Nevro beats Boston Scientific’s patent challenges

Nevro Corp. (NYSE:NVRO) yesterday beat a pair of challenges to 1 of its patents by Boston Scientific (NYSE:BSX), after the U.S. Patent & Trademark office declined to institute inter partes reviews.

Nevro’s Senza device, which won pre-market approval from the FDA in May, is designed to deliver up to 10,000Hz to the spinal cord, allowing it to avoid the tingling sensation known as paresthesia that bothers some patients. The FDA allowed the company to label the device as superior to other spinal cord stimulators, including some made by Boston Scientific.

The patent, no. 8,359,102, covers “Selective high frequency spinal cord modulation for inhibiting pain with reduced side effects, and associated systems and methods.” Boston asked the Patent Office to review the patent a week after the FDA approved Senza; in a pair of Nov. 30 decisions, the PTO’s Patent Trial & Appeal Board found that Boston Scientific “has not demonstrated a reasonable likelihood of prevailing on its assertion.”

“The PTAB’s decision reaffirms the validity of our IP position and our ability to protect our innovations in the neuromodulation field,” Nevro CEO Michael DeMane said in prepared remarks.

The decision is “an outright victory” for Redwood City, Calif.-based Nevro, according to Leerink Partners analyst Danielle Antalffy, who predicted the win in September, and “will likely make it increasingly difficult for BSX to come to market with a high frequency device without another workaround of NVRO’s patents.”

“We did check in with BSX and, while the company will not comment on future legal strategy, BSX will run the Accelerate high frequency trial to completion – likely mid-to-late 2016. However, it’s difficult for us to see what incremental recourse BSX could have at this point to commercialize a high frequency product without infringing in some way upon one of NVRO’s 56 U.S. patents,” Antalffy wrote yesterday in a note to investors.

The 406-patient Accelerate trial, using Boston’s Precision spinal cord stimulator adapted for high-frequency therapy, is slated to be complete in October 2016, according to ClinicalTrials.gov. That means the Marlborough, Mass.-based company’s entry against Senza isn’t likely to hit the U.S. market until 2017 at the earliest.

NVRO shares closed up 10.1% at $60.40 apiece yesterday. BSX shares closed down -0.3% at $18.28 each.

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