LEADERSHIP THROUGH INNOVATION J.P. Morgan 36 th Annual Healthcare Conference January 8 th, 2018

Transcription

1 LEADERSHIP THROUGH INNOVATION J.P. Morgan 36 th Annual Healthcare Conference January 8 th, 2018

2 FORWARD LOOKING STATEMENTS SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS In addition to historical information, this presentation contains forward-looking statements with respect to our business, capital resources, strategic initiatives and growth reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including regarding continuing adoption of, and interest in, Senza in the U.S. and international markets; our beliefs regarding market size and share for Senza; our beliefs regarding the advantages of Senza and HF10 therapy; and our expectations regarding our commercialization efforts. These forward-looking statements are based upon information that is currently available to us or our current expectations, speak only as of the date hereof, and are subject to numerous risks and uncertainties, including our ability to continue to successfully commercialize our products; our ability to manufacture our products to meet demand; the level and availability of third-party payor reimbursement for our products; our ability to effectively manage our anticipated growth; our ability to protect our intellectual property rights and proprietary technologies; our ability to operate our business without infringing the intellectual property rights and proprietary technology of third parties; competition in our industry; additional capital and credit availability; our ability to attract and retain qualified personnel; and product liability claims. These factors, together with those that are described in greater detail in our Annual Report on Form 10-K filed on February 23, 2017 and our Quarterly Report on Form 10-Q filed on November 6, 2017, as well as any reports that we may file with the Securities and Exchange Commission in the future, may cause our actual results, performance or achievements to differ materially and adversely from those anticipated or implied by our forward-looking statements. We expressly disclaim any obligation, except as required by law, or undertaking to update or revise any such forward-looking statements.

3 NEVRO: A LEADER IN NEUROMODULATION DISRUPTIVE Technology Protected by 100+ Patents Differentiated Mechanism of Action Best-in-Class EVIDENCE Continue to lead in clinical effectiveness Demonstrated EXECUTION Accelerated market growth from low single digits to mid-to-high teens Growth leader among Medtech peers PLATFORM Potential 2 RCTs launched in 2017 Multiple feasibility studies underway 28,000+ Patients in 17 MARKETS Over 7 YEARS

4 A TRACK RECORD OF EXECUTION W.W. QUARTERLY REVENUE ($ IN MILLIONS) 4Q17 Preliminary Estimated Revenue $97.4M - $97.9M International Revenue U.S. Revenue $15.4 $9.7 $11.4 $11.3 $10.9 $9.7 $0.1 $4.5 $33.1 $13.3 $19.8 $41.7 $12.2 $29.5 $55.4 $14.8 $40.6 $60.9 $13.7 $47.2 $70.5 $68.4 $14.5 $15.3 $56.0 $53.1 $82.3 $78.0 $16.0 $15.0 $63.0 $66.3 $97.9* $16.9 $81.0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 *4Q17 Preliminary Estimated Revenue $ $97.9

5 A TRACK RECORD OF EXECUTION W.W. REVENUE ($ IN MILLIONS) & OPERATIONAL HIGHLIGHTS FY17 Preliminary Estimated Revenue $326.1M - $326.6M 2017 OPERATING HIGHLIGHTS International Revenue U.S. Revenue $326.6* $63.2 $ Consistent YoY Growth Two Randomized Controlled Trials (RCT) initiated Surpass surgical leads launched CE Mark for next generation Senza II $228.5 $55.2 CE Mark for Senza I Conditional Full Body MRI Achieved 70% Gross Margins in 3Q17 IPO November $32.6 $32.6 *2017 Preliminary Estimated Revenue $326.1-$326.6M US Launch June $69.6 $45.3 $24.3 $173.3 $ E 2018E FY18 Preliminary Revenue Guidance $400.0M - $410.0M Achieved positive EBITDA and operating cash flow in 3Q17, excluding litigation expense $271.4 million in cash and investments as of 9/30/17 Neurosurgery s Top Pain Paper of the Year Hired new VP of Sales

6 KEY MARKET ACCOMPLISHMENTS ~3 YEARS POST-IPO & ~2.5 YEARS POST-U.S. LAUNCH ACCELERATED MARKET GROWTH RATE from Low Single Digits to Mid-to-High teens: $2B SCS Market Today GROWTH LEADER Amongst Medtech Peers EST. U.S. SCS MARKET GROWTH RATE MEDTECH COMPS 2017 EST. AVG. REVENUE GROWTH RATE NEVRO U.S. LAUNCH 20% 50% 16% 19% 40% % 12% 15% 30% 8% 20% 22.0% 4% 0% 7% 5% 5% 4% 4% 0% E 10% 0% 11.0% 8.0% Large Cap Mid-Cap Small-Cap NVRO Source: Analyst Estimates

7 SCALING TOWARDS MARKET LEADERSHIP NEAR-TERM GROWTH OPPORTUNITIES & PRODUCT LAUNCHES CONTINUED POSITIVE UPTAKE OF EXISTING TERRITORIES Go-deep strategy in existing accounts and opening of new accounts within existing territories Continue hiring to support broader adoption CONTINUED EXPANSION INTO NEW TERRITORIES Fill remaining territories by hiring as many reps as we can efficiently hire and train 3 PRODUCT APPROVALS IN 2017, 2 U.S. PRODUCT APPROVALS EXPECTED IN 2018 Surpass Surgical Lead launched 1H17 CE Mark Senza II received 4Q17, FDA approval received in January 2018 CE Mark Senza I Full-Body MRI received 4Q17, FDA approval expected 3Q18

8 PENETRATING AND GROWING THE SCS MARKET EXPANDING MARKET TO UNDER-TREATED BACK PAIN SEGMENT OF CHRONIC PAIN PATIENT POPULATION LEG PAIN TOTAL MARKET PATIENT MIX LEG AND BACK BACK PAIN Traditional SCS Primarily Leg Pain Established Reimbursement Established Clinical Pathways HF10 Therapy

9 HF10 THERAPY ADVANTAGES THE ONLY CLINICALLY SUPERIOR PARESTHESIA-FREE SCS THERAPY SUPERIOR PATIENT OUTCOMES Clinically Meaningful Superior Pain Relief and Responder Rates BACK PAIN EFFICACY Superior Efficacy in Treatment of Back Pain 100% PARESTHESIA-FREE PAIN RELIEF No Uncomfortable Stimulation INTRAOPERATIVE WORKPLACE EFFICIENCIES More Predictable Procedures Due to Eliminating Need for Paresthesia Mapping CLINICAL EVIDENCE SUPPORT Durable Results for Back & Leg Pain Demonstrated through 24 Months

10 n (Hours) Percent Pain Relief HF10: THE BEST-IN-CLASS THERAPY HF10 CONTINUES TO LEAD IN CLINICAL EFFECTIVENESS 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Nevro HF10 Therapy (Kapural) 1000 Hz Study n Pain Relief vs. HF10 Therapy and Traditional SCS HF10 Therapy Boston Scientific Trad. SCS (Kapural) Assessment Period Pain Relief Improvement vs. Traditional SCS PROCO Study (Thomson, 2017) month Approximately 50% pain relief No High Density Case-Series (Provenzano, 2017) months Less than 50% pain relief No High Density Frequency Study (Al-Kaisy, 2016) month 42% pain relief No Salvage Study for Traditional SCS Patients (Kapural, 2016) months Traditional SCS Boston Scientific 1000 Hz (Thomson) Medtronic High Density (Provenzano) 1000 Hz Therapy NO IMPROVEMENT VS TRADITIONAL SCS Medtronic High Density (Al-Kaisy) Boston Scientific 1000 Hz (North) Inadequate relief (67% of patients abandoned 1000 Hz by one week, 98% abandoned by 1 year) St. Jude SUNBURST St. Jude SUNBURST WHISPER Feasibility Study (North, 2015) months 45% average pain relief No 1. Nevro patient satisfaction survey n=2963 patients 2. Schultz DM, et al. Sensor-driven position-adaptive spinal cord stimulation for chronic pain. Pain Physician Jan-Feb;15(1): St. Jude Medical Proclaim Implantable Pulse Generator Clinician's Manual, Models 3660, 3662, 3665, Published on October No HF10 THERAPY <1 Patient Remote Control Interactions Per Week PARESTHESIA-BASED THERAPIES 215 Patient Remote Control Interactions Per Week 1 WEEKLY CHARGE BURDEN High Density 2 Boston Scientific 1000 Hz 2 HF10 Therapy

11 HF10 OPERATES WITH A DIFFERENT MECHANISM Frequency Matters: Paresthesia-Free & Paresthesia-Independent Sham 1000 Hz 10 KHz Baseline Sham 1200 Hz 3030 Hz 5882 Hz 10 KHz SIGNIFICANT REDUCTION OF NEURAL ACTIVITY DEMONSTRATED WITH 10 KHZ STIMULATION CORRELATION BETWEEN FREQUENCY AND INCREASED PAIN RELIEF Test methodology: in rodents, response to painful wind up paw stimulation was measured before and after SCS. SCS frequencies of 10 khz and 1000 Hz were applied for 90 minutes and compared to 0mA stimulation (Sham). Median Change in Total Windup Response at 90 Minutes Shown 1. McMahon, S. Effects of 10-kHz Spinal Cord Stimulation on the Excitability of Superficial Dorsal Horn Neurons in Experimental Pain Models in the Rat. Poster shown at INS 2017 in Edinburgh. 2. Adnan Al-Kaisy MD. Preliminary results from a randomized, shamcontrol, double blind, cross-over trial of sub-threshold spinal cord stimulation at various kilohertz frequencies (SCS Frequency Study). Poster presented at Neurovations Kapural L, et al. Comparison of 10-kHz High- Frequency and Traditional Low- Frequency Spinal Cord Stimulation for the Treatment of Chronic Back and Leg Pain: 24-month Results from a Multicenter, Randomized, Controlled Pivotal Trial. Neurosurgery. Published

12 DELIVERING ON QUALITY OF LIFE IMPROVEMENTS COMMERCIAL FEEDBACK COLLECTED FROM 7,800 PATIENTS How likely are you to recommend Nevro to someone who has similar pain? How often do you use your remote control to adjust your therapy? Likely or very likely Not sure Unlikely or very unlikely 5% 12% 83% 83% likely or very likely to recommend HF10 therapy Never Once per week or less often 2-3 times per week Daily 3% 13% 35% 49% 84% use remote less than once per week Number of Responses n = 7,668 Number of Responses n = 7,768 Since having your device, how would you describe the change in activity limitations, symptoms, emotions and overall quality of life? How would you rate the Nevro device in comparison to the previous SCS you experienced? (if the Patient had SCS prior to Nevro) A great deal better 56% Moderately better No change 14% 30% 86% cite an improvement A great deal better 76% Moderately better No change Number of Responses n = 7,779 Number of Responses n = % 14% 86% of failed SCS patients rate HF10 therapy better On average commercial calls are made 7.7 months after perm procedure (range is between 0 and 26 months)

13 Individual Patients HF10 IMPACT ON PHYSICIAN PRACTICES REAL WORLD OUTCOMES: A HIGH VOLUME, TERTIARY ACADEMIC MEDICAL CENTER PRIOR TO HF10 THERAPY We were good at controlling pain, but had space for improvement SCS most frequently used in patients with leg pain > back pain Procedure times were unpredictable WITH HF10 THERAPY Improved outcomes in complex pain Consistent and significant reduction of both leg and back pain Consistent procedure times Paresthesia-free Metric Result Number of patients trialed 136 Percent Prior SCS patients 27% Responder rates of trial patients 91% Average Starting Pain Score 8.1 Average Pain Score At End of Trial 2.4

14 % Patients Not on Opioids Mean Morphine Equivalent Per Patient HF10: DEMONSTRATING AN IMPACT ON OPIOID USE DECREASED OPIOID USE IN SENZA-EU TRIAL WITH HF10 THERAPY AFTER TWO YEARS 3X the number of patients off opioids 3x increase 43% nearly avg. reduction of 70% opioid intake 84 mg 68% reduction in dose 14% 27 mg Baseline (n=72) 24 Month (n=65) Baseline (n=72) 24 Month (n=65) p-value < compared to baseline p-value < compared to baseline Evidence-based, non-pharmacologic neuromodulation platform for the treatment of chronic pain Al-Kaisy A, Van Buyten JP, Smet I, Palmisani S, Pang D, Smith T. Sustained effectiveness of 10 khz high-frequency spinal cord stimulation for patients with chronic, low back pain: 24-month results of a prospective multicenter study. Pain Med Mar; 15(3): Epub 2013 Dec 5. doi: /pme

15 DELIVERING ON THE PROMISE OF HF10: INDICATION EXPANSION CLINICAL ROADMAP CONTINUED MARKET EXPANSION IN BACK & LEG EXPANDING PAIN-RELATED INDICATIONS INVESTIGATE BROADER INDICATIONS Back & Leg Pain e.g., Upper Limb & Neck Pain, Painful Neuropathies, Non-Surgical Refractory Back Pain e.g., Deep Brain Stimulation Clinical efficacy for back pain Superior long-term outcomes Translating clinical outcomes commercially Intraoperative efficiencies Expanding existing reimbursement or labeling Efficacy and publications to drive adoption New sales force and/or new reimbursement codes Demonstration of clinical meaningfulness Assessing multiple new indications

16 DEDICATED TO EXPANDING THE SCOPE OF NEUROMODULATION Multiple feasibility studies and 2 RCTs initiated across a variety of pain areas and indications Multi-staged approach for new label or broader reimbursement Established Evidence Back Pain SENZA-RCT Leg Pain SENZA-RCT *Investigational only not on-label or indicated for use. Emerging Evidence Neck Pain* SENZA-ULN Upper Limb Pain SENZA-ULN Chronic Abdominal Pain* SENZA-CAP Post-Surgical Pain SENZA-CPSP Painful Diabetic Neuropathy SENZA-PDN Peripheral Polyneuropathy SENZA-PPN Small Pilot or Feasibility Study Validate market need through enrollment rates Assess efficacy signal is differentiated Optimize treatment algorithm Large Randomized Controlled Trial (RCT) Build Level I Clinical Evidence Broaden market access Develop support for new indications

17 HF10: PROGRESS IN PIPELINE INDICATIONS BACK PAIN LEG PAIN NON-SURGICAL BACK PAIN NECK PAIN UPPER LIMB PAIN PAIN REDUCTION IN PROSPECTIVE SCS TRIALS HF10 Therapy (SENZA-EU) 24 months (N=65) 1 HF10 Therapy (SENZA-RCT) 24 months (N=85) 2 HF10 Therapy (SENZA-RCT) 24 months (N=85) 2 HF10 Therapy (Al-Kaisy Virgin Back Study) 36 months (N=17) 3 HF10 Therapy (ULN-US Study) 12 months (N=15) 4 HF10 Therapy (ULN-AUS Study) 12 months (N=22) 4 HF10 Therapy (ULN-US Study) 12 months (N=9) 4 HF10 Therapy (ULN-AUS Study) 12 months (N=14) 4 PERIPHERAL NEUROPATHIC PAIN ABDOMINAL PAIN HF10 Therapy (PPN Study) 6 months (N=17) 4 HF10 Therapy (PPN Study) Painful Diabetic Neuropathy subset 6 months (N=7) 4 HF10 Therapy (ABDOMINAL Study) 12 months (N=9) 4 0 (No Pain) VAS (cm) 1. Al-Kaisy A, et al. Sustained effectiveness of 10 khz high-frequency spinal cord stimulation for patients with chronic, low back pain: 24-month results of a prospective multicenter study. Pain Med. 2014;15: Kapural L, et al. Comparison of 10-kHz High-Frequency and Traditional Low-Frequency Spinal Cord Stimulation for the Treatment of Chronic Back and Leg Pain: 24-month Results from a Multicenter, Randomized, Controlled Pivotal Trial. Neurosurgery. Published [Epub ahead of Print]. 3. Al-Kaisy, Adnan, Palmisani, Stefano, Smith, Thomas E. Carganillo, Roy, Houghton, Russell, Pang, David, Burgoyne, William, Lam, Khai, Lucas, Jonathan. Long-Term Improvements in Chronic Axial Low Back Pain Patients Without Previous Spinal Surgery: A Cohort Analysis of 10-kHz High-Frequency Spinal Cord Stimulation over 36 Months. Pain Medicine 2017; 0: Internatl data on file to be presented at NANS SENZA-ULN, ULN-AUS,PPN Feasibility. Studies ongoing. N s do not reflect total sample size. 10 (Worst Pain)

18 VAS (cm) UPPER LIMB & NECK (ULN): SENZA-ULN INTERIM 12 MONTH DATA CLINICAL TRIAL OF THE SENZA SCS SYSTEM IN THE TREATMENT OF CHRONIC UPPER LIMB & NECK PAIN Pain Reduction Upper Limb Neck Follow-up (Months) 100% 80% 60% 40% 20% 0% Responder Rates All Upper Limb Neck 100% 95% 93% 93% 83% 83% 83% 79% 79% Follow-up (Months) Chronic persistent neck pain with or without upper extremity pain is common in the general adult population with persistent complaints in 22% of women and 16% of men (1) Limited Treatment Options (1) 25-40% of subjects do not respond to epidural steroid injections (2) Pain Location Baseline (n) 3 Months (n) 6 Months (n) 12 Months (n) Upper Limb Neck Diwan, Sudhir A., Manchikanti, Laxmaiah, Benyamin, Ramsin M., Bryce, David A. Geffert, Stephani, Hameed, Haroon, Lal Sharma, Manohar, Abdi, Salahadin, Falco, Frank J.E. Effectiveness of Cervical Epidural Injections in the Management of Chronic Neck and Upper Extremity Pain. Pain Physician 2012; 15:E405-E Choi, Ji Won, Lim, Hyung Woo, Lee, Jin Young, Lee, WonIl, Lee, Eun Kyung, Chang, Choo Hoon, Yang, Jae Young, Sim, Woo Seog. Effect of Cervical Interlaminar Epidural Steroid Injection: Analysis According to Neck Pain Patterns and MRI Findings. Korean J Pain Apr; 29(2):

19 Pain (VAS score) PAINFUL DIABETIC NEUROPATHY (PDN): SENZA-PDN APPROXIMATELY 65-75% OF PDN PATIENTS DISCONTINUE COMMON PDN OPTIONS PAIN REDUCTION 2.3 PPN PDN Assessment (months) SENZA-PDN: Randomized Controlled Trial Design (RCT) HF10 Combined with Conventional Medical Management (CMM) vs. CMM Alone Prospective, multicenter, randomized, controlled trial Estimated Enrollment: Up to 360 patients % 80% 60% 40% 20% 0% Endpoints RESPONDER RATES PPN PDN 86% 86% 78% 76% month primary endpoint, compare responder rates (>= 50% pain relief) and safety rates between treatment groups 24 month follow-up Date collected: Pain VAS, neurological assessment, health-related quality of life, sleep quality, patient satisfaction 30.3 million (9.4%) US population had diabetes in 2015 (2) ~6 million (20%) of diabetic patients will develop PDN (3) Approximately 40-50% and 65-75% of patients discontinue common PDN medications, including Cymbalta, Neurotin and Lyrica, in 3 months and 12 months of prescription, respectively (1) 1. Yang M et al. Pain Med 2015;16: Schmader KE. Clin J Pain 2002 Nov-Dec;18(6):350-4

20 VAS Score (0-100 mm) ODI Score (0-100) NON-SURGICAL REFRACTORY BACK PAIN (NSRBP): SENZA-NSRBP POSITIVE RESULTS FROM LONG-TERM STUDY Year Study Results (1) VAS BACK VAS LEG Axial back pain without compressive component. Example: Degenerative Disc Disease (DDD) Baseline (n=20) 3 mo. (n=20) 6 mo. (n=20) 9 mo. 12 mo. (n=20) (n=20) Time Point 24 m0. (n=18) 36 mo. (n=17) 12% using opioids 95% trial to permanent rate 80% responder rate at 3 years compared to 90% at baseline Randomized Controlled Trial Design to Compare HF10 Combined with Conventional Medical Management (CMM) vs. CMM Alone Prospective, multicenter, randomized, controlled trial Estimated Enrollment: Up to 300 patients Baseline (n=20) 3 mo. (n=20) 6 mo. (n=20) 9 mo. 12 mo. (n=20) (n=20) Time Point 24 m0. (n=18) 36 mo. (n=17) Endpoints 3 month primary endpoint, compare responder rates (>= 50% pain relief) and safety rates between treatment groups 12 month follow-up Date collected: Pain, Disability, Quality of Life, Patient and Clinician Global Impression of Change (PGIC), Satisfaction, Sleep PSQ-3, Health Economic Outcomes Based on spine or neurosurgeon s assessment of MRI, no current indication for referral for back surgery 50% success rate in randomized trials for lumbar artificial discs and fusion surgery for DDD (2) 1. Al-Kaisy, Adnan, Palmisani, Stefano, Smith, Thomas E. Carganillo, Roy, Houghton, Russell, Pang, David, Burgoyne, William, Lam, Khai, Lucas, Jonathan. Long-Term Improvements in Chronic Axial Low Back Pain Patients Without Previous Spinal Surgery: A Cohort Analysis of 10-kHz High-Frequency Spinal Cord Stimulation over 36 Months. Pain Medicine 2017; 0: Deyo, Richard A. Fusion surgery for lumbar degenerative disc disease: still more questions than answers. The Spine Journal 15 (2015)

21 NEVRO: A LEADER IN NEUROMODULATION DISRUPTIVE Technology Protected by 100+ Patents Differentiated Mechanism of Action Best-in-Class EVIDENCE Continue to lead in clinical effectiveness Demonstrated EXECUTION Accelerated market growth from low single digits to mid-to-high teens Growth leader among Medtech peers PLATFORM Potential 2 RCTs launched in 2017 Multiple feasibility studies underway 28,000+ Patients in 17 MARKETS Over 7 YEARS