Nevro gains on FDA pending approval with the resolution of manufacturing, labeling issues

Stenza spinal cord stimulation system--Screenshot courtesy of Nevro

Recent med tech IPO success story Nevro ($NVRO) has garnered an approvable letter from the FDA for its Senza spinal cord stimulation system to treat chronic pain, according to the company. Nevro said it needs to address manufacturing and product labeling issues in order to attain FDA approval.

The company's share price ran up to $37 from its early November IPO price of $15 ahead of the approvable announcement. Its shares jumped an additional 20% in early trading on the news to almost $45, giving it a market cap of about $1.1 billion.

The company expects to secure an FDA approval and to make Senza available in the U.S. by mid-2015. Nevro had laid out an early 2016 timeframe for a Senza launch in the U.S. in an SEC filing for its IPO. Senza has had a CE mark since 2010.

More than 2,500 patients have been implanted with the Senza system. Nevro had $22.9 million in revenues during the first nine months of 2014, with an operating loss of $21.2 million. The company needs the U.S. market and to move into additional indications in order to ramp up revenues.

According to the company, the FDA approvable letter specifically said PMA approval for Senza is pending the "satisfaction of regulatory inspections and audits of manufacturing facilities, methods and controls for Senza to ensure compliance with the FDA's Quality System Regulation, as well as finalization of the product's labeling with the FDA."

The company's IPO raised $131 million and it also recently secured a $50 million credit facility, so it has ample cash in hand to prepare for a U.S. launch.

Nevro expects to hire 30 to 40 sales reps ahead of FDA approval and has already started to hire them, the company said on a conference call about the approvable letter. It didn't provide a specific timeline for addressing the agency's concerns, but said that a normal audit process that takes "multiple weeks."

Nevro completed the pivotal trial to support a U.S. approval in March. It said this study is the first comparative, prospective randomized pivotal trial to study a spinal cord stimulation device.

Senza met all primary and secondary endpoints in that non-inferiority trial of Senza against traditional SCS systems. In the study, 84.3% of patients with Senza reported 50% or more back pain relief after three months, while traditional SCS therapy achieved that benchmark in 43.8% of patients. In a similar measure of leg pain, 83.1% of patients reported relief at three months, compared to 55.5% of traditional SCS patients. Senza was statistically superior in a post-hoc analysis of both these data sets.

The device is based on Nevro's HF10 therapy technology that gives electrical pulses to the spinal cord at a rate up to 10,000 per second (10 kHz), as compared to traditional SCS, which utilizes low frequency stimulation, typically between 40 Hz and 60 Hz. Senza also doesn't have the side effect of paresthesia, a patient perception of pain with a tingling or buzzing sensation that is common with traditional SCS.

"We are very pleased with the outcome and we are working to satisfy the conditions of approval. We anticipate initial commercial availability in the United States by mid-2015," Nevro chairman and CEO Michael DeMane said on the conference call.

• here is the release

Special Report: Nevro – 2012 Fierce 15