NeuroPace Reports Third Quarter 2022 Financial Results and Provides a Business Update
08 Noviembre 2022 - 3:03PM
NeuroPace, Inc. (Nasdaq: NPCE), a commercial-stage medical device
company focused on transforming the lives of people suffering from
epilepsy, today reported financial results for the quarter ending
September 30, 2022.
Recent Highlights
- Achieved total revenue of $11.2
million for the third quarter of 2022, representing growth of 8%
compared to the third quarter of 2021 and 9% compared to the second
quarter of 2022
- Achieved initial implant revenue of
$9.2 million for the third quarter of 2022, representing growth of
18% compared to the third quarter of 2021 and 15% compared to the
second quarter of 2022
- Initiated distribution of DIXI
Medical’s stereo EEG product portfolio to epilepsy monitoring
units, or EMUs, on October 1, 2022
- Implanted the first patient with
the RNS System in the NAUTILUS pivotal study for primary
generalized epilepsy
“Our third quarter results demonstrated
increased adoption of the RNS System,” said Mike Favet, Chief
Executive Officer of NeuroPace. “We are encouraged by the
increasing awareness of the clinical benefits and differentiated
features of RNS and what we believe are sustained improvements in
the EMU operating environment. In addition, we are excited about
our initial distribution activity of DIXI Medical stereo EEG
electrodes. We believe continued commercial execution will drive
increasing utilization of our technology within comprehensive
epilepsy centers and their EMUs.”
Third Quarter 2022 Financial
ResultsTotal revenue was $11.2 million in the third
quarter of 2022, representing growth of 8% compared to the prior
year period and 9% compared to the prior quarter. Initial implant
revenue was $9.2 million, growth of 18% compared the prior year
period and 15% sequentially. Replacement implant revenue was $1.9
million, compared to $2.5 million in the prior year period.
Replacement implant revenue will generally continue to decrease
until a significant number of devices with the longer lasting
battery reach end of service. More than 90% of patients have had
their NeuroPace device replaced when the battery reaches end of
service, so replacement implant revenue is primarily a function of
when the batteries in the previously implanted devices reach end of
service.
Gross margin for the third quarter of 2022 was
71% compared to 73% in the third quarter of 2021. The decline in
gross margin was primarily due to a short-term supply chain
disruption, which was resolved during the third quarter.
Total operating expenses in the third quarter of
2022 were $18.2 million, compared with $13.8 million in the prior
year period. R&D expense in the third quarter was $5.6 million
compared with $4.3 million in the prior year period. The increase
in R&D expense was primarily driven by an increase in personnel
related expenses, product development, and clinical study expenses.
SG&A expense in the third quarter of 2022 was $12.6 million
compared with $9.4 million in the prior year period. The increase
in SG&A expense was primarily driven by personnel related
expenses and increased sales and marketing costs to support
commercial expansion initiatives.
Net loss was $11.8 million for the third quarter
of 2022, compared to a net loss of $8.1 million in the prior year
period. Interest expense in the third quarter of 2022 was $1.9
million, compared to $1.8 million in the prior year period.
Cash, cash equivalents and marketable securities
were $85.4 million down from $92.4 million as of June 30, 2022, and
long-term borrowings were $52.0 million as of September 30,
2022.
Updated 2022 Financial
Guidance
- Total revenue of $44.5 million to
$45.5 million compared to the previous expectation of $43 million
to $45 million
- Initial implant revenue of $35
million to $36 million compared to the previous expectation of $34
million to $36 million
- Replacement implant revenue of
nearly $8 million compared to the previous expectation of $7.5
million
- DIXI Medical revenue of
approximately $1.5 million, expected in the fourth quarter of
2022
- Gross margin in the low 70%
range
- Total operating expenses of $74
million to $75 million, which includes approximately $8 million to
$9 million of non-cash stock-based compensation expense and
approximately $1 million of DIXI launch related expenses in the
fourth quarter
Webcast and Conference Call
InformationNeuroPace will host a conference call to
discuss the third quarter 2022 financial results after market close
on Tuesday, November 8, 2022, at 4:30 P.M. Eastern Time.
Investors interested in listening to the
conference call may do so by accessing a live and archived webcast
of the event at www.neuropace.com, on the Investors page in the
News & Events section. The webcast will be available for replay
for at least 90 days after the event.
About NeuroPace, Inc. Based in
Mountain View, Calif., NeuroPace is a commercial-stage medical
device company focused on transforming the lives of people
suffering from epilepsy by reducing or eliminating the occurrence
of debilitating seizures. Its novel and differentiated RNS System
is the first and only commercially available, brain-responsive
platform that delivers personalized, real-time treatment at the
seizure source. This platform can drive a better standard of care
for patients suffering from drug-resistant epilepsy and has the
potential to offer a more personalized solution and improved
outcomes to the large population of patients suffering from other
brain disorders.
Forward Looking StatementsIn
addition to background and historical information, this press
release contains “forward-looking statements” based on NeuroPace’s
current expectations, forecasts and beliefs, including the
statements related to EMU patient volume trends, drivers of
replacement implant revenue, the DIXI Medical partnership, and
under the caption “Updated 2022 Financial Guidance” above. These
forward-looking statements are subject to inherent uncertainties,
risks, and assumptions that are difficult to predict. Actual
outcomes and results could differ materially due to a number of
factors, including the ongoing uncertainty of the impact of the
COVID-19 pandemic, as well as COVID recovery impact, on its
business. These and other risks and uncertainties include those
described more fully in the section titled “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operation” and elsewhere in its public filings with the
U.S. Securities and Exchange Commission (SEC), including its Annual
Report on Form 10-K for the year ended December 31, 2021 filed with
the SEC on March 10, 2022 and its quarterly report on Form 10-Q to
be filed with the SEC on November 8, 2022, as well as any reports
that it may file with the SEC in the future. Forward-looking
statements contained in this announcement are based on information
available to NeuroPace as of the date hereof. NeuroPace undertakes
no obligation to update such information except as required under
applicable law. These forward-looking statements should not be
relied upon as representing NeuroPace’s views as of any date
subsequent to the date of this press release and should not be
relied upon as a prediction of future events. In light of the
foregoing, investors are urged not to rely on any forward-looking
statement in reaching any conclusion or making any investment
decision about any securities of NeuroPace.
Investor Contact:Gilmartin GroupPhilip
Taylorinvestors@neuropace.com
NeuroPace, Inc.Condensed
Statements of Operations(unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in thousands, except share and per share amounts) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenue |
$ |
11,157 |
|
|
$ |
10,339 |
|
|
$ |
32,731 |
|
|
$ |
34,186 |
|
Cost of goods sold |
|
3,192 |
|
|
|
2,832 |
|
|
|
9,041 |
|
|
|
8,827 |
|
Gross profit |
|
7,965 |
|
|
|
7,507 |
|
|
|
23,690 |
|
|
|
25,359 |
|
Operating
expenses |
|
|
|
|
|
|
|
Research and development |
|
5,611 |
|
|
|
4,329 |
|
|
|
16,857 |
|
|
|
12,866 |
|
Selling, general and
administrative |
|
12,553 |
|
|
|
9,421 |
|
|
|
37,768 |
|
|
|
27,215 |
|
Total operating expenses |
|
18,164 |
|
|
|
13,750 |
|
|
|
54,625 |
|
|
|
40,081 |
|
Loss from operations |
|
(10,199 |
) |
|
|
(6,243 |
) |
|
|
(30,935 |
) |
|
|
(14,722 |
) |
Interest income |
|
423 |
|
|
|
136 |
|
|
|
778 |
|
|
|
262 |
|
Interest expense |
|
(1,906 |
) |
|
|
(1,826 |
) |
|
|
(5,588 |
) |
|
|
(5,548 |
) |
Other income (expense),
net |
|
(103 |
) |
|
|
(150 |
) |
|
|
(191 |
) |
|
|
(5,379 |
) |
Net loss |
$ |
(11,785 |
) |
|
$ |
(8,083 |
) |
|
$ |
(35,936 |
) |
|
$ |
(25,387 |
) |
Net loss per share attributable to common stockholders, basic and
diluted |
$ |
(0.48 |
) |
|
$ |
(0.34 |
) |
|
$ |
(1.47 |
) |
|
$ |
(1.81 |
) |
Weighted-average shares used
in computing net loss per share attributable to common
stockholders, basic and diluted |
|
24,728,701 |
|
|
|
24,101,399 |
|
|
|
24,514,820 |
|
|
|
14,061,958 |
|
NeuroPace, Inc.Condensed
Balance Sheets(unaudited)
|
September 30, |
|
December 31, |
(in thousands, except share
and per share amounts) |
|
2022 |
|
|
|
2021 |
|
Assets |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ |
5,688 |
|
|
$ |
19,187 |
|
Short-term investments |
|
79,724 |
|
|
|
96,397 |
|
Accounts receivable |
|
7,876 |
|
|
|
7,091 |
|
Inventory |
|
8,581 |
|
|
|
7,822 |
|
Prepaid expenses and other current assets |
|
2,501 |
|
|
|
2,319 |
|
Total current assets |
|
104,370 |
|
|
|
132,816 |
|
Property and equipment,
net |
|
894 |
|
|
|
603 |
|
Operating lease right-of-use
asset |
|
15,067 |
|
|
|
— |
|
Restricted cash |
|
122 |
|
|
|
122 |
|
Other assets |
|
21 |
|
|
|
21 |
|
Total assets |
$ |
120,474 |
|
|
$ |
133,562 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
Current liabilities |
|
|
|
Accounts payable |
$ |
1,175 |
|
|
$ |
1,378 |
|
Accrued liabilities |
|
7,550 |
|
|
|
7,923 |
|
Operating lease liability |
|
692 |
|
|
|
— |
|
Total current liabilities |
|
9,417 |
|
|
|
9,301 |
|
Deferred rent, noncurrent |
|
— |
|
|
|
911 |
|
Long-term debt |
|
51,954 |
|
|
|
49,847 |
|
Operating lease liability, net
of current portion |
|
15,694 |
|
|
|
— |
|
Total liabilities |
|
77,065 |
|
|
|
60,059 |
|
Stockholders’ equity |
|
|
|
Common stock, $0.001 par value |
|
25 |
|
|
|
24 |
|
Additional paid-in capital |
|
504,425 |
|
|
|
497,522 |
|
Accumulated other comprehensive income |
|
(1,334 |
) |
|
|
(272 |
) |
Accumulated deficit |
|
(459,707 |
) |
|
|
(423,771 |
) |
Total stockholders’ equity |
|
43,409 |
|
|
|
73,503 |
|
Total liabilities and stockholders’ equity |
$ |
120,474 |
|
|
$ |
133,562 |
|
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