanley 2017 Global Healthcare Conference

Posted on September 20, 2017 by Medtech[y] Staff

Rami Elghandour and Andrew Galligan, Nevro CEO and CFO respectively, joined analysts at the The Morgan Stanley 2017 Global Healthcare Conference to provide an update on Nevro's business. 

While Nevro's business has continued to show significant growth, Wall Street punished them earlier in the year for not adequately projecting revenue. While confirming their full-year guidance of $310 million to $320 million was a positive, their wider than expected loss is what led to the stock tumbling over 12% after their Q1 earnings release.

The Morgan Stanley 2017 Global Healthcare Conference was an ideal setting to dig into Nevro's business and address questions and concerns with analysts. 

There was significantly more discussed at the conference but we decided to pull a couple of topics from the meeting. 

You can find a transcript of the conference here.

New VP of Sales

In July 2017, Nevro's VP of Sales, Michael Enxing, left to become the VP of Sales and CCO at Vertiflex Spine. The details of why he left are unknown but no doubt it is an important position to fill which is why analysts started there.

Rami addressed the question and position the VP role at Nevro as an exciting opportunity for someone and it is attracting very strong candidates. Based on comments from the meeting, it appears that Rami is handling the VP position until they find the right candidate. 

As to the timeline?

Rami Elghandour

You know I don’t want to put a specific timeline around there. We’re going to try to get the right person. Again, this is not a situation where we feel like we need to rush out and do anything. We feel again, I feel very strongly about our existing team. I like where you know our execution in the second quarter. I like where it’s going you know in the back half of the year, so we want to make sure we got the right person. It can really help us continue to scale and get to the potential that we all know we can achieve with this product in this market.


In a medical sales organization of Nevro's size, the VP of Sales is typically on the executive team and is a major driving force in creating the culture for the sales organization, from front line sales reps to marketing and customer service. From this perspective, it is understandable that Rami takes the time to find the right candidate but a good CEO always has a list of candidates in case positions need to be filled. 

If Rami had a list then this hire would have been made by now. 

Competition and Market Share

David Lewis - Medical Device Analyst at Morgan Stanley

Okay. What if we talk a second about share, Rami. I wanted the entry dynamics here and you touched on this a little bit, but look you are the smaller share player in this market of the largest four players at around 15% market share. You took about a 150 basis points a share last quarter, one of your competitors St. Jude had 28%, 29% market share in net [ph] of 300 basis points a share. You think it would be the innovator the disruptor with randomized control superior data should be taking more share. Can you get back to a share leadership position in the back half of the year?

Rami Elghandour

Look, I think we certainly expect to continue to take share and we -- our goal would be to have a dominant share position in this market. How that kind of plays out on a quarterly basis with some of the competitive dynamics we talked about and some of their tactics in any given quarter, there is going to be some kind of back-and-forth, but we’re very confident in our ability to take a dominant share position in this market, not just from the back of the clinical data we’ve generated, but on the strength of our commercial execution and over the long-term certainly having our pipeline come into play.

You know we’ve seen that the bulking for sure is one particular strategy. Another strategy we have seen from one of our competitors is kind of driving replacements and perhaps prematurely, right. So reaching out directly to patients, bundling patients and it’s a kind of upgrade to the newest supposedly better device. And so we’ve seen some of that as well anecdotally, so it’s hard to really figure out how much of this sort of additional layer of growth is being driven by the sure of some tactics versus maybe some of our competitors has earned best thing in kind of more market development and helping grow the market as well which would be I think positive for the market. So it’s kind of hard to separate, right. We don’t have exact information on this but there’s probably a mix of positive investment in the market and some other short term tactics that kind of drive revenue.

New Products

David Lewis - Medical Device Analyst at Morgan Stanley

Okay. So one of the responses that we got at NANS this year versus the major medical meeting for this particular industry, you had this disruptive therapy and high-frequency, so that the non- disrupters obviously came back with lot of feature and benefit enhancements to the system. And you need to do that for a prolonged period of time, because you have a disruptive therapy.

But at some point you got to make incremental enhancements to your system and there are a couple coming up that we’re thinking about you got a smaller IPG program in the next six to 12 months as well as MRI safe labeling which has been – you’ve had a very disruptive in a CRM world, probably less disruptive in your world. These feature and benefit upgrades, how important are you to from a share and growth perspective, maybe you just update us on the timeline for MRI and the smaller IPG?

The analysts also asked how important feature and benefit upgrades were from a growth and share perspective. on new products and iterative improvements to Nevro's current system. Nevro has a very disruptive therapy which sets them apart from their competitors but the disruption they created forced those competitors to come to market with a lot of new features and benefits. 

Where does Nevro stand on this issue?

Andrew Galligan

Yes. So smaller IPG, we said at the last call that it was about nine months out and there's no reason to change that is all, but really is an opportunity to price discrimination [ph] as much as anything, and they were rather disadvantage by only having one product in the market whereas all of our competitors have at least two products. And then the conditional MRI approval, we said, was about 12 months out, and so both of those are interesting from an operational viewpoint. There are good things to have to get rid of objections. But I don't think they are particularly market moving per se, they’re just – they’re necessary. There are things you just have to do.

David Lewis

Okay. And the timeline for both, I think…

Rami Elghandour

Nine months for the IPG, a year for the conditional MRI dated from August when we gave the last update.


MRI compatability is a necessary improvement to their system. That's where the market is going. As to to improving the entire system, Nevro's big splash in the SCS market gave their competitors the motivation to create new bells and whistles on their systems. Frequency aside, Nevro is looking a little long in the tooth compared to their competitors.

Image isn't everything, but it is fair to say that St. Jude and Medtronic are not sitting back and letting Nevro have all the fun. One thing Nevro needs to understand is that they deal in a market where patients have a greater impact in what device they have implanted than many other procedures. 

Let's take a look at the systems from Nevro and St. Jude/Abbott:

Nevro Senza

Nevro Scs

St. Jude Proclaim Elite SCS Systems

Stj Scs

If you were a patient, what system would you choose?

Again, check out the rest of the transcript for a deeper dive into Nevro's business, potential market opportunity & much more.

Lastly, check back on our medical sales blog where we will dig deeper into the competing systems in the SCS market, with a slight twist.

Join the conversation on the Nevro Medtechy Message board