Nevro losses shrink, sales explode in Q2

Nevro Corp. (NYSE:NVRO) saw shares soar after reporting a significant 2nd quarter yesterday, with losses shrinking by more than 50% while sales exploded nearly 400%, causing the company to lift its guidance for the full year.

The Redwood City, Calif.-based company reported losses of $8.8 million, or 31¢ per share, on sales of $55.4 million for the 3 months ended June 30. That amounts to a 55.5% reduction in losses as sales grew a whopping 385% compared with the same period last year.

Analysts on Wall Street were looking for the company to post losses per share of 47¢ with revenue of $47 million for the quarter, both of which Nevro managed to top.

Shares in Nevro have soared after the release, rising 16.8% to close at $94.56.

“I am excited by our progress in becoming a leader in Neuromodulation. Our focus on improving patient outcomes continues to guide our research and commercial efforts, and we are well-positioned for sustainable success.  With global adoption broadening, two-year evidence supporting the superiority of HF10 therapy accepted for publication, and growth of our team, we are raising our revenue expectations for 2016,” CEO Rami Elghandour said in a press release.

The company significantly expanded its revenue expectations for the full year 2016, expecting revenue in the range of $210 million to $220 million. That’s a healthy step up from the $175 million to $185 million it previously expected to see during the year.

In June, shares in Nevro took a big hit after investors learned that a pair of insurers in Pennsylvania and Tennessee tagged therapy using its Senza spinal cord stimulation device as experimental.

The Senza device, which won an FDA nod in May 2015, is designed to deliver high-frequency electrical impulses of up to 10,000Hz  to the spinal cord to avoid the tingling sensation known as paresthesia that bothers some SCS patients. The FDA approval allows Redwood City, Calif.-based Nevro to label the device’s HF10 therapy as superior to conventional spinal cord stimulators.

But effective July 25, Highmark Blue Shield will consider HF10 therapy as experimental and investigational for all indications, drawing criticism from a medical society and prompting investors to send NVRO share prices down nearly -3% yesterday, to a $70.03 close.

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