NeuroPace Reports First Quarter 2021 Financial Results and Provides 2021 Financial Guidance

MOUNTAIN VIEW, Calif., June 03, 2021 (GLOBE NEWSWIRE) -- NeuroPace, Inc. (Nasdaq: NPCE), a commercial-stage medical device company focused on transforming the lives of people suffering from epilepsy, today reported financial results for the quarter ended March 31, 2021.

Recent Highlights

  • Total revenue of $11.2 million for the first quarter of 2021, representing a 12% increase over the comparable prior year period in 2020
  • Initial implant revenue of $8.1 million for the first quarter of 2021, representing a 23% increase over the prior year period
  • Completed an initial public offering of 6.9 million shares, raising approximately $105 million in net proceeds
  • Issues 2021 total revenue guidance of approximately $47 million, representing 14% growth compared to 2020

“We are pleased with our quarterly results and continue to take a measured approach in the early stages of the COVID-19 recovery,” said Mike Favet, Chief Executive Office of NeuroPace. “In addition, we are excited about the successful completion of our IPO and are grateful for the support of the participating investors. The proceeds from the offering will enable us to take the next steps in our journey to make RNS Therapy the standard of care for drug-resistant epilepsy patients.”

First Quarter 2021 Financial Results

Total revenue was $11.2 million in the first quarter of 2021, a 12% increase from $10.0 million in the prior year period. Initial implant revenue was $8.1 million, a 23% increase from $6.6 million in the prior year period. Replacement implant revenue was $3.1 million, a decrease of 8% compared to the prior year period. Due to the longer replacement cycle of NeuroPace’s newer device with an eight-year battery life (double the battery life of the previous generation device), the decline in replacement implant revenue was expected.

Gross margin for the first quarter of 2021 was 75.7% compared to 70.7% in the first quarter of 2020. The increase in gross margin was primarily due to lower fixed costs per unit associated with increased volume and ongoing efforts to reduce product costs. Gross margin for the first quarter of 2020 was negatively impacted by a reduction in production volume due to the COVID-19 pandemic.

Total operating expenses in the first quarter of 2021 were $12.4 million, compared with $12.5 million in the same period of the prior year. R&D expense in the first quarter was $4.1 million compared with $4.8 million in the same period of 2020. The decrease in R&D expense was primarily driven by a reduction in payroll and personnel-related expenses. SG&A expense in the first quarter of 2021 was $8.3 million compared with $7.7 million in the prior year period. The increase in SG&A expense was primarily driven by increased costs associated with the initial public offering, and increased payroll and personnel-related expenses. This was partially offset by reduced expenses resulting from COVID-19 restrictions, including reduced sales representative travel costs.

Net loss was $8.8 million for the first quarter 2021, compared to a net loss of $6.7 million in the prior year period. The Company recorded a non-cash charge of $3.1 million in Other expenses due to an increase in fair value of convertible preferred warrant liability resulting from the initial public offering. The convertible preferred warrants were exercised in April upon closing of the IPO.

Cash and marketable securities were $30.5 million and long-term borrowings were $49.6 million as of March 31, 2021. The Company received approximately $105 million of net proceeds from the initial public offering, which closed on April 26, 2021.

2021 Financial Guidance

Despite ongoing challenges and uncertainties due to the COVID-19 pandemic and its impact on physician and patient behavior, NeuroPace is providing financial guidance as follows:

Full year 2021

  • Total revenue of approximately $47 million, representing growth of 14% compared to prior year period.
  • Initial implant revenue of approximately $36 million, representing growth of 29% compared to prior year period. Given the uncertain timing of enrollment in the Company’s clinical studies, initial implant revenue guidance of $36 million includes a small clinical study revenue contribution.
  • Replacement implant revenue of approximately $11 million, representing a decline of 16% compared to prior year period.

Webcast and Conference Call Information

NeuroPace will host a conference call to discuss the first quarter 2021 financial results before market open on Thursday, June 3, 2021 at 8:00 A.M. Eastern Time. Investors interested in listening to the conference call may do so by dialing (844) 955-2173 for domestic callers or (914) 987-7949 for international callers, using conference ID: 1485513. Live audio of the webcast will be available on the “Investors” section of the company’s website at: https://investors.neuropace.com/. The webcast will be archived and available for replay for at least 90 days after the event.

About NeuroPace, Inc.

Based in Mountain View, Calif., NeuroPace is a commercial-stage medical device company focused on transforming the lives of people suffering from 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 suffering from 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

Statements in this press release regarding the expected benefits from the proceeds from the company’s IPO and the financial guidance regarding full year 2021 revenue are “forward-looking statements” based on NeuroPace’s current expectations, forecasts and assumptions, and 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, including the ongoing uncertainty of the impact of the COVID-19 pandemic on its business. 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 its public filings with the U.S. Securities and Exchange Commission (the “SEC”), including the final prospectus filed with the SEC pursuant to Rule 424(b)(4) filed on April 23, 2021 and its Quarterly Report on Form 10-Q for the period ended March 31, 2021 to be filed with the SEC. 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 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:
Gilmartin Group
Matt Bacso, CFA
investors@neuropace.com

NeuroPace, Inc.
Condensed Statements of Operations
(unaudited)

  Three Months Ended March 31,
(in thousands, except share and per share amounts)   2021     2020    
Revenue $ 11,217     $ 9,975    
Cost of goods sold   2,724     2,918    
Gross profit   8,493     7,057    
Operating expenses        
Research and development   4,100     4,833    
Selling, general and administrative   8,267     7,682    
Total operating expenses   12,367     12,515    
Loss from operations   (3,874 )   (5,458 )  
Interest expense   (1,849 )   (2,998 )  
Other income (expense), net   (3,087 )   1,715    
Net loss $ (8,810 )   $ (6,741 )  
Net loss per share attributable to common stockholders, basic and diluted $ (32.73 )   $ (33.32 )  
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted   269,178       202,341    



NeuroPace, Inc.
Condensed Balance Sheets
(unaudited)

    March 31,       December 31,    
(in thousands, except share and per share amounts)   2021       2020    
Assets                
Current assets                
Cash and cash equivalents $ 13,841     $ 26,390    
Short-term investments   16,689       11,689    
Accounts receivable   8,202       8,395    
Inventory   7,042       6,909    
Prepaid expenses and other current assets   1,314       1,179    
Total current assets   47,088       54,562    
Property and equipment, net   476       515    
Restricted cash   366       366    
Deferred offering costs   2,371       484    
Other assets   23       23    
Total assets $ 50,324     $ 55,950    
Liabilities and Stockholders’ Deficit                
Current liabilities                
Accounts payable $ 1,484     $ 949    
Accrued liabilities   5,734       6,603    
Short-term debt   3,590       2,043    
Total current liabilities   10,808       9,595    
Deferred rent, noncurrent   1,204       1,301    
Long-term debt   49,561       50,821    
Redeemable convertible preferred stock warrant liability   3,491       369    
Other liabilities   274       274    
Total liabilities   65,338       62,360    
Redeemable convertible preferred stock, $0.001 par value   141,422       141,422    
Stockholders’ deficit                
Common stock, $0.001 par value            
Additional paid-in capital   240,032       239,826    
Accumulated other comprehensive income   33       33    
Accumulated deficit   (396,501 )     (387,691 )  
Total stockholders’ deficit   (156,436 )     (147,832 )  
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit $ 50,324     $ 55,950    


Primary Logo

Back to news