NeuroPace (NPCE) Morgan Stanley 22nd Annual Global Healthcare Conference summary

Vision and strategic direction

• Mission centers on transforming lives of patients with drug-resistant epilepsy using the RNS System, targeting a 1.2 million patient population in the U.S.

• Strategy focuses on expanding access via new sites of service, indication expansion, and platform efficiency improvements.

• Recent executive hires in R&D and marketing align with upcoming launches and growth opportunities.

• Organization development is prioritized to match business opportunities, especially in commercial and R&D functions.

• Strategic positioning aims for leadership in the field through technology and market expansion.

Financial performance and guidance

• Achieved 25% growth in Q1 and 17% in Q2 2024, totaling 21% for the first half, exceeding expectations.

• Guidance for the second half of 2024 implies $40 million in revenue, reflecting continued optimism.

• Gross margin expanded to 72.5%-73.4% in the last quarter, with disciplined operating expense management.

• Cash burn has been substantially reduced, with ongoing progress toward break-even.

• Focus remains on top-line growth, margin expansion, and expense discipline to achieve cash flow break-even.

Growth strategy and market development

• Three-part strategy: increase adoption in Level 4 centers, expand site of service (Project CARE), and broaden indications (Nautilus trial).

• Project CARE pilot is underway, with growing implants and referrals; broader rollout planned for 2025.

• Commercial expansion includes incremental hires and productivity enhancements, with further investment expected in 2025.

• Software enhancements (nSight) improve data management and ease of use, supporting community adoption.

• Virtuous cycle of expanding patient base and service sites drives efficient growth.