NeuroPace(US:NPCE)2023-05-07 11:42Financial Data and Key Metrics Changes - Total revenue for the first quarter of 2023 was $14.5 million, representing a growth of 27% compared to $11.4 million in the first quarter of 2022 and a sequential increase of 13% from $12.8 million in the fourth quarter of 2022 [3][6] - Gross margin for the first quarter of 2023 was 72%, down from 73% in the first quarter of 2022 and up from 69% in the fourth quarter of 2022 [56] - Net loss for the first quarter of 2023 was $10.4 million, compared to a net loss of $11.5 million in the first quarter of 2022 [75] Business Line Data and Key Metrics Changes - Replacement implant revenue generated $1.2 million in the first quarter, which is a decrease from previous quarters as expected [47] - The DIXI Medical distribution partnership contributed positively to revenue, with expectations for continued growth as the business matures [10][54] - Initial implant revenue growth was driven by increased utilization of the RNS System within Comprehensive Epilepsy Centers (CECs) [22][62] Market Data and Key Metrics Changes - The company is focusing on expanding its presence in the generalized epilepsy market, which represents about 40% of drug-resistant epilepsy patients [30][73] - The company reported stable patient volumes in Epilepsy Monitoring Units (EMUs) over the past year, indicating a gradual recovery from pre-pandemic levels [53] Company Strategy and Development Direction - The company aims to increase utilization of the RNS System by expanding patient selection, managing the patient pipeline, and driving adoption with new prescribers and implanting centers [22][23] - The strategy includes leveraging the DIXI Medical product line to enhance patient identification and conversion to RNS System implants [54][62] - The company is focused on closing the treatment gap for drug-resistant epilepsy patients by educating physicians on the benefits of the RNS System [72] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory for initial implants and the DIXI Medical products, while also acknowledging the challenges in replacement implant revenue [62][75] - The company expects total revenue for 2023 to range between $52 million and $54 million, an increase from the previous guidance of $50 million to $52 million [53][57] - Management highlighted the importance of the NAUTILUS study for primary generalized epilepsy and the NIH study for Lennox-Gastaut syndrome as key clinical priorities [46][73] Other Important Information - Cash and short-term investments as of March 31, 2023, were $67.6 million, with long-term borrowings totaling $53.9 million [7] - Operating expenses for the first quarter of 2023 were $18.7 million, slightly higher than $18 million in the same period of the prior year, but as a percentage of revenue, they were lower for both R&D and SG&A [25] Q&A Session Summary Question: Can you provide specifics on revenue from the three lines? - Management indicated that while replacement revenue was $1.2 million, they did not disclose specific figures for DIXI Medical and new patient revenue due to competitive reasons [33][39] Question: How is the DIXI Medical product impacting patient conversion? - Management noted that the DIXI Medical product is providing visibility into the diagnostic process, which is helping to convert patients to RNS System implants [82] Question: What is the outlook for the NAUTILUS study? - Enrollment for the NAUTILUS study is on track to be completed in the first quarter of 2024, with results expected to support a PMA supplement for generalized epilepsy [46][80]