Core Insights - NeuroPace, Inc. released preliminary one-year results from the NAUTILUS study, which evaluated the safety and effectiveness of the RNS System for drug-resistant idiopathic generalized epilepsy (IGE) [1] - The study met its primary safety endpoint, showing a low rate of serious adverse events related to the device and implant procedure [1][2] - However, the primary effectiveness endpoint did not reach statistical significance for the overall study population, although a significant response was observed in a subgroup with lower baseline seizure frequency [2][3] Study Results - The study demonstrated clinically meaningful improvements in median percent seizure reduction, responder rates, and seizure-free days over the first year of treatment, continuing into the second year for those who progressed [4] - The company plans to engage with the FDA to discuss regulatory pathways based on the data, potentially focusing on patients with lower baseline seizure frequency [5] Financial Performance - NeuroPace reported a 24% increase in sales to $22.5 million in Q1 2025, with RNS System revenue growing by 29% excluding revenue from the NAUTILUS study [6] - The company raised its fiscal year 2025 sales guidance from $92 million-$96 million to $93 million-$97 million, compared to the consensus of $93.64 million [7] - Increased sales of the RNS System were the primary driver of revenue growth, alongside continued revenue from SEEG products [6][7] Stock Performance - NPCE stock experienced a decline of 33.90%, trading at $11.68 at the last check [7]

NeuroPace (NPCE) Update Summary Company Overview - **Company**: NeuroPace (NPCE) - **Industry**: Medical Devices, specifically focused on epilepsy treatment Key Points and Arguments 1. **NAUGHTLIST Study Results**: Preliminary one-year results from the NAUGHTLIST study were released, supporting an expanded clinical indication for idiopathic generalized epilepsy (IGE) [2][5] 2. **Safety and Effectiveness**: The trial met its primary safety endpoint but did not reach statistical significance for its primary effectiveness endpoint. However, there was observed efficacy in a clinically meaningful subgroup of patients [5][11] 3. **Patient Improvement**: Patients experienced improvements over time, with a median percent reduction in seizures after one year of RNS treatment higher than that observed in focal epilepsy trials leading to FDA approval [6][13] 4. **Clinical Need**: The data provides new hope for the IGE community, which has historically had limited treatment options [6][15] 5. **Study Design**: The NAUGHTLIST study was a prospective, multicenter, randomized, single-blind, sham-controlled trial involving 100 participants, with a focus on patients with drug-resistant IGE [8][9] 6. **Long-term Efficacy**: Data on longer-term seizure outcomes is encouraging, with median percent seizure reductions showing progressive improvement over time [12][14] 7. **FDA Engagement**: NeuroPace plans to submit the full dataset to the FDA in the second half of 2025 and is committed to engaging with the FDA regarding the potential for labeling aligned with the substantial subpopulation showing therapeutic benefit [15][18] 8. **Market Opportunity**: The total market for generalized epilepsy is estimated at around $800 million, with a significant portion likely represented by the subgroup that showed the highest clinical benefit [22][23] 9. **Growth Strategy**: The company’s base business is growing over 20% year over year, and the long-term strategy remains focused on expanding access to personalized therapy for epilepsy patients [19][70] Additional Important Content 1. **Forward-Looking Statements**: The call included forward-looking statements regarding projections, business opportunities, and market conditions, which involve risks and uncertainties [3][4] 2. **Patient Population Insights**: The trial included patients with severe IGE, and the majority had a lower frequency of generalized tonic-clonic seizures, which is reflective of the real-world patient population [25][62] 3. **Ongoing Analysis**: Further analyses are being conducted to understand patient characteristics that differentiate responses to treatment [12][38] 4. **Regulatory Designation**: The FDA granted breakthrough designation for the trial, recognizing it as a novel therapy addressing an unmet clinical need [64] 5. **Long-term Guidance**: The company’s long-term guidance remains unchanged, with ongoing discussions with the FDA and a commitment to advancing treatment options for IGE patients [70][71]

Core Insights - NeuroPace has completed the primary endpoint analysis of the one-year data from the NAUTILUS study, which is the first clinical study evaluating neuromodulation therapy for idiopathic generalized epilepsy (IGE) [1][7] - The study demonstrated excellent safety outcomes, meeting the primary safety endpoint with a low rate of serious adverse events related to the device [2][3] - While the primary effectiveness endpoint did not reach statistical significance in the overall population, a significant response was observed in a subgroup of patients with lower baseline seizure frequency [3][6] Study Results - The NAUTILUS study met its primary 12-week post-implant safety endpoint, confirming the favorable safety profile of the RNS System [2][3] - Clinically relevant data showed median percent seizure reduction and responder rates that were numerically robust and clinically meaningful over the first year of treatment [4][6] - The study included 100 participants, with 87 undergoing implantation of the RNS Neurostimulator across 23 epilepsy centers in the US [7] Future Plans - NeuroPace plans to submit the full dataset to the FDA and for peer-reviewed publication, engaging in discussions regarding regulatory pathways based on the data [8] - The company aims to expand access to RNS therapy and is confident in the potential for future indication expansion into IGE [5][8] - The company reaffirms its full-year 2025 financial guidance, indicating a strong base business growing over 20% year over year [9][5]

Financial Data and Key Metrics Changes - The company reported total revenue of $22,500,000 for Q1 2025, a 24% increase from $18,100,000 in Q1 2024, driven by strong growth in the RNS business [7][15] - Gross margin improved to 77% in Q1 2025 from 73.6% in Q1 2024, primarily due to increased manufacturing efficiency [16] - Net loss decreased to $6,600,000 in Q1 2025 from $8,900,000 in Q1 2024, indicating improved operational performance [18] Business Line Data and Key Metrics Changes - RNS sales increased by 26% year-over-year, and by 29% when excluding Nautilus study implants from Q1 2024 [8][15] - Sales of Dixie Medical SEEG products also contributed to revenue growth during the quarter [15] Market Data and Key Metrics Changes - The company expects a compound annual growth rate (CAGR) of over 20% through 2027, driven by RNS opportunities [14] - The company anticipates minimal revenue impact from the termination of SEEG product distribution in 2025, as remaining inventory will be sold during the transition [13] Company Strategy and Development Direction - The company is focusing on expanding access to RNS therapy, with key initiatives including Project CARE and a refocused product portfolio [8][12] - The company aims to establish the RNS system as the standard of care for drug-resistant epilepsy patients [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory, citing strong adoption of RNS therapy and ongoing clinical development initiatives [9][14] - The company plans to achieve cash flow breakeven by the end of 2027, supported by a strengthened balance sheet following a recent equity raise [18][19] Other Important Information - The company completed a $75,000,000 follow-on equity financing, enhancing its shareholder base [8] - The company is working on expanding indications for pediatric focal epilepsy and has had discussions with the FDA regarding data from the Pediatric Epilepsy Research Consortium [11] Q&A Session Summary Question: Inquiry about gross margin performance - Management confirmed that the strong gross margin of 77% was primarily driven by the RNS business and increased production volumes [24][25][26] Question: Impact of Project CARE on referral volumes - Management noted that Project CARE has positively impacted referral volumes and implants, with increasing referrals from level three and community centers [33][35] Question: Hiring cadence throughout the year - Management indicated consistent investment in the commercial organization to support growth opportunities in core centers and new geographies [36][39] Question: Challenges in training doctors in community settings - Management stated that while support is required for new centers, the organization is experienced in training and supporting new prescribers [44][46] Question: Feedback from physicians on post-approval study data - Management reported positive feedback from physicians regarding the compelling data presented, which is expected to drive engagement and sales [57][60] Question: Exit from Dixie Medical and its implications - Management acknowledged the loss of visibility in the diagnostic process but emphasized the importance of leveraging existing relationships to maintain patient care quality [78][82]

Financial Data and Key Metrics Changes - Total revenue for the first quarter of 2025 was $22,500,000, representing a 24% increase compared to $18,100,000 in the prior year period [5][12] - RNS sales increased by 26%, or 29% when excluding the impact of Nautilus study implants in Q1 2024 [6][12] - Gross margin for the first quarter of 2025 was 77%, up from 73.6% in the same period of 2024 [13] - Net loss for the first quarter of 2025 was $6,600,000, compared to $8,900,000 in the first quarter of 2024 [15] Business Line Data and Key Metrics Changes - RNS system sales were the primary driver of revenue growth, with a 26% increase year-over-year [12][13] - Sales of Dixie Medical SEEG products also contributed to growth, although specific figures were not detailed [12] Market Data and Key Metrics Changes - The company expects a 20% plus compound annual growth rate (CAGR) through 2027, indicating strong market potential for RNS therapy [11] - The company anticipates minimal revenue impact from the termination of SEEG product distribution in 2025, as remaining inventory will be sold during the transition period [11] Company Strategy and Development Direction - The company is focusing on expanding access to RNS therapy, with a record number of prescribers and ongoing momentum from Project CARE [6][10] - Strategic initiatives include a focus on clinical, product, and market development, with plans to establish the RNS system as the standard of care for drug-resistant epilepsy [6][10] - The company is transitioning away from SEEG products to concentrate on higher-margin RNS business opportunities [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory, citing strong execution and strategic initiatives that are expected to drive future performance [12][18] - The company is on track to achieve cash flow breakeven by the end of 2027, supported by a strengthened balance sheet following a recent equity raise [15][11] Other Important Information - The company completed a $75,000,000 follow-on equity financing, enhancing its shareholder base [6][12] - The gross margin for RNS products was particularly strong due to improved manufacturing efficiency [13] Q&A Session Summary Question: Inquiry about gross margin and Dixie revenue - Management confirmed that the strong gross margin was primarily driven by the RNS business, with negligible Dixie revenue impacting the overall margin [20][21] Question: Impact of Project CARE on referral volumes - Management noted increasing referral volumes into level four centers, contributing to growth, and emphasized the importance of Project CARE in expanding access to RNS therapy [28][30] Question: Hiring cadence and personnel investments - Management indicated a consistent approach to hiring, focusing on building the commercial organization to capitalize on growth opportunities [32][34] Question: Difficulty in training doctors for RNS procedures - Management stated that while support is required for new centers, the organization is experienced in training and supporting clinicians [39][41] Question: Feedback from physicians on post-approval study data - Management reported positive feedback from physicians regarding the compelling data presented, which is expected to enhance engagement and sales efforts [51][56] Question: Exit from Dixie and maintaining visibility - Management acknowledged the loss of some visibility but emphasized leveraging existing relationships and knowledge gained from the Dixie partnership [72][75]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to Commission File Number 001-40337 NEUROPACE, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organi ...

This presentation may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements may be identified by words such as "aims," "anticipates," "believes," "could," "estimates," "expects," "forecasts," "goal," "intends," "may," "plans," "possible," "potential," "seeks," "will" and variations of these words or similar expressions that are intended to identify forward-looking statements, although not all forward-looking s ...

Financial Performance - Reported record quarterly revenue of $22.5 million in Q1 2025, a 24% increase from $18.1 million in Q1 2024[5] - RNS System revenue grew 26% year-over-year in Q1 2025, or 29% when excluding revenue from implants in the NAUTILUS study in Q1 2024[6] - Increased full-year 2025 revenue guidance to $93 million - $97 million, representing growth of 16% - 21% compared to $79.9 million in 2024[13] - Gross margin for Q1 2025 was 77.0%, exceeding the full-year guidance range of 73% - 75%[7] Operating Expenses and Losses - Operating expenses increased by 8% year-over-year to $22.5 million in Q1 2025, driven by R&D investments[8] - Loss from operations improved to $5.1 million in Q1 2025, compared to $7.5 million in the prior year[9] - Net loss for Q1 2025 was $6.6 million, down from $8.9 million in Q1 2024[9] Cash Position - Cash, cash equivalents, and short-term investments totaled $66.3 million as of March 31, 2025, up from $52.8 million at the end of the prior quarter[9] Strategic Focus - The company is on track to announce topline data from the NAUTILUS pivotal study in the second half of 2025[2] - Strategic refocusing on the core RNS System product line, with plans to wind down the distribution relationship for SEEG products by Q1 2026[6]

-- Reported record quarterly revenue of $22.5 million in Q1 2025, driven by increasing market demand for core RNS System products -- -- Increased full-year 2025 revenue guidance to $93 to $97 million -- -- On track to announce topline data from the NAUTILUS pivotal study in the second half of 2025 -- -- Management scheduled to host a conference call today at 4:30 p.m. ET -- MOUNTAIN VIEW, Calif., May 13, 2025 (GLOBE NEWSWIRE) -- NeuroPace, Inc. (Nasdaq: NPCE), a medical device company focused on transformin ...

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