Pain-treatment device company Nevro (NYSE:NVRO) announced that it is letting go of 63 employees, about 5% of its workforce, as part of a restructuring effort.
“This restructuring supports our strategy and allows us to focus our investments to further position Nevro for long-term growth and profitability,” Nevro CEO Kevin Thornal said in a news release posted yesterday.
He later added: “As we look ahead, we remain focused on bringing innovative products to market, working closely with physicians treating patients living with chronic pain and creating value for all our stakeholders.”
The Redwood City, California–based company said most layoffs affected internally focused employees, not customer-facing personnel. The job cuts should be complete by the end of Q1 2024.
Nevro said the restructuring will have a $14 million to $15 million positive impact on its full-year 2024 adjusted EBITDA. Company officials expect the positive impact to be offset by normal operating expense increases, including inflation, merit increases, and other acquisition-related expenses.
The company offers its HFX spinal cord stimulation (SCS) platform includes its Senza SCS system and support services for the treatment of chronic pain of the trunk and limb and painful diabetic neuropathy. Last month, it acquired Vyrsa Technologies, a company developing a minimally invasive joint pain treatment.
Preliminary, unaudited fourth-quarter results released yesterday showed revenue up 2% year-over-year to $116 million. Full-year revenue was up 5% to $425 million.
“We are pleased with our preliminary fourth-quarter 2023 revenue, which exceeded our expectations and demonstrates that our commercial realignment and execution are delivering stronger and more consistent growth,” Thornal said. “Also, we are excited to enter the fast-growing sacroiliac joint space through our recent acquisition of Vyrsa Technologies, which allows us to leverage one of our greatest assets – our commercial team. As we look ahead, we remain focused on delivering on our three key pillars of commercial execution, market penetration and profit progress.”
Truist analysts thought the restructuring should improve Nevro’s operational leverage, but they noted that SCS growth is still sluggish. Said Truist’s Richard Newitter, Samuel Brodovsky, and Lin Zhang: “We continue to see downside risk as limited for NVRO given low expectations, but ultimately the stock remains a show-me story moving into ’24.”
NVRO shares over the past five trading days have risen more than 7% to roughly $20.60 apiece. MassDevice‘s MedTech 100 Index was up more than 1% over the same time.
Overall, the medical device industry has seen a great deal of refocusing. Medtech companies have not only faced additional costs from inflation, supply chain disruptions and more that are affecting many businesses — but they also have to manage post-pandemic operational challenges among their health provider customers. MassDevice has reported on over 18,000 medtech job cuts across the industry since mid-2022.