Nevro Ponders Next Move After Competition Increases in SCS Market

Nevro is looking at strategic options after citing heavy competition from larger players in the spinal cord stimulation market.

The measure comes several months after Nevro announced it would cut about 5% of its workforce.

The Redwood City, CA-based company said that these strategic options could include the sale of the business or to diversify the product portfolio. The company posted 2Q24 sales of $104.2 million a 4.3% decrease year-over-year.

“We really like our strategy of diversification that allows us to bring more value to our customers,” said Kevin Thornal, Nevro CEO according to a Seeking Alpha transcript of the call.  “And we could do that on a stand-alone basis. But we did feel the urgency to explore all possible options so that those can be available that might be able to help us accelerate those plans that we have for diversification and allow us to bring more value to our customers.”

Thornal added, “We're not giving a timeline. We're in the early stages right now of the process and so we're just kicking off the exploration. And as we said as well, it may come down to the point of -- it might be best for us to be stand-alone if it doesn't bring as much shareholder value to explore these other options, but we're looking at all of them at this point.”

Related:Nevro Lays Off 5% of Workforce

The company is no stranger to acquisitions to expand the business. Late last year, Nevro announced the acquisition of Vyrsa Technology, a company focused on minimally invasive treatments for patients with chronic sacroiliac joint (SI joint) pain.

Tough Competition

“The SCS market has seen increased competition driven mainly by new product launches over the past year by two of our larger competitors,” Thornal said, according to a Seeking Alpha transcript of the call. “As we've seen historically, some physicians like to try new products when they are introduced.”

In April, Medtronic won FDA approval for Inceptiv, its closed-loop spinal cord stimulator. The Dublin-based company said Inceptiv was its first device to offer a closed-loop feature that senses biological signals along the spinal cord and automatically adjusts stimulation in real-time.

Earlier this year, Boston Scientific won a nod from FDA for an expanded indication of the WaveWriter SCS system to treat chronic low back and leg pain in people without prior back surgery, commonly referred to as non-surgical back pain.

About two years ago, Boston Scientific and Nevro settled a nearly six-year-old patent spat.

Under the settlement, Marlborough, MA-based Boston Scientific paid $85 million to Nevro to end all existing litigation between the two. The settlement gave Boston Scientific freedom to operate using the features and capabilities embodied in its current line of products for frequencies below 1,500 Hz, and gave Nevro the freedom to operate using the features and capabilities embodied in its current line of products. 

Related:Nevro Takes Medtronic to Task Over Diabetic Neuropathy Data