Nevro(US:NVRO)2021-05-09 18:02Financial Data and Key Metrics Changes - Nevro reported Q1 2021 worldwide revenue of $88.6 million, a 1% increase compared to Q1 2020 and an 8% increase compared to Q1 2019 [6][25] - U.S. sales were $74.7 million, a decrease of 1% year-over-year but an increase of 14% compared to Q1 2019 [6] - International revenue increased 14% year-over-year to $13.9 million, with a 4% increase on a constant currency basis [6] - Gross profit for Q1 2021 was $62.3 million, a 3% increase compared to the prior year [25] - Net loss from operations was $22.5 million, a 2% improvement compared to a loss of $23.1 million in the prior year [28] Business Line Data and Key Metrics Changes - U.S. permanent implant procedures remained flat year-over-year, while trial procedures declined by 4% [7] - Approximately 134 scheduled U.S. permanent implant procedures were canceled due to COVID, with 60% still unrecovered by the end of the quarter [8] - The company reported a record number of new patient leads from direct marketing efforts, indicating potential future growth [7] Market Data and Key Metrics Changes - The impact of COVID-19 on revenue and procedures lessened as the quarter progressed, with March showing encouraging improvement [7] - The company expects the U.S. market to recover more rapidly than international markets [7] Company Strategy and Development Direction - Nevro aims to launch its PDN (painful diabetic neuropathy) therapy in the second half of 2021, with a focus on generating awareness and expanding market access [10][13] - The company introduced a new brand identity, HFX, to unify its product offerings and enhance patient support [17] - The recent Omnia upgrade, HFX Connect, is expected to improve patient care and operational efficiency [18][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery from COVID-19 and the potential for increased patient demand for SCS therapy [9][23] - The company anticipates a gradual improvement in revenue and patient engagement as COVID-related restrictions ease [9][23] - Full-year 2021 revenue guidance was updated to approximately $440 million to $450 million, reflecting a 22% to 24% growth over the prior year [34] Other Important Information - Legal expenses related to patent litigation were $5.9 million for Q1 2021, significantly higher than the previous year [26] - The company published its first ESG report, highlighting its commitment to corporate responsibility [22] Q&A Session Summary Question: Current trialing perspective and Q2 guidance backlog conversion - Management noted that trialing improved in March, with expectations for continued improvement, but acknowledged that it is not yet at desired levels [42] Question: Size of the PDN sales force and payer coverage updates - The PDN sales force is expected to consist of 30 to 40 people, with ongoing efforts to engage payers for coverage decisions [44][48] Question: Percentage of payers expected to cover PDN by year-end - Management estimated that around 25% to 30% of total covered lives may have PDN coverage by the end of 2021, with expectations for growth in 2022 [51] Question: Omnia's market education and competitive positioning - Omnia currently accounts for 70% to 80% of total utilization, with management confident in its competitive advantages [54][56] Question: Guidance increase makeup - The guidance increase reflects optimism in core business recovery, market share capture, and contributions from PDN in the latter half of the year [58][60]