
Market Overview and Growth Potential - The Spinal Cord Stimulation (SCS) market has strong growth fundamentals despite being impacted by COVID-19 [5] - The global SCS market is estimated at $2.3 billion annually [11], with the US market accounting for $1.8 billion and the international market for $0.5 billion [12] - The total addressable U.S Lower Back & Leg market is $17.9 billion annually, with approximately 8% penetration [14] - The Non-Surgical Refractory Back Pain (NSRBP) market represents a $11.4 billion opportunity, with only ~5% penetration [17, 61] Nevro's Position and Strategy - Nevro is positioned to outperform in the SCS market with its unique 10 kHz Therapy [3, 67] - Nevro's SCS market share has been growing since 2015, reaching an estimated 18-20% [24] - U.S permanent procedures were up +4%, while total market SCS perms were down -8% [24] - The company is focused on expanding into Painful Diabetic Neuropathy (PDN) and NSRBP markets [6] Painful Diabetic Neuropathy (PDN) Opportunity - The annual Total Addressable Market (TAM) for PDN is estimated at $3.5-5.0 billion [37] - Approximately 20% of diagnosed Patients With Diabetes (PWD) have PDN, with 45% refractory to Conventional Medical Management (CMM) [37] - 86% of patients on 10 kHz Therapy had substantial, durable pain relief through 12 months, compared to 0% of patients on CMM alone [47] - Preliminary worldwide PDN revenue reached ~$4.0 million in Q4 2021 [57] Operational Efficiency and Financial Outlook - Excluding all litigation-related and PDN expenses, YTD Q3 2021 operating expenses would be less than YTD Q3 2019 by almost $35 million, or 13% [64] - Gross margin expansion to mid-70s% is expected over the next 3-5 years [65] - An investment of $21 million by the end of 2022 in Costa Rica manufacturing operations [65]