On April 1, 2020 Nevro Corp. (NYSE: NVRO), a global medical device company that is providing innovative, evidence-based solutions for the treatment of chronic pain, reported preliminary unaudited worldwide revenue for the quarter ended March 31, 2020 and the withdrawal of its full year 2020 financial guidance issued on February 25, 2020 (Press release, Nevro, APR 1, 2020, View Source [SID1234556079]). In addition, the Company provided an update on the actions it is taking in response to the COVID-19 pandemic.

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First Quarter 2020 Update
Preliminary unaudited first quarter 2020 worldwide revenue is expected to be in the range of $86.4 to $86.9 million, a 5-6% increase compared to $82.1 million in the first quarter of 2019. First quarter 2020 revenue was negatively impacted by a rapid deceleration in March due to COVID-19 shelter-in-place policies and restrictions on elective surgical procedures around the world.

Preliminary unaudited first quarter 2020 U.S. revenue is expected to be $74.9 to $75.2 million, a 14% increase compared to $65.8 million in the prior year period. Year-over-year, U.S. trial growth was 6% and permanent implant growth was 12% during the first quarter of 2020. U.S. trial growth was 20% and permanent implant growth was 29% for the two months ended February 29, 2020, compared to the prior year period. Cases totaling approximately $16.5 million were cancelled during the month of March 2020.

Preliminary unaudited first quarter 2020 international revenue is expected to be $11.5 to $11.7 million, a decrease of 29% to 30% as reported, compared to $16.3 million in the prior year period. The decrease in international revenue was primarily due to the impact of COVID-19 related government restrictions on elective procedures implemented in Europe and Australia during the latter half of the quarter.

Preliminary unaudited first quarter 2020 operating expenses are expected to be at or below approximately $90 million.

Full Year 2020 Financial Guidance
Due to the rapidly evolving environment and continued uncertainties resulting from the impact of COVID-19, Nevro is withdrawing its previously announced annual guidance for 2020, which was issued on February 25, 2020. At this date, Nevro cannot predict the extent or duration of the impact of the COVID-19 virus on its financial and operating results, but the Company believes the shelter-in-place policies and suspension of elective procedures worldwide will substantially impact revenue in the second quarter of 2020. As of December 31, 2019, Nevro had approximately $238 million in cash, cash equivalents and short-term investments. Nevro intends to maintain the strength of its commercial organization in preparation for what the Company believes could be an active recovery period in the second half of 2020 and early 2021. Nevro plans to provide additional information, to the extent practicable, during its first quarter earnings call in early May.

COVID-19 Updates
"We are grateful to the healthcare professionals around the world who are tirelessly caring for patients on the front lines of this pandemic, and our thoughts go out to all who have been affected," said D. Keith Grossman, Chairman, CEO and President of Nevro. "During this challenging time, we have proactively implemented multiple initiatives to support our customers, patients and employees as well as preserve our future business growth opportunities. Prior to COVID-19, our sales in the first two months of the year were ahead of our expectations and we believe the initiatives we’ve put in place will enable us to reemerge from this global health crisis in a position of strength. We expect that our unique ability to capture patient scheduling and outcomes data with NevroCloud will enable us to proactively support our patients’ progress for our customers throughout this crisis. More than 3,000 patients have recently had trials in the U.S. with the Company’s products and many of those patients are now awaiting permanent implants. We stand ready to help our customers return to growth as soon as the ability to perform elective procedures is restored."

As a medical device company that provides implantable devices and on-site support to physicians in hospitals, surgery centers and private practices, Nevro’s highest priority is the health and safety of healthcare professionals, patients and employees. In response to this global pandemic, the Company has quickly responded in recent weeks to help protect its communities while continuing to support customers and maintain its business:

Health and Safety. To protect the health and safety of Nevro customers, their patients and employees, the Company has implemented the latest recommendations from public health authorities worldwide. The Company has restricted business-related travel and has asked all employees who can work from home to do so until further notice.
Maintaining Nevro’s ‘Patient First’ Commitment. Nevro remains fully committed to helping patients who suffer from chronic debilitating pain, as well as its physician customers who care for them. The Company has built an effective patient care infrastructure with phone-based therapy support specialists, field-based sales and clinical support teams. All of the Company’s patient-support teams remain available to support customers and patients, while following applicable restrictions, safety precautions and procedures.
Operating Nevro’s Business. Nevro believes its fundamental business opportunity remains unchanged and that the strong momentum from its growth drivers, such as its proprietary HF10 therapy and the recent Senza Omnia product launch, will be regained when the ability to perform elective procedures returns. The Company remains focused on managing expenses and driving operating efficiency in our business. Future growth drivers such as the current trials to support expanded use in PDN (Painful Diabetic Neuropathy) and NSRBP (Non-Surgical Refractory Back Pain) will continue to move forward as well.

On April 1, 2020 Nevro Corp. ("Nevro") (NYSE: NVRO), a global medical device company that is providing innovative, evidence-based solutions for the treatment of chronic pain, reported that it has commenced a proposed underwritten public offering of 1,625,000 shares of its common stock (the "common stock offering") and $165,000,000 aggregate principal amount of its convertible senior notes due 2025 (the "notes") (the "notes offering") (Press release, Nevro, APR 1, 2020, View Source [SID1234556078]). All of the shares of common stock to be sold in the common stock offering will be offered by Nevro. In addition, Nevro expects to grant the underwriters of the offerings a 30-day option to purchase an additional (a) 243,750 shares of its common stock at the public offering price, less underwriting discounts and commissions and (b) $24,750,000 aggregate principal amount of the notes, less underwriting discounts and commissions and solely to cover over-allotments with respect to the notes offering. Neither the completion of the common stock offering nor the notes offering is contingent on the completion of the other. The offerings are subject to market and other conditions, and there can be no assurance as to whether or when the offerings may be completed, or as to the actual size or terms of the offerings.

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The notes will be senior, unsecured obligations of Nevro, bearing interest semi-annually and are expected to mature on April 1, 2025, unless earlier converted or repurchased. Prior to the close of business on the business day immediately preceding October 1, 2024, the notes will be convertible at the option of holders only in certain circumstances and during certain periods, and thereafter, the notes will be convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date, in either case into cash, shares of Nevro’s common stock or a combination thereof, at Nevro’s election. Holders of the notes will have the right to require Nevro to repurchase all or any portion of their notes at 100% of their principal amount, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date, upon the occurrence of certain fundamental changes. The interest rate, conversion rate and other terms of the notes will be determined at the time of pricing of the notes offering.

In connection with the offering of the notes, Nevro expects to enter into privately-negotiated convertible note hedge transactions with one or more of the underwriters and/or their respective affiliates and/or other financial institutions (the "option counterparties"). These transactions will cover, subject to customary anti-dilution adjustments, the number of shares of Nevro’s common stock that will initially underlie the notes, and are expected generally to reduce the potential equity dilution, and/or offset any cash payments in excess of the principal amount due, as the case may be, upon conversion of the notes.

Nevro also expects to enter into separate, privately-negotiated warrant transactions with the option counterparties at a higher strike price relating to the same number of shares of Nevro’s common stock, subject to customary anti-dilution adjustments, pursuant to which Nevro will sell warrants to the option counterparties. The warrants could have a dilutive effect on Nevro’s common stock to the extent that the price of Nevro’s common stock exceeds the strike price of those warrants.

If the underwriters exercise their option to purchase additional notes, Nevro expects to enter into additional convertible note hedge transactions and additional warrant transactions with the option counterparties, which will initially cover the number of shares of Nevro’s common stock that will initially underlie the additional notes sold to the underwriters.

Morgan Stanley is acting as bookrunning manager for the offerings.

Nevro has been advised that in connection with establishing their initial hedges of the convertible note hedge and warrant transactions, the option counterparties or their respective affiliates expect to enter into various derivative transactions with respect to Nevro’s common stock concurrently with or shortly after the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of Nevro’s common stock or the notes at that time. The option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Nevro’s common stock and/or purchasing or selling Nevro’s common stock or other securities of Nevro in secondary market transactions following the pricing of the notes and prior to maturity of the notes (and are likely to do so during any observation period related to a conversion of the notes).

The potential effect, if any, of these transactions and activities on the market price of Nevro’s common stock or the notes will depend in part on market conditions and cannot be ascertained at this time, but any of these activities could adversely affect the value of Nevro’s common stock, which could affect the ability to convert the notes, the value of the notes and the amount of cash, if any, and the number of and value of the shares of Nevro’s common stock, if any, holders would receive upon conversion of the notes.

Nevro intends to use a portion of the net proceeds from the common stock offering and notes offering to pay the cost of the convertible note hedge transactions (after such cost is partially offset by the proceeds to Nevro from the sale of the warrants). Nevro expects to use the remainder of the net proceeds from the common stock offering and notes offering for general corporate purposes, including to repurchase and retire its outstanding 1.75% senior convertible notes due 2021 (the "existing convertible notes") in separate, privately negotiated transactions effected by one or more of the underwriters or their affiliates concurrently with these offerings. If the underwriters exercise their option to purchase additional notes, then Nevro intends to use a portion of the net proceeds from the sale of additional notes, together with the proceeds from the sale of additional warrants, to enter into additional convertible note hedge transactions with the option counterparties and Nevro intends to use the remaining net proceeds from the sale of such additional notes for general corporate purposes and/or the repurchase or other retirement of additional existing convertible notes.

In connection with the issuance of the existing convertible notes, Nevro entered into convertible note hedge transactions (the "existing convertible note hedge transactions") and warrant transactions (the "existing warrant transactions" and, together with the existing convertible note hedge transactions, the "existing call spread transactions") with certain financial institutions (the "existing option counterparties"). In connection with Nevro’s intended repurchase of the existing convertible notes, Nevro expects to enter into agreements with the existing option counterparties to terminate a portion of such existing call spread transactions, in each case, in a notional amount corresponding to the amount of such existing convertible notes repurchased, if any. In connection with any termination of existing call spread transactions and the related unwinding of the existing hedge position of the existing option counterparties with respect to such transactions, such existing option counterparties and/or their respective affiliates will sell shares of Nevro’s common stock in secondary market transactions, and/or enter into or unwind various derivative transactions with respect to Nevro’s common stock. In particular, in connection with Nevro’s intended repurchase of the existing convertible notes concurrently with the offerings, Nevro will terminate a corresponding portion of the existing call spread transactions, and Nevro expects the existing option counterparties to sell shares of Nevro’s common stock in the open market for some period of time beginning as early as five scheduled trading days after the offerings. This activity could decrease (or reduce the size of any increase in) the market price of Nevro’s common stock at that time and it could decrease (or reduce the size of any increase in) the market value of the notes. Nevro may enter into further agreements with the existing option counterparties to terminate any remaining portion of the existing call spread transactions in connection with any subsequent repurchase of its existing convertible notes.

Nevro also expects that those holders of the existing convertible notes that sell their existing convertible notes to Nevro may enter into or unwind various derivatives with respect to Nevro’s common stock and/or purchase or sell shares of Nevro’s common stock in the market to hedge their exposure in connection with these transactions. In particular, Nevro expects that many holders of the existing convertible notes employ a convertible arbitrage strategy with respect to the existing convertible notes and have a short position with respect to Nevro’s common stock that they would close, through purchases of Nevro’s common stock, in connection with Nevro’s repurchase of their existing convertible notes. This activity could increase (or reduce the size of any decrease in) the market price of Nevro’s common stock or the notes at that time.

The common stock offering and the notes offering will be made pursuant to an automatic shelf registration statement on Form S-3 (including a base prospectus) filed with the Securities and Exchange Commission ("SEC"), which automatically became effective. Preliminary prospectus supplements related to each of the common stock offering and the notes offering (together with such base prospectus, each a "prospectus"), will be available on the SEC’s website located at www.sec.gov. Copies of the prospectus relating to the common stock offering and the notes offering may be obtained, when available, from: Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014.

This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

On April 1, 2020 MedGenome, the leading genetic diagnostics, research and data company focused on expanding access for populations in South Asia and other emerging markets reported an investment of USD 55m led by LeapFrog Investments, a leading specialist investor in emerging markets. Existing investors Sofina and Sequoia also participated in the round (Press release, MedGenome, APR 1, 2020, View Source [SID1234556077]).

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Sam Santhosh, the CEO and Founder of MedGenome, said, "Genomics and personalized medicine are the future of healthcare, but emerging markets remain significantly under-penetrated. As the largest player in India in applied genomics, we are well-positioned to fill this gap." The subcontinent contributes around 20% of the world’s population, while the DNA sequences of its people make up only around 0.2% of global genetic databases.

MedGenome has already built the largest database of South Asian genetic variants through its leadership in genetic diagnostics in India, research partnerships and work as a co-founding member with GenomeAsia 100K. MedGenome has completed over 200,000 genomic tests to date and obtains samples from more than 550 hospitals and 6,000 clinicians across India. This investment will expand the clinical genomic testing market by expanding access in Tier-II and Tier-III towns and cities across India and accelerate the company’s drug discovery programs.

Sam added, "Genetics is having a transformational impact on families through early disease risk detection, inherited disease prevention, health care personalization, and new therapy development. MedGenome strives to deliver these benefits to India and Emerging Markets, where the burden of many inherited and complex diseases is even higher than in western markets. We are excited about partnering with the LeapFrog team, who share our focus on profit with purpose, and look forward to leveraging their network and expertise to accelerate achievement of our goals."

The MedGenome transaction was led by Dr. Felix Olale, Global Co-Lead for healthcare investments at LeapFrog. Dr. Olale said, "We are very excited to partner with MedGenome to increase access to affordable and high-quality genetic testing for emerging consumers in Asia and Africa. Genomic sequencing will anchor the future of medicine and we must include other underrepresented genomes not only because it drives access, but also because it improves the accuracy for everyone. As the leading player in its field, we believe that our investment will enable MedGenome to rapidly consolidate its position in Asia and become a significant player in the global market for drug discovery and precision medicine. Our investment will also drive the development of new drug discovery platforms that will have an enormous impact on cancer and cardiovascular disease.This investment is in line with LeapFrog’s consumer health approach and will be a key addition to the portfolio in terms of both returns and impact. Furthermore, it is a strong fit for LeapFrog’s impact mandate via increasing the availability of essential diagnostics in emerging markets and creation of new drug targets for intractable diseases globally."

The company’s latest research findings about Asian populations, in partnership with GenomeAsia 100K, was published as a cover article in the December 2019 issue of Nature magazine1. The paper is now a strong reference base and discussion point for scientists working globally on genomics. The increased diversity captured in MedGenome’s genetic datasets will drive discovery of new gene-disease associations, drug targets, and novel therapies.

The investment in MedGenome will seek to capitalise on the favourable dynamics in both the domestic and international markets for genetic diagnostics. The Indian genetic diagnostics market is expected to expand at 42% CAGR over the next five years. Globally, the market is expected to grow from USD 13bn in 2019 to USD 28.5bn by 2026 driven by improving penetration, affordability and increasing consumer awareness.

On April 1, 2020 Mevion Medical Systems reported that it has delivered the synchrocyclotron accelerator for the MEVION S250i Proton Therapy System to Huntsman Cancer Institute (HCI) at the University of Utah (U of U) on March 28, 2020 (Press release, Mevion Medical Systems, APR 1, 2020, View Source [SID1234556075]). The 15-ton accelerator, the world’s smallest, was driven up the side of the Red Butte Canyon and was lowered by a crane into the proton facility the same day.

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"With the arrival of the accelerator, we are on track to provide proton therapy to our patients later this year," said Dennis Shrieve, M.D, Ph.D., radiation oncologist at HCI and professor and chair of radiation oncology at the U of U.

The system, now under installation, features Mevion’s industry leading HYPERSCAN Pencil Beam Scanning (PBS) technology. HYPERSCAN improves on existing scanning capabilities to deliver more conformal fields of therapeutic radiation to tumors faster, with more precision, and is the most advanced pencil beam scanning available. HCI, Utah’s only National Cancer Institute-designated Comprehensive Cancer Center, has been closely tracking and considering proton therapy for over a decade. Recent technological advances by Mevion made it the right time to add this powerful cancer-fighting tool to their cancer center. HCI will also integrate* Siemen’s SOMATOM Definition Edge CT on rails to provide precise image-guided proton therapy (IGPT).

"Proton therapy is especially effective in delivering targeted radiation while preserving healthy tissues. Patients with tumors close to critical organs along with pediatric cancer patients can benefit the most from this advanced treatment," said Bill Salter, Ph.D., director of radiation oncology at HCI and professor and chief of the division of medical physics at the U of U. "The HYPERSCAN system will be a powerful new addition to Huntsman Cancer Institute’s already formidable suite of treatment tools."

By reducing the size and complexity of a proton therapy system, Mevion has allowed hospitals to offer proton therapy without the enormous expenditures and space requirements needed by other single-room or multi-room proton systems. Today, more cancer centers are considering providing compact proton therapy to their patients because of the technology Mevion has advanced.

"We are honored to provide Utah with the first proton therapy center in the Mountain West," said Tina Yu, Ph.D., chief executive officer of Mevion Medical Systems. "HCI is a nationally recognized research center and treatment hospital and we look forward to building our partnership to advance the science and application of proton therapy."

On April 1, 2020 Castle Biosciences, Inc. (Nasdaq: CSTL), a skin cancer diagnostics company providing personalized genomic information to improve cancer treatment decisions, reported the publication of a systematic review and meta-analysis of four study cohorts demonstrating that the DecisionDx-Melanoma test is an independent, significant predictor of recurrence and metastatic risk in patients with invasive cutaneous melanoma (Press release, Castle Biosciences, APR 1, 2020, View Source [SID1234556074]).

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The article titled, "Molecular risk prediction in cutaneous melanoma: a meta-analysis of the 31-gene expression profile prognostic test in 1,479 patients," appeared in the Journal of the American Academy of Dermatology (JAAD).

"This systematic review and meta-analysis are important because they further demonstrate the strength and consistency of the DecisionDx-Melanoma test as a significant, independent predictor of recurrence and metastasis in patients with Stage I-III melanoma, across these unique study cohorts," said lead author Bradley Greenhaw, M.D., Dermatology Center of North Mississippi, Tupelo, Mississippi. "The meta-analysis shows the value of using the DecisionDx-Melanoma gene expression profile test in combination with American Joint Committee on Cancer (AJCC) staging to optimize melanoma prognostication."

Systematic Review and Meta-Analysis Background:

This study was performed according to the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA)1.

Multiple published archival and prospective studies have described the prognostic capability, performance and clinical utility of the DecisionDx-Melanoma test to assess recurrence risk and inform patient management decisions on sentinel lymph node recommendations, follow up, surveillance imaging and referrals for patients with cutaneous melanoma.

This systematic review and meta-analysis were performed to evaluate the cumulative prognostic effect of the test across multiple cohorts with a focus on differences in recurrence and distant metastasis between patients with a DecisionDx-Melanoma Class 1A (lowest risk) and Class 2B (highest risk) test result. Four study cohorts, which included a total of 1,479 non-overlapping patients with Stage I-III melanoma, were included in the analysis.

Systematic Review and Meta-Analysis Results:

The DecisionDx-Melanoma test was found to be a consistent, independent and significant predictor of recurrence and metastatic risk in the meta-analysis across four study cohorts, achieving the highest Strength of Recommendation Taxonomy (SORT) level for a prognostic biomarker (Level 1 evidence).
The DecisionDx-Melanoma risk assessment is independent from other clinical factors (age, Breslow tumor thickness, ulceration and node status) and improves upon risk assessment performed with staging factors alone.
For melanoma recurrence, multivariate analysis showed that patients with DecisionDx-Melanoma Class 2B tumors are 2.90 times more likely (Hazard Ratio) to experience a recurrence than patients with Class 1A tumors (p<0.0001).
For distant metastasis, patients with Class 2B tumors are 2.75 times more likely to experience a distant metastasis than patients with Class 1A tumors (p<0.0001).
Despite differences in populations and study design, heterogeneity among the four studies was not significant.
The SORT system is used by the American Academy of Dermatology (AAD) and other organizations to evaluate the quality, quantity and consistency of evidence supporting tests such as DecisionDx-Melanoma. The SORT scale evaluates both the quality of the evidence (Level 1, 2 or 3) and strength of the recommendation (A, B or C).

About DecisionDx-Melanoma

DecisionDx-Melanoma is a gene expression profile test that uses an individual patient’s tumor biology to predict individual risk of cutaneous melanoma metastasis or recurrence, as well as sentinel lymph node positivity, independent of traditional staging factors, and has been studied in more than 5,700 patient samples. Using tissue from the primary melanoma, the test measures the expression of 31 genes. The test has been validated in four archival risk of recurrence studies of 901 patients and six prospective risk of recurrence studies including more than 1600 patients. Prediction of the likelihood of sentinel lymph node positivity has also been validated in two prospective multicenter studies that included more than 3,000 patients. Impact on patient management plans for one of every two patients tested has been demonstrated in four multicenter and single-center studies including more than 560 patients. The consistent performance and accuracy demonstrated in these studies provides confidence in disease management plans that incorporate DecisionDx-Melanoma test results. Since its commercial launch in 2015, through December 31, 2019, DecisionDx-Melanoma has been ordered 51,967 times for use in patients with cutaneous melanoma.

More information about the test and disease can be found at www.SkinMelanoma.com.