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.