|Senza spinal cord stimulation system--Courtesy of Nevro|
Investors already have priced in some high expectations into pain neurostimulator player Nevro ($NVRO). Just a few months into the launch of its first product, Senza, which is seen as a best-in-class product that will dominate the roughly $1.2 billion annual U.S. pain spinal cord stimulation market, Nevro is already worth a whopping $1.4 billion.
In early trading after its first earnings report on Senza sales, Nevro climbed 3%--bringing its stock market gain thus far in 2015 to almost one-third.
The company reported $11.4 million in revenue last quarter, an increase of 52% over the same period a year prior. Almost all of that--$11.3 million--was from international sales. In the U.S., it reported about $53,000 in Senza revenue last quarter from only two implants, but that was for about one week of sales. The first U.S. commercial procedure for the implant was on May 22, with the quarter ending June 30.
"The organization continues to execute well with another milestone-packed quarter," said Nevro chairman and CEO Michael DeMane in a statement. "We are now underway with U.S. launch of the therapy making the technology available for the first time to leading pain management centers in the country. The positive reception from our physician and surgeon partners affirms our confidence in this therapy advance."
Nevro raised its 2015 revenue guidance to $41 million to $43 million up from $36 million to $38 million, indicating increased confidence in the ongoing launch. It now has a 70-person sales staff.
The company reported an operational loss of $19.2 million last quarter, up from $7.5 million as the company ramps up its sales efforts. At June 30, Nevro reported $58.7 million in cash--but it also raised about $126 million in a June follow-on.
That's in addition to another $150 million in stock sold on behalf of its shareholders. All that activity hasn't dampened its share price much--at about $51, it's still almost triple the $18 offer price from its November 2014 IPO.
Leerink analyst Danielle Antalffy is forecasting almost $200 million in 2017 Senza sales, upon which she bases her $70 price target.
She summed up her view on the Senza launch in a recent note, "As the U.S. launch gains traction over the next few quarters, we believe estimates are likely to move higher given NVRO's strong competitive positioning with a superiority claim as well as the potential for even faster market growth."
- here is the release