From Recovery to Renewed Growth - J.P. Morgan 40th Annual Healthcare Conference JANUARY 10, 2022
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From Recovery to Renewed Growth J.P. Morgan 40th Annual Healthcare Conference D. KEITH GROSSMAN CHAIRMAN, CEO & PRESIDENT JANUARY 10, 2022
Forward-Looking Statements
In addition to historical information, this presentation contains forward-looking statements reflecting the company's current
beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995, including: our belief that SCS market growth will be enhanced by pent-up demand; our belief in the continuing
growth fundamentals of the SCS market; our belief that our core back & leg business is poised for recovery as the COVID impact
recedes, trialing activity continues to improve, and pent-up demand comes back into the system; our belief that we are well-
positioned for SCS market expansion and that we will outperform and outgrow a growth market; our belief that the PDN and
NSRBP opportunities are set to outpace core back & legal market growth and expand the available total addressable market for
SCS therapies; our belief that there is an opportunity for an improved margin profile as we continue to scale; our belief that
Nevro has continued to gain market share; our beliefs around the size of the PDN and NSRBP markets; our belief that, as the
impact of COVID on the SCS market begins to recede, our new growth drivers will start to thrive as well; our belief that the safety
and efficacy data from the SENZA-PDN and SENZA-NSRBP RCTs will be used to support market penetration, physician referral
decisions and market access initiatives to ensure adequate payer coverage of these procedures; our expectation of steady
reimbursement progress for PDN with published clinical results and a robust clinical dossier; and our expectations that our Costa
Rica manufacturing facility is validated and approved in 2022, which we believe will contribute to margin improvement. 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 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 and the costs and expenses of operating our business;
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 Quarterly Report on Form 10-Q filed on November 8, 2021, 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.
2
Nevro:
Positioned to Pace-setting leader
in 3 large, underpenetrated SCS markets
Outperform Unique and differentiated
10 kHz Therapy with superior outcomes
Multiple growth opportunities
with expanded indications
Pent-up demand
additive to growth
Meaningful leverage opportunities
to drive profitability and cash flow
3 3
As the impact of
COVID on our market
begins to recede, new Chronic-pain treatments have been among the
hardest hit and slowest device segments to return,
but growth fundamentals of the Spinal Cord
growth drivers will start Stimulation (SCS) market remain.
to thrive as well. Core Back & Leg business is poised for recovery as
the COVID impact recedes, trialing activity continues
to improve, and pent-up demand comes back into
the system.
Well-positioned for market expansion: Painful
Diabetic Neuropathy (PDN) and Non-Surgical
Refractory Back Pain (NSRBP) set to outpace market
growth and expand available TAM.
Opportunity for an improved margin profile as we
continue to scale.
4
Trials – our most important
leading indicator
Trial rates in U.S. steadily improved in 2H of
2021, approaching pre-COVID 2019 levels U.S. PDN trials
(% of total U.S. trial volume)
Sept 2021
~6%
Dec 2021
Grew to
~8%
5
Total Addressable U.S. Lower Back & Leg Market²
Large, $17.9B Annually, ~8% Penetrated
underpenetrated
FBSS: Failed Back Surgery Syndrome
NSRBP: Non-Surgical Refractory Back Pain
back & leg market
$6.5B
36%
2021 Global SCS Market SURGICAL
(FBSS)
$2.3B Annually¹ 285K Patients/Yr $11.4B NON-SURGICAL
$1.8 Billion $0.5 Billion ~14% Penetrated
64% (NSRBP)
United States International
500K Patients/Yr
~5% Penetrated
More than 100,000
patients treated annually
1Includes DeNovo and Replacement 2Includes DeNovo patients only
Sources: Komodo claims data, as of September 2021; Company data Sources: Komodo claims data, as of September 2021; Company data 6
Sustainable mid-to-high
single-digit historical SCS
Est. Market CAGR
market growth
2011-2018 9%
SCS Worldwide Market Estimate 2015-2019 11%
Market Size ($ in millions)
3000 2011-2021 6%
2000
Despite COVID impact,
1000
market growth
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 fundamentals are strong
Est.
7
Sources: Company data, Nevro estimates
Nevro has continued to gain share.
Nevro SCS market share
18-20 %
after 2015 market entry Continuing to win in a
difficult 2021 market
Market Share Estimate by Competitor
40% As of October ‘21, believe we
are only company well into
30% positive YTD procedure
growth in the U.S. vs. 2019
20%
Based on claims data as of Nevro’s 3Q’21 earnings
10% call, U.S. perm procedures were up +4%, while total
market SCS perms were down -8%.
0%
2015 2016 2017 2018 2019 2020 2021
(YTD thru
Oct)
NVRO Competitor 1 Competitor 2 Competitor 3
8
Sources: Guidepoint and Nevro data
NEVRO: Positioned
to outgrow a 06
PDN launch
growth market 05
NSRBP coverage
04 expansion
Market share gains
03 in core back/leg
SCS business
02
Continued
commercial
execution
R&D: planned
01
Comprehensive
technology
evolution
HFX solution
Sustainable market growth enhanced by return of
pent-up demand
9
Growth Drivers
10Omnia SCS System
™
One system. Maximum versatility.
Delivers widest range of
frequencies, including
proprietary 10 kHz Therapy
Includes 35 customizable
programs, with ability to easily
pair widest array of waveforms
Upgradeable to future
waveforms and frequencies
Includes new, intuitive
patient accessories
New Trial Stimulator is smaller,
with more contoured,
cable-free system
11Omnia powered by HFX Connect
™ ™
Expanded versatility to remotely optimize patient care.
Proprietary cloud-based patient
management system Prior authorization and
Data-driven programming informed by appeal support
outcomes across 80k+ patients Benefit verification
Ongoing support with proactive Reimbursement education
reporting for long-term success
Patient support professionals,
trained in patient education
Remote therapy optimization
Post-procedure support
12Introducing
HFX for PDN* ™
A New Treatment Option
for Painful Diabetic
Neuropathy
HFX IS THE ONLY SCS TREATMENT OPTION
APPROVED BY THE FDA TO TREAT PDN
* HFX is a comprehensive solution that includes a Senza spinal cord stimulation system and support
services for the treatment of chronic pain. Throughout this presentation HFX™ for PDN means that a
patient has been implanted with a Senza System and programmed to include a frequency of 10 kHz.
13PDN: Large patient population with
significant unmet need.
PREVALENCE INCIDENCE
Diagnosed 20% 45% Annual TAM
PWD with PDN Refractory to CMM ~$3.5-5.0 Billion
26.8 MM PATIENTS 5.3 MM PATIENTS 2.3 MM PATIENTS 140K-200K PATIENTS
Current Treatment Options Demonstrate Mild Efficacy and Low Adherence
PWD = Patients with Diabetes PDN = Painful Diabetic Neuropathy CMM = Conventional Medical Management TAM = Total Addressable Market
Sources: CDC National Diabetes Statistics Report 2020; Schmader KE. Epidemiology and impact on quality of life of postherpetic neuralgia and painful diabetic neuropathy. Clin J Pain. 2002;18(6):350-354; 14
Trinity Partners Market Research 2017PDN patients suffer from chronic,
debilitating pain with no good options. Bladder / bowel
problems
What is PDN? Muscle
weakness
Nerve damage caused by chronically high
blood sugar and diabetes
Coordination
Most common complication of diabetes difficulties
Develops 5-10 years post-onset of diabetes
Symptoms
Numbness, loss of sensation, Stabbing
and sometimes pain in the pain Sensitivity
feet, legs, or hands to touch
Consequences
May not feel heat, cold, or pain in feet, Numbness, especially
legs, or hands in arms and legs
Unaware of cuts or wounds
Infections, ulcers, amputations, falls, Burning
hospital admissions, QoL, or even death pain
15
Sources: Trinity Partners Market Research 2017; Mayo Clinic; Nevro Senza-PDN RCT 6-month manuscriptPDN Market
The Power of a Opportunity
PDN Indication 1% penetration =
~$500M
Increase referrals and
access to new accounts
On-label treatment
Level 1 Scientific Data
Expand PDN coverage
$47 Billion
2.3M Patients Nevro is ONLY
company with
specific on-label
indication for
treating PDN
16Proprietary 10 kHz Therapy provides substantial, durable
relief in patients with PDN in clinical trial and real-world
settings and compared to low-frequency SCS.
Pain Relief over 12 Months Neurologic Improvement, Compared to Baseline
Lower Limb Pain VAS (cm)
https://care.diabetesjournals.org/look
Proportions of Subjects
up/doi/10.2337/dc21-1813
https://doi.org/10.1177/19322968211060316;
https://doi.org/10.1177/19322968211060075
10 kHz Therapy + CMM (n=84) CMM (n=58) Crossover CMM + 10 kHz Therapy (n=58)
Percentage of patients with ≥50% Pain Relief 6 MONTHS 12 MONTHS
86% 86%
86% of patients on 10 kHz Therapy
had substantial, durable pain relief 10 kHz Therapy
through 12 months, compared to 0% + CMM
of patients on CMM alone. (n=84)
MEAN PAIN RELIEF: 77.1%
84% of patients that elected to cross Crossover to
0%
10 kHz SCS
84%
over to 10 kHz Therapy from CMM at 6
months, experience substantial relief CMM
that was comparable to patients (n=58)
assigned to 10 kHz Therapy at baseline MEAN PAIN RELIEF: 70.3%
Petersen et al. Durability of High-Frequency 10-kHz Spinal Cord Stimulation for Patients With Painful Diabetic Neuropathy Refractory to Conventional Treatments: 12-Month Results From a Randomized Controlled Trial. Diabetes Care. 2022;45:e1–e4; https://doi.org/10.2337/dc21-1813.
17Expect steady reimbursement
progress with published clinical results
and a robust clinical dossier.
PAYER MIX FOR PDN PATIENTS
Medicare Commercial
Current State: 40% 60% Payers
Payer Mix: 60% Commercial / 40% Medicare
~25% of PDN patients already covered ~25%
Patients
Recent PDN already
Expect an increase in coverage occurring coverage covered
in 2022 and beyond expansion
effective
March 1, 2022
Source: Payer Mix - IQVIA Claims Data; Other data cited as of 1/1/2022
18Two-pronged reimbursement
market access strategy for PDN
Leverage prior authorization and In parallel, active discussions with
1 patient appeal process while 2 Medicare and commercial payers to
working with payers to establish positive coverage policies
broaden coverage
Medicare Coverage Commercial Coverage
~40% of Total Addressable Market¹ ~60% of Total Addressable Market¹
Covered
5%²
Covered Not Covered Case-by-Case Specific Non-Coverage Policy
50% 50% 25% 70% 19
¹ Source: IQVIA Claims Data; As of 1/1/2022 ² Does not include the UnitedHealthcare positive coverage decision, which is effective 3-1-22PDN already Preliminary, unaudited
delivering
worldwide PDN revenue:
~$4.0M
revenue gains $1.7M
Q3 2021 Q4 2021
Q4’21 U.S. PDN trials grew ~92% over Q3’21
PDN ~7% of U.S. trials in Q4 2021
Broader penetration and a more
significant revenue contribution
expected in 2022 and beyond
20NSRBP: Clinical data expected
to drive patient access and
$11.4B
Total
market penetration. Addressable
Market
Submitted PMA Supplement to
FDA for NSRBP Indication $510M
Current
Development of clinical data Market
supports continued market
penetration:
Expanded payer coverage Only ~5%
penetrated
Increased referrals for
10 kHz Therapy
12-month data release at NANS 2022 and
publication expected soon
21
NSRBP: Non-Surgical Refractory Back Pain; PMA: Pre-Market ApprovalNANS 2022: Significant Clinical Presence
17 Abstracts Accepted for Presentation
Three late-breaking presentations:
SENZA-PDN RCT – 18-month results SENZA-NSRBP RCT – 12-month results SENZA-NSRBP RCT Cost-Effectiveness Data
Saturday, January 15, 2022 Saturday, January 15, 2022 Saturday, January 15, 2022
8:40-8:55 am ET 9:25-9:40 am ET 5:15-5:25 pm ET
Presenter: Dr. Erika Petersen Presenter: Dr. Leo Kapural Presenter: Dr. Jessica Jameson
Highlights
Complete 18-month results for SENZA-PDN RCT,
including 12-month crossover results and analysis of
healthcare resource utilization
Twelve-month results for SENZA-NSRBP RCT,
with 159 randomized participants from 15 study centers
SENZA-NSRBP RCT cost-effectiveness data,
for 10 kHz spinal cord stimulation
22Continued progress on
operating expense leverage.
Adjusted OPEX Leverage Meaningful leverage
160% opportunities to drive
profitability
120%
Commercial organization
80% New Costa Rica
manufacturing operations
40%
Continued product
enhancements
0%
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Technology-enabled
Adj. OPEX as a % of Revenue efficiencies
Excluding all litigation-related and PDN expenses, YTD Q3 2021 operating expenses would
be less than YTD Q3 2019 by almost $35 million, or 13%
23In-house manufacturing
expected to drive margin gains Gross margin
expansion to
mid-70s%
over next
Established very first insourced global 3-5 years
manufacturing operations in Costa Rica
Enables greater control and efficiency
in our manufacturing processes
Expect the facility to be validated and
approved in 2022
Expect to have ~100 team members in
Costa Rica by the end of 2022
Represents investment of $21 million
by the end of 2022
24Closing Thoughts
25Nevro:
Positioned to Outperform
Pace-setting leader in three large,
underpenetrated SCS markets
Unique and differentiated 10 kHz
technology with superior outcomes
Multiple growth drivers via
expanded indications
Pent-up demand additive to growth
Meaningful leverage opportunities to
drive profitability and cash flow
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