Nevro snags best-in-class label for spine stimulator
After Nevro’s stock rose nearly 20% in January when the FDA said its spinal cord stimulator was approvable, it might have been reasonable to assume that the approval itself was priced in to the shares. Not so; the company was up 18% yesterday, thanks to the approval arriving earlier than expected and with a highly advantageous label.
The Senza implantable neurostimulator is now set to capture a “meaningful share” of the US market, according to analysts at JMP Securities, despite being in contention against the very biggest players. This is a huge win for Nevro, but the magnitude of its success will depend on exactly how neurologists choose to use the device.
The Senza device has been approved as a therapy for chronic intractable pain of the trunk or limbs, including that associated with failed back surgery. This was expected after the FDA sent Nevro an approvable letter at the beginning of the year – but the approval has come two months earlier than anticipated (Nevro approaches US with first novel spinal cord device in a decade, January 23, 2015).
It has also come with a best-in-class label. Senza’s approval trial, Senza-RCT, was intended to prove the stimulator to be non-inferior to Boston Scientific’s FDA-approved Precision Plus system, and this endpoint was duly met. In the intent-to-treat population, 76% of patients treated with Senza achieved a 50% reduction in back pain from baseline at three months compared with 38% in the control group.
A post hoc analysis of Senza-RCT, however, found evidence for superiority. Post hoc analyses usually do not weigh with the FDA, but the agency seems to have been won over this time, awarding the device a specific superiority claim.
Moreover, the FDA has agreed that the device does not cause paraesthesia, a persistent and often highly annoying tingling sensation.
Discomfort resulting from the tingling sensation is fairly widespread. In Senza-RCT, no patients in the treatment group felt any paraesthesia at either three or 12 months post-implant. In the control arm, 46.5% and 44.4% of patients reported feeling uncomfortable stimulation at three and 12 months, respectively.
Senza is also the only spinal cord stimulator approved without restrictions on patients driving while receiving therapy, and the only one allowing recipients to undergo 3 Tesla MRI. While most MRI systems operate with a magnetic field strength of 1.5 Tesla, 3 Tesla devices are becoming more common. Compared with the claim of superior efficacy, though, these are minor advantages.
Quite the buzz
Everything now depends on how doctors use it. If it is markedly more expensive than existing spinal simulators it might be second choice, with neurologists choosing to give patients a cheaper older model and see if they object to the tingling. Nevro has not released any information on pricing, but if an FDA-mandated superiority claim is not a reason to charge a premium it is hard to imagine what is.
Still, applying electrical cords to the spine is a delicate procedure and not lightly done. Doctors may opt for Senza first, cost notwithstanding, as a means of avoiding a second procedure.
The company is to start shipping the device in two weeks, and has hired around 50 US salespeople to get the job done. JMP Securities analysts point out that the opportunity is large, with the markets for leg pain and back pain worth around $1.5bn each.
It is up against some serious muscle, with Medtronic, St. Jude Medical and Johnson & Johnson all active in spinal stimulation. Medtronic’s 2020 spinal stimulation sales are forecast to top $1bn, EvaluateMedTech data show.
Nevro will not be able to hit these heights. But it has been a startling success, with its share price up nearly 200% since its IPO in November (Tripling of medtech IPO yield points to changing industry, January 12, 2015).
Even at its new market valuation of $1.3bn, the company has to be a takeover target. Medtronic – or rather Covidien, before it was folded into the world’s biggest medtech player – was a venture investor in Nevro, and so was J&J. They will already have made a tidy return from the company, and could well seek to reap more by bringing the Senza technology in house.
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