{ "docId": "019dd923-622c-750b-8b9a-2a2468219173", "docSlug": "ce565b841c40", "documentTitle": "Nevro Corp. (NVRO)", "authorId": "58_Scorpion_Capital", "authorName": "Kir Kahlon", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2021-01-07 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 132, "pageCount": 239, "prevPage": 131, "nextPage": 133, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 2, "notes": "Uses a direct quote from the CEO to highlight a discrepancy between expected adoption of new features and actual usage.", "elementsJson": [ "headline_text", "paragraph", "quote_block", "callout_box", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9a-2a2468219173/132", "deckHref": "/decks/019dd923-622c-750b-8b9a-2a2468219173", "deckJsonHref": "/decks/019dd923-622c-750b-8b9a-2a2468219173.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9a-2a2468219173#slide-132", "components": [ { "bbox": { "h": 0.18, "w": 0.88, "x": 0.06, "y": 0.68 }, "kind": "callout", "text": "On an August 26, 2020 group call during an investor conference, we asked the CEO what percentage of Omnia patients are currently using lower-frequency and other waveforms., and reminded him of his May comments. He repeated the same figure as above. Contrary to his May comments that “the use of lower frequencies standalone or combined would increase over time,” it is abundantly clear that Omnia remains just another high frequency stimulator – even about a year after launch.", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "0095b37d-61ea-47f3-be98-25a64985b4b5", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "callout", "text": "Contrary to his May comments that “the use of lower frequencies standalone or combined would increase over time,” it is abundantly clear that Omnia remains just another high frequency stimulator – even about a year after launch.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-3f3d-76db-b341-51c65a8b5d1a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.22, "w": 0.88, "x": 0.06, "y": 0.13 }, "kind": "paragraph", "text": "Omnia is Nevro’s Hail Mary to re-invent itself now that high frequency has come and gone as a one-trick pony. Both the CEO and the sell-side have emphasized Omnia’s centrality to Nevro’s story going forward. We shall shortly provide color from Nevro’s own loyalist doctors, KOL’s, the company’s former executives, and competitors indicating that Omnia is a flop. However, the clearest indication that Omnia has bombed comes from the CEO directly: he admits that Omnia is still programmed for high frequency stimulation 85-90% of the time, rendering the new frequencies and waveforms irrelevant. One year into launch, Omnia has failed to alter how Nevro is perceived and used.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "30e9906d-af05-4bfe-8fd8-7872e5a00c80", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.88, "x": 0.06, "y": 0.37 }, "kind": "paragraph", "text": "Keith Grossman, Nevro CEO, comments on May 5, 2020 earnings call that only 10-15% of Omnia patients are augmenting high frequency stimulation with lower frequency or other waveforms.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f5ea9e54-52df-49a6-ac06-bc804991bb30", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.22, "w": 0.88, "x": 0.06, "y": 0.44 }, "kind": "quote", "text": "In terms of how patients are actually being treated, we expected this to take a little bit of time. Given the certainty we had that the early adoption of Omnia would be among our existing customers and our existing customers skew to those customers who have a heavy belief in high frequency as a standalone therapy. So we knew that over time the use of paired waveforms, the use of lower frequencies standalone or combined would increase over time. But I think as we sit here today we look out over our very early patient population, I think it's something in the range of 10% to 15% of our patients are already using particularly paired waveforms with high frequency and other lower frequencies. And I think that's probably right about where we thought it would be at this point in time.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "fb98e5dd-97c5-4eef-941c-46a267137ba0", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "“In terms of how patients are actually being treated, we expected this to take a little bit of time. Given the certainty we had that the early adoption of Omnia would be among our existing customers and our existing customers skew to those customers who have a heavy belief in high frequency as a standalone therapy. So we knew that over time the use of paired waveforms, the use of lower frequencies standalone or combined would increase over time. But I think as we sit here today we look out over our very early patient population, I think it's something in the range of 10% to 15% of our patients are already using particularly paired waveforms with high frequency and other lower frequencies. And I think that's probably right about where we thought it would be at this point in time.” — Keith Grossman, Nevro CEO", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-3f3d-76db-b341-5423bc58036e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.35, "x": 0.06, "y": 0.91 }, "kind": "source-note", "text": "Source: Earnings call transcript 5/5/20; group call with CEO 8/26/20.", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "91415681-3daf-4345-a8ef-c8910e2473ce", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.88, "x": 0.06, "y": 0.09 }, "kind": "title", "text": "10. The new Omnia stimulator, the centerpiece of Nevro’s turnaround hopes, is a Hail Mary and colossal flop", "attrs": null, "subkind": "action-title", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "b178c68c-7885-4e2f-8612-3b8297150b4b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.4, "x": 0.06, "y": 0.04 }, "kind": "title", "text": "Scorpion Capital | Nevro (NYSE: NVRO)", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "56162393-ae5a-46cf-bcf4-ad3ffd8fda71", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "ceo-quote-contradiction", "slug": null, "matchId": "00f41c11-dce5-434c-b783-ae2b3e133d74", "evidence": "The slide explicitly contrasts the CEO's stated expectations with his later admission of stagnant adoption rates.", "confidence": 0.9 } ], "arcBeats": [ { "to": 150, "from": 51, "beatId": "903c076a-f368-4ca1-844c-277874c1afb2", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "The Victory", "beatSlug": "overcoming-monster-the-victory", "evidence": "The deck presents a conclusion that Nevro's problems are insurmountable", "position": 2, "confidence": 0.8, "parentBeatName": "Turn", "parentBeatSlug": "turn" } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }