{ "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": 205, "pageCount": 239, "prevPage": 204, "nextPage": 206, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 3, "notes": "The slide uses expert testimony to debunk the company's growth claims.", "elementsJson": [ "headline_text", "paragraph", "quote_block", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9a-2a2468219173/205", "deckHref": "/decks/019dd923-622c-750b-8b9a-2a2468219173", "deckJsonHref": "/decks/019dd923-622c-750b-8b9a-2a2468219173.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9a-2a2468219173#slide-205", "components": [ { "bbox": null, "kind": "callout", "text": "We queried KOL's and Nevro competitors on the normalized market growth rate excluding a pandemic. A Medtronic SCS product manager stated it's low single digits at best and cast those who claim it's higher as \"liars,\" adding that they simply make up neuromodulation growth rates for earnings calls.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-3f3d-76db-b34a-2ae7d6150c3c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.88, "x": 0.06, "y": 0.13 }, "kind": "paragraph", "text": "We queried KOL's and Nevro competitors on the normalized market growth rate excluding a pandemic. A Medtronic SCS product manager stated it's low single digits at best and cast those who claim it's higher as \"liars,\" adding that they simply make up neuromodulation growth rates for earnings calls. KOL's and territory managers at Nevro's 3 key competitors indicated that market growth already hit a wall pre-Covid, due to reimbursement, cannibalization from a flood of smaller entrants, pricing pressure, and cannabis legalization.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a75ccc0e-6ca2-4ebf-b955-3a6fc50632ad", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.88, "x": 0.06, "y": 0.84 }, "kind": "quote", "text": "\"My December 2019 wasn't as busy as before. In December 2018 I was scrambling to fit in procedures. Last year there no scrambling. It was slower at the end of 2019.\" - KOL, high volume implanter", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "80b7105d-b4bc-4546-a0b3-6ad95cbe3e8f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.07, "w": 0.88, "x": 0.06, "y": 0.76 }, "kind": "quote", "text": "\"Stimulator implant volumes have decreased. Boston Scientific has decreased. I speak to Medtronic and it's true for them as well. The Abbot rep doesn't complain quite as much in my area but said 2019 was down about 20% and other areas are down more.\" - KOL, high volume implanter", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "84149bf5-5f6c-41d3-9a51-ae762ad33916", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.32, "w": 0.88, "x": 0.06, "y": 0.43 }, "kind": "quote", "text": "\"The market will be flat. It should have been flat in 2019. There are just a lot of players in the market and pricing is eroding in the space. In my territory my numbers have dropped. We've come back fighting by lowering our pricing. My territory is back to $5.5mm, down from $7mm. Loyal docs are being slower than in previous years. It's partly the cannabis situation. Primary care doctors have gotten cannabis licenses. A lot of patients are on cannabis and doing fairly well without interventional procedures. We're seeing very loyal Medtronic doctors where their stim implants are down 30-40% after getting a cannabis license. I see market growth being flat. I don't see it growing. A lot of new players are cannibalizing everyone. The market's not like you hope it would be with four legacy players. The market has changed completely. What hurt Medtronic wasn't the larger players. It's the smaller companies earlier in the pain continuum. Smaller players are having an impact. Boston was smart to buy Vertiflex. Stim placement is an hour, and you can do four Vertiflex in an hour.\" - Medtronic territory manager", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e6f1e217-2fa6-4e0c-8fd2-b386c653a81d", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.88, "x": 0.06, "y": 0.3 }, "kind": "quote", "text": "\"We think the spinal cord stimulator market grows at 3-5%, I don't want to call people liars on these calls [who are saying it's high single digit or teens growth]. An honest number is 3-5%. I get emails from senior management saying we need a growth rate number for our earnings call. It's an echo chamber. You touch your finger to the wind. There's no database.\" - Medtronic product manager", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f8d1b21a-95cb-4760-88c8-60debcd680fe", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"I get emails from senior management saying we need a growth rate number for our earnings call. It's an echo chamber. You touch your finger to the wind. There's no database.\" — Medtronic product manager; \"There are just a lot of players in the market and pricing is eroding in the space. In my territory my numbers have dropped. We've come back fighting by lowering our pricing.\" — Medtronic territory manager; \"Stimulator implant volumes have decreased. Boston Scientific has decreased. I speak to Medtronic and it's true for them as well.\" — KOL, high volume implanter", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-3f3d-76db-b34a-2f1aef833a5b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.2, "x": 0.06, "y": 0.96 }, "kind": "source-note", "text": "Source: Consultation calls with experts", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "64849cc6-367c-49f2-bcf1-a2947b18b972", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.88, "x": 0.06, "y": 0.09 }, "kind": "title", "text": "16. The SCS market growth story fueled by Wall Street is false and undermined by escalating payor backlash", "attrs": null, "subkind": "action-title", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "91e7fe81-6775-4c4c-aa7f-b11ab553dd47", "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": "70f26578-da39-491b-a532-1a381695a9bb", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }