NeuroPace Announces Record Full Year 2023 Revenue of $65.4 Million
- Significant revenue growth of 41% in Q4 2023 compared to Q4 2022 and 44% in 2023 over 2022.
- Full-year 2024 revenue guidance of $73-$77 million indicates a continued growth trajectory.
- Strategic initiatives like Project CARE and the NAUTILUS study aim to broaden market reach and product offerings.
- Gross margin increased to 75.2% in Q4 2023, showcasing operational efficiency.
- Effective management of operating expenses led to a reduced cash burn of $3.4 million in Q4 2023.
- Focus on RNS System sales and DIXI Medical products drove revenue growth in 2023.
- None.
Insights
The reported revenue growth for NeuroPace, Inc. is a significant indicator of the company's current financial health and future prospects. The 41% increase in Q4 revenue and 44% increase for the full year suggest a robust demand for the company's RNS System and its diagnostic electrodes and related products for epilepsy. The provided guidance for 2024 projects a continued upward trajectory, albeit at a slower pace, with an expected 12% to 18% growth. This deceleration could be indicative of market saturation, increased competition, or the lifecycle stage of the company's products. The gross margin improvement from 68.8% to 75.2% in Q4 and 71.4% to 73.6% for the full year reflects efficient cost management and economies of scale achieved through increased sales volume.
Investors should note the reduction in cash burn from $7.9 million in Q4 2022 to $3.4 million in Q4 2023 which demonstrates the company's improved operational efficiency and financial discipline. However, the company still operates at a loss, with a net loss of $6.2 million in Q4 2023 and $33.0 million for the full year. The long-term borrowings of $57.0 million as of December 31, 2023, should also be carefully considered, as they may affect future financial flexibility and profitability.
NeuroPace's strategic focus on expanding the market usage of the RNS System outside of Level 4 comprehensive epilepsy centers could potentially open up a broader market segment, tapping into the approximately 700,000 patients with drug-resistant focal epilepsy in the United States. The initiation of Project CARE pilot activities is a forward-looking step that could significantly impact the company's market share and penetration. The strategic collaboration with a biotechnology company to leverage the RNS System's data monitoring and analysis capabilities may also open new revenue streams and partnerships, further diversifying the company's business model.
The completion of enrollment for the pivotal NAUTILUS study is a critical milestone for the company. If the FDA submission leads to approval, this could be a catalyst for future growth, as there are currently no neuromodulation products indicated for generalized epilepsy in the United States. The potential expansion of approved indications for the RNS System represents a significant opportunity for NeuroPace to address a larger patient population and further solidify its position in the neuromodulation market.
The medical device sector, particularly in the field of neuromodulation for epilepsy, is highly specialized and competitive. NeuroPace's reported revenue growth reflects a strong performance within this niche market. The company's RNS System is an implantable device designed to prevent epileptic seizures by providing responsive neurostimulation. The increase in gross margin suggests that NeuroPace has been successful in optimizing its production processes and managing the costs associated with manufacturing and distributing its products.
The strategic integration of DIXI Medical's SEEG electrodes into NeuroPace's product portfolio and the expansion of sales highlight the company's ability to effectively leverage partnerships to enhance its product offerings and market reach. The successful execution of a three-part growth strategy focused on increasing adoption, expanding therapy utilization and extending approved indications is a testament to the company's innovative approach and commitment to addressing unmet medical needs in epilepsy care.
-- Revenue increased to
-- Revenue increased to
-- Provides full-year 2024 revenue guidance of between
-- Management scheduled to host a conference call today at 4:30 p.m. ET --
MOUNTAIN VIEW, Calif., March 05, 2024 (GLOBE NEWSWIRE) -- NeuroPace, Inc. (Nasdaq: NPCE), a medical device company focused on transforming the lives of people living with epilepsy, today reported financial results for the fourth quarter and full year ended December 31, 2023.
Recent Highlights
- Reported total revenue of
$18.0 million in the fourth quarter of 2023, a41% increase compared with the fourth quarter of 2022, and a10% increase over the third quarter of 2023 - Reported total revenue of
$65.4 million in 2023, a44% increase compared with 2022 - Initiated pilot program activities for expanding access to the RNS System to patients outside of Level 4 comprehensive epilepsy centers, under its Project CARE program
- Pivotal NAUTILUS study completed enrollment and subsequently, the number of implants required for FDA submission, during the fourth quarter of 2023
- Continued revenue growth from the Company’s exclusive partnership with DIXI Medical to market and sell their diagnostic electrodes and related products for epilepsy
- Announced entering into a first of its kind strategic collaboration with a biotechnology company, which will leverage the RNS System’s unique data monitoring and analysis capabilities
“This is an exciting period in our Company’s history as we grew total revenue by
“The second phase of our strategy, called ‘Project CARE,’ shifts the treatment paradigm to a much broader set of epilepsy specialists outside of Level 4 centers, and provides access to the approximately 700,000 patients with drug-resistant focal epilepsy in the United States that are not currently treated in Level 4 centers. We have initiated activities for the Project CARE pilot, and plan to expand these activities as we gain experience.”
“The third phase of our growth strategy is based on expanding the approved indications for our RNS System, currently focused on the ongoing pivotal NAUTILUS study, an IDE study for patients 12 years and older with drug resistant idiopathic generalized epilepsy, in which we have completed enrollment and the number of implants required for FDA submission. Approximately
“We are energized by the strong momentum that was built in 2023 and look forward to continuing to both increase adoption and utilization of the RNS System and to expand access to RNS therapy in the large community of drug-resistant epilepsy patients while maintaining financial discipline,” concluded Mr. Becker.
Fourth Quarter 2023 Financial Results
Total revenue in the fourth quarter of 2023 grew
Gross margin for the fourth quarter of 2023 was
Total operating expenses in the fourth quarter of 2023 were
Loss from operations was
The Company’s cash, cash equivalents and short-term investments balance as of December 31, 2023, was
Full Year 2023 Financial Results
Total revenue in 2023 grew
Gross margin for 2023 was
Total operating expenses in 2023 were
Loss from operations was
Full Year 2024 Financial Guidance
- Total revenue to range between
$73 million and$77 million , representing growth of12% to18% over 2023 - Gross margin to range between
72% and74% - Total operating expenses to range between
$80 million and$84 million , including approximately$12 million in stock-based compensation, a noncash expense
NeuroPace continues to expect revenue growth to be primarily driven by increasing sales of its RNS System and higher sales of DIXI Medical stereo EEG products, while replacement implant revenue is expected to decline in 2024 versus 2023.
Webcast and Conference Call Information
NeuroPace will host a conference call to discuss the fourth quarter and full year 2023 financial results after market close on Tuesday, March 5, 2024, at 4:30 P.M. Eastern Time.
Investors interested in listening to the conference call may do so by accessing a live and archived webcast of the event at https://edge.media-server.com/mmc/p/p69edqps. Individuals interested in participating in the call via telephone may access the call by dialing +1-888-886-7786 and referencing Conference ID 91932269. The webcast will be archived on the company’s investor relations website at https://investors.neuropace.com/news-and-events/events and will be available for replay for at least 90 days after the event.
About NeuroPace, Inc.
Based in Mountain View, Calif., NeuroPace is a medical device company focused on transforming the lives of people living with epilepsy by reducing or eliminating the occurrence of debilitating seizures. Its novel and differentiated RNS System is the first and only commercially available, brain-responsive platform that delivers personalized, real-time treatment at the seizure source. This platform can drive a better standard of care for patients living with drug-resistant epilepsy and has the potential to offer a more personalized solution and improved outcomes to the large population of patients suffering from other brain disorders.
Forward Looking Statements
In addition to background and historical information, this press release contains “forward-looking statements” based on NeuroPace’s current expectations, forecasts and beliefs, including among other things, the statements related to 2024 financial guidance, commercial strategy, execution, market expansion, clinical trial results and indication expansion, operational performance, and growth. These forward-looking statements are subject to inherent uncertainties, risks, and assumptions that are difficult to predict. Actual outcomes and results could differ materially due to a number of factors. These and other risks and uncertainties include those described more fully in the section titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and elsewhere in NeuroPace’s public filings with the U.S. Securities and Exchange Commission (SEC), including its Quarterly Report on Form 10-Q for the period ended September 30, 2023 and its Annual Report on Form 10-K for the period ended December 31, 2023 to be filed with the SEC, as well as any other reports that it may file with the SEC in the future. Forward-looking statements contained in this announcement are based on information available to NeuroPace as of the date hereof. NeuroPace undertakes no obligation to update such information except as required under applicable law. These forward-looking statements should not be relied upon as representing NeuroPace’s views as of any date subsequent to the date of this press release and should not be relied upon as a prediction of future events. In light of the foregoing, investors are urged not to rely on any forward-looking statement in reaching any conclusion or making any investment decision about any securities of NeuroPace.
Investor Contact:
Jeremy Feffer
Managing Director
LifeSci Advisors
jfeffer@lifesciadvisors.com
| NeuroPace, Inc. Condensed Statements of Operations (unaudited) | |||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| (in thousands, except share and per share amounts) | 2023 | 2022 | 2023 | 2022 | |||||||||||
| Revenue | $ | 18,012 | $ | 12,789 | $ | 65,421 | $ | 45,520 | |||||||
| Cost of goods sold | 4,467 | 3,986 | 17,299 | 13,027 | |||||||||||
| Gross profit | 13,545 | 8,803 | 48,122 | 32,493 | |||||||||||
| Operating expenses | |||||||||||||||
| Research and development | 5,377 | 5,089 | 20,778 | 21,946 | |||||||||||
| Selling, general and administrative | 13,219 | 13,573 | 54,518 | 51,341 | |||||||||||
| Total operating expenses | 18,596 | 18,662 | 75,296 | 73,287 | |||||||||||
| Loss from operations | (5,051 | ) | (9,859 | ) | (27,174 | ) | (40,794 | ) | |||||||
| Interest income | 822 | 800 | 3,050 | 1,578 | |||||||||||
| Interest expense | (2,236 | ) | (1,941 | ) | (8,517 | ) | (7,529 | ) | |||||||
| Other income (expense), net | 265 | (146 | ) | (315 | ) | (337 | ) | ||||||||
| Net loss | $ | (6,200 | ) | $ | (11,146 | ) | $ | (32,956 | ) | $ | (47,082 | ) | |||
| Net loss per share attributable to common stockholders, basic and diluted | $ | (0.23 | ) | $ | (0.45 | ) | $ | (1.27 | ) | $ | (1.91 | ) | |||
| Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted | 26,799,578 | 24,833,355 | 25,851,813 | 24,594,784 | |||||||||||
| NeuroPace, Inc. Condensed Balance Sheets (unaudited) | |||||||
| December 31, | |||||||
| (in thousands, except share and per share amounts) | 2023 | 2022 | |||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 18,058 | $ | 6,605 | |||
| Short-term investments | 48,396 | 70,804 | |||||
| Accounts receivable | 12,314 | 7,482 | |||||
| Inventory | 11,214 | 9,712 | |||||
| Prepaid expenses and other current assets | 2,737 | 3,111 | |||||
| Total current assets | 92,719 | 97,714 | |||||
| Property and equipment, net | 1,003 | 1,064 | |||||
| Operating lease right-of-use asset | 13,405 | 14,838 | |||||
| Restricted cash | 122 | 122 | |||||
| Deferred offering costs | 387 | 347 | |||||
| Other assets | 15 | 21 | |||||
| Total assets | $ | 107,651 | $ | 114,106 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities | |||||||
| Accounts payable | $ | 2,332 | $ | 2,147 | |||
| Accrued liabilities | 11,180 | 7,414 | |||||
| Operating lease liability | 1,627 | 1,415 | |||||
| Deferred revenue | 1,090 | — | |||||
| Total current liabilities | 16,229 | 10,976 | |||||
| Long-term debt | 56,954 | 52,913 | |||||
| Operating lease liability, net of current portion | 13,814 | 15,440 | |||||
| Total liabilities | 86,997 | 79,329 | |||||
| Stockholders’ equity | |||||||
| Common stock, | 28 | 25 | |||||
| Additional paid-in capital | 524,435 | 506,713 | |||||
| Accumulated other comprehensive loss | — | (1,108 | ) | ||||
| Accumulated deficit | (503,809 | ) | (470,853 | ) | |||
| Total stockholders’ equity | 20,654 | 34,777 | |||||
| Total liabilities and stockholders’ equity | $ | 107,651 | $ | 114,106 | |||
FAQ
What was NeuroPace's (NPCE) revenue in Q4 2023 compared to Q4 2022?
What was NeuroPace's (NPCE) revenue in 2023 compared to 2022?
What is NeuroPace's (NPCE) revenue guidance for full-year 2024?
What strategic initiatives did NeuroPace (NPCE) mention in the press release?
What was the gross margin for NeuroPace (NPCE) in Q4 2023?
