There's a couple of random things that i just wanted to add, not really any rhyme or reason, but i think it helps to keep painting the picture.
1) Their electrodes have triphase capability instead of biphase, which means neutral is a setting in addition to positive and negative. Allows them to deactivate un-needed electrodes, which can be switched on by the patient as their pain migrates (e.g., patient can change which of the 12 electrodes are activated at any one time by switching between pre-set programs).
2) I believe they're getting their FDA approval for MRI compatibility in the next 6 months. I think it was an earnings call, Drees mentioned that their Neuronexus thinfilm leads don't use ferrous metals, which made the path to MRI compatibility alot easier.
3) Greatbatch just signed an agreement with witricity (sp?). I've been reading about them in barron's for the last couple of days - basically, they're one of two or three companies that are doing real wireless charging (another one is publicly traded WATT - witricity and WATT are taking different approaches, but both are going for the same thing). Traditionally, you sit there and place a charger paddle on the skin covering your IPG, have to remain very still in order for it to charge through your skin (watch tv and don't change positions while charging). with the wireless charging tech, you wouldn't be nearly as constrained - you could basically charge your device while working at your desk, driving, etc. Ultimately, it would just make the devices more convenient, if it works.
4) I think on VIC I read (or maybe on an earnings call), that they're going to 50 reps for 2016, 100 for 2017, and 200 for 2018. And, you can do an analysis with sales per salesperson after an initial ramp up period, then apply gross margins and other opex, to get to a runrate sales and earnings number for each of those. just thought this was a helpful way to get a grasp on modeling their business / revenue drivers.
5) While they're building up the salesforce, they're going to run clinical trials - algovita was approved using a literature-based review. it seemed like a trade journal was indicating that it was out of the ordinary for the FDA to go ahead with a literature-based approval...but I think it was a Greatbatch investor day from 2013 (transcript online) where they mentioned that the fda had been very involved in the process and really liked what they saw. i wouldn't expect them to say anything else, but that coupled with what seems to be an unconventional approval path, makes me wonder if there isn't something good going on(?). Anyways, I digressed - they're doing the clinical trials while they build out sales force, and once those are complete and the sales force is bigger, they'll start marketing the clinical trial results. And I think that will be the major inflection point.
6) I had previously pointed you to the Spine Health forums. Here's another one, I mentioned it briefly in my earlier write ups - this is where i found the offhand comment that doctors like nuvectra/algovita (last comment on page) - https://www.medtechy.com/boards/companies/nevro/4869
7) the #1 risk in Boston Scientific and St. Jude's 10-ks is vulnerability to new competition, especially competition that has an advanced/improved technology. Both cite their exposure to rapid technological change.
And, randomly, 8, don't forget that Nuvectra is (or already has) filed for FDA approval for its second indication, SNS (sacral nerve syndrome). so i think they have that approval by 2018 (based on investor presentation), which coincides nicely with the release of clinical trial results as well as a more mature salesforce.
So, R&D and product development - MDT, BSX, and SJT are just not very good. And they acknowledge this, it's well known - an executive from one of those was quoted in a ttrade journal as saying something along the lines of "we're not good at that because we've never had to be." Basically, the big 3 purchase new technologies rather than develop in house. SJT just did it recently a couple of years ago. BSX did it a couple of years before that, i think. Heck, both BSX and SJT entered the space in '03/'04 by acquiring two SCS frontrunners (one of which was ANS, and that became SJT's main SCS offering). So again, not good at R&D, because they haven't needed to be - with the exception of MDT's pacemaker spawn, this entire industry is built on M&A.
Just two things here. First, Post Obamacare, with the medical device surcharge tax, etc., there has been a massive drop in medical device VC. Which means that the acquisition pipelines are drying up. Second, because they enter new markets via acquisition, the big threes' portfolios of stimulation devices are basically hodgepodges of totally different devices. This means that they have to upgrade each device in their portfolio individually, and go through a separate approval process for each one, whenever they want to incorporate a new feature(s). As the neuromod industry expands into more and more indications, and assuming the big 3 continue to consolidate the industry, their product portfolios are going to become more and more unwieldly. i think the platform approach provides nvtr with a potentially incredible competitive advantage in the form of product development efficiency. based on the really long time frames involved, as well as the expertise and resources that were put into this project, i don't think it will be easy to replicate.
i've also read that the big 3's device upgrades are thought up by engineers, not clinicians or patients. It's not a very collaborative process. So, the big three are always releasing an upgraded product, but most of the time the upgrade is gimmicky - the price increase isn't justified by the increase in clinical effectiveness. on the other hand, algovita was the result of 8-9 years of collaboration between clinicians, patients, industry experts, and a dedicated manufacturer.
Product development is a major competitive advantage in the space. If you have a leaner product development operation that results in quicker time-to-market, you have a cost advantage and you're a lot more agile and responsive. Not only does it let you secure a first mover advantage, but it also lets you respond to competitive threats more quickly.
The time-to-market advantage isn't just important for upgrading your portfolio. It also makes you a much more attractive partner to OEMs. When Alevo signed the agreement with GB/NVTR, one of the things they mentioned in the press release was that Greatbatch/NVTR would significantly accelerate time to market for their DBS solution. Basically, GB/NVTR can commercialize new variants of their platform, for new indications, faster. And, as mentioned, start-ups are the name of the game here (even though venture funding has dropped, this is still basically the only source of innovation in the industry), and they're all targeting different indications. Besides increasing market penetration for existing approved indications, a major major growth driver for the industry is going to be expanding the number of approved indications. it seems like algovita has a good chance of driving penetration in existing approved indications, which is one way to (effectively) grow the market size. But they're also an extremely attractive partner to these OEMs who are developing new tech for new indications, which is the other way to grow market size. So they kind of have both of these opportunities.
they (+GB) have the platform, they have the design and mfring facilities, they know the FDA approval process - the only thing they need is to connect this machine to emerging OEMs...they need deep industry connections. Well, GB bought CCC back in 2014, before Nevro took off, and that seems pretty smart - Nevro seems to be doing well (despite the knocks I put on it). It also gave them HF stim technology, which they've incororated into algovita (although to a lesser extent than Nevro). They have Neuronexus, whose PHD employees are at the cutting edge of DBS technology (and specifically, lead technology). Note that Alevo, with whom they signed a license agreement, is a DBS company with a novel lead technology - i don't think it's a coincidence. And finally, Drees is also on the board of Neuros Medical, which is developing electrodes for PNS (peripheral nerve syndrome) - i think the first indication this is meant to target is residual limb pain. So, amputees basically get these little benign growths on the end of their severed nerves, and it really hurts, and this is what Neuros is targeting initially (note, this is residual limb pain, not phantom limb pain). I don't know if Neuros is going to do a licensing agreement with nuvectra, but i was mostly trying to hit home the fact that these guys have their fingers in every neuromod cookie jar on the planet.
that's all i have basically for nvtr. the last thing that i'd say is that the CEO of greatbatch started this a long time ago, and that same guy is still the ceo. they just did a major buyout after spinning off nuvectra, and the stock is under pressure. but if i'm right about nuvectra and algovita - i don't know how i'd characterize it, but i personally haven't witnessed many CEOs do anything, anything even remotely close to this in ambition, scope, and complexity. He has, quite literally, taken a ten year view. that's how much time will have passed between their initial efforts and their first material sales. and then after all of that effort, he spins it off with no fanfare to the tune of $50m. Wasn't even a matter of fanfare...they basically stonewalled any inquiries for information. i could be wrong about all of this, but if i'm right about nvtr and algovita, i think there's something to be said for the CEO, too (who, remember, has LT supply agreements now with nevro, nuvectra, alevo...and every single future OEM that opts to license the Algovita SCS platform). and GB is one of the only med device outsourcers (at least publicly traded in US), and i've been reading some interesting stuff about how the industry will develop...the gist of it is, trend to outsourcing. And GB + it's new giant acquisition is a big gorilla in this market...it's called integer now. haven't done alot of research on it, but i think itgr could be really, really interesting in it's own right.