NVTR - Nuvectra

[rukawa]

Looks like its a binary outcome for Nuvectra. For Algovita to be successful 2 things have to happen whose probabilities I estimate as follows

1) they have to do well in post-clinical trails (60%)
2) they have to get hospital approvals and insurer approvals (50%)

I would estimate about a 30% total probability of success. I would guess that within 2 years we will know if this works.  So lets aim for about a 35% expected return a year due to the risk involved. So after 2 years I want an expected return of 1.35^2 -1 = 82%. To get that assuming a 30% chance of success I need 1.82/0.3 = 6. It should be around a 6 bagger. Current mcap is 50 million and so I need it to be at 300 million in two years.

Nevro traded at something like 8 times 2016 estimated sales. I would guess Algovita would get a multiple of 4 times estimated 2018 sales and so you are looking at revenue of 300/4=75 million which is a bit of a stretch even if 1) and 2) both happen.

Does anybody know Nevro's history. Its the closest thing I can compare Algovita to.

[DanielGMask]

I'm not familiar with this technology nor the company but I've been following the thread. My brother in law is a doctor at Barrow's Neurological Institute in the Saint Joseph's Hospital in Phoenix, which I consider one of the best places in the world for neurological medicine. I've just called him to ask about this and he told me they are currently using Nevro and they are doing about 3 per week, which is a very small number! He also told me they don't think this is the appropriate medical solution for most of patients.

[KJP]

Looks like its a binary outcome for Nuvectra. For Algovita to be successful 2 things have to happen whose probabilities I estimate as follows

1) they have to do well in post-clinical trails (60%)
2) they have to get hospital approvals and insurer approvals (50%)

I would estimate about a 30% total probability of success. I would guess that within 2 years we will know if this works.  So lets aim for about a 35% expected return a year due to the risk involved. So after 2 years I want an expected return of 1.35^2 -1 = 82%. To get that assuming a 30% chance of success I need 1.82/0.3 = 6. It should be around a 6 bagger. Current mcap is 50 million and so I need it to be at 300 million in two years.

Nevro traded at something like 8 times 2016 estimated sales. I would guess Algovita would get a multiple of 4 times estimated 2018 sales and so you are looking at revenue of 300/4=75 million which is a bit of a stretch even if 1) and 2) both happen.

Does anybody know Nevro's history. Its the closest thing I can compare Algovita to.

How did you arrive at your probability estimates?

[bennycx]

Cafepharma forums seem to suggest Nuvectra is old tech, while Nevro is superior with HF

For example:
http://cafepharma.com/boards/threads/nevro-or-nuvectra.603504/


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sorry just read your previous post wjsco - even if Nuvectra has the potential to include HF technology or other features, it does need to ramp up Algovita quickly in the next few quarters with essentially a non-ground breaking (according to Cafepharma forums) product offering

[Ismael]

I want to get a better understanding as to whether nvtr innovations differentiate it enough from competitors to overcome their competitor's sales relationships before I invest. 

My understanding of Nuvectra's advantages are:
1. more effective lead placement
2. more effective in targeting 3 dermotomes instead of just 2
3. reduction in lead breakage and migration
4. more flexibility in programming different power settings to different areas

It would be great to get some feedback from doctors to confirm whether these are the important pain points and whether Nuvectra can address these pain points better than their competitors. Also, are there other pain points that trump the ones listed?  Anyone know any neurosurgeons who specialize in this sort of thing?

Below is a link to an article about another new technology in SCS that is wireless which would likely negate the lead breakage and migration issue much more effectively than nvtr

http://www.businesswire.com/news/home/20141202005347/en/Stimwave-Receives-FDA-Clearance-World%E2%80%99s-Injectable-Wireless

Also, it looks like Nevro is suing Boston Scientific for infringing on its hf patent. 

wjsco, thanks for doing the leg work on the patents.  Also, thanks to stockspinoff for bringing the idea to the board. 

[muscleman]

I see this is a device that has to be implanted.
And I think neurosurgeons are usually trained to be able to operate on just one type of such devices. Therefore device companies have a wide moat.
Given the complexity of the implantation, how likely is it for this new device to be acceptable to surgeons?

[muscleman]

I think there is a misunderstanding about "trading below net cash".
What really matters is "trading below net excess cash". NVTR requires all the existing cash to expand the market by getting hospital approvals and doctor acceptance.

[hswoon]

Anyone have the conference calls saved? Can't seem to find the transcripts anywhere. TIA

[muscleman]

I want to get a better understanding as to whether nvtr innovations differentiate it enough from competitors to overcome their competitor's sales relationships before I invest. 

My understanding of Nuvectra's advantages are:
1. more effective lead placement
2. more effective in targeting 3 dermotomes instead of just 2
3. reduction in lead breakage and migration
4. more flexibility in programming different power settings to different areas

It would be great to get some feedback from doctors to confirm whether these are the important pain points and whether Nuvectra can address these pain points better than their competitors. Also, are there other pain points that trump the ones listed?  Anyone know any neurosurgeons who specialize in this sort of thing?

Below is a link to an article about another new technology in SCS that is wireless which would likely negate the lead breakage and migration issue much more effectively than nvtr

http://www.businesswire.com/news/home/20141202005347/en/Stimwave-Receives-FDA-Clearance-World%E2%80%99s-Injectable-Wireless

Also, it looks like Nevro is suing Boston Scientific for infringing on its hf patent. 

wjsco, thanks for doing the leg work on the patents.  Also, thanks to stockspinoff for bringing the idea to the board.

One year after FDA approval, Stimwave started commercialization of Freedom-8A.
wjsco, what's your thought on this one vs NVTR's device?

[muscleman]

As  I understand, this is just a little device that connects to a few lead heads and the lead heads periodically discharge electricity to relief pain, right?

Why is it so complicated?

I could imagine several 0.5 mm by 0.5 mm wireless micro chip injected by a needle, and a bluetooth control device in the patient's pocket instead of being implanted through a painful surgery, and all of these micro chips get charged wirelessly like the Nokia Lumia wireless charger each day.