Investing

Accelmed Partners Takes Activist Position in NPCE / Neuropace After Q3 Results

Fintel reports that Accelmed Partners II L.P. has filed a 13D form with the SEC disclosing ownership of 4,042,657 shares of Neuropace, Inc. (NPCE). This represents 16.2% of the company.

Based in Mountain View, Calif., NeuroPace is a commercial-stage medical device company focused on transforming the lives of people suffering from epilepsy by reducing or eliminating the occurrence of debilitating seizures. Its novel and differentiated RNS System is the first and only commercially available, brain-responsive platform that delivers personalized, real-time treatment at the seizure source.

This platform can drive a better standard of care for patients suffering from drug-resistant epilepsy, and has the potential to offer a more personalized solution and improved outcomes to the large population of patients suffering from other brain disorders.

In their most recent earnings update, the company reported the following highlights:

  • Achieved total revenue of $11.2 million for the third quarter of 2022, representing growth of 8% compared to the third quarter of 2021 and 9% compared to the second quarter of 2022
  • Achieved initial implant revenue of $9.2 million for the third quarter of 2022, representing growth of 18% compared to the third quarter of 2021 and 15% compared to the second quarter of 2022
  • Initiated distribution of DIXI Medical?s stereo EEG product portfolio to epilepsy monitoring units, or EMUs, on October 1, 2022
  • Implanted the first patient with the RNS System in the NAUTILUS pivotal study for primary generalized epilepsy

Total revenue was $11.2 million in the third quarter of 2022, representing growth of 8% compared to the prior year period and 9% compared to the prior quarter. Initial implant revenue was $9.2 million, growth of 18% compared the prior year period and 15% sequentially. Replacement implant revenue was $1.9 million, compared to $2.5 million in the prior year period. Replacement implant revenue will generally continue to decrease until a significant number of devices with the longer lasting battery reach end of service. More than 90% of patients have had their NeuroPace device replaced when the battery reaches end of service, so replacement implant revenue is primarily a function of when the batteries in the previously implanted devices reach end of service.

Gross margin for the third quarter of 2022 was 71% compared to 73% in the third quarter of 2021. The decline in gross margin was primarily due to a short-term supply chain disruption, which was resolved during the third quarter.

Total operating expenses in the third quarter of 2022 were $18.2 million, compared with $13.8 million in the prior year period. R&D expense in the third quarter was $5.6 million compared with $4.3 million in the prior year period. The increase in R&D expense was primarily driven by an increase in personnel related expenses, product development, and clinical study expenses. SG&A expense in the third quarter of 2022 was $12.6 million compared with $9.4 million in the prior year period. The increase in SG&A expense was primarily driven by personnel related expenses and increased sales and marketing costs to support commercial expansion initiatives.

Net loss was $11.8 million for the third quarter of 2022, compared to a net loss of $8.1 million in the prior year period. Interest expense in the third quarter of 2022 was $1.9 million, compared to $1.8 million in the prior year period.

What are other large shareholders doing?

 

Kck Ltd. holds 5,621,111 shares representing 22.57% ownership of the company. No change in the last quarter.

Orbimed Advisors Llc holds 4,012,281 shares representing 16.11% ownership of the company. No change in the last quarter.

Soleus Capital Management, L.P. holds 2,334,003 shares representing 9.37% ownership of the company. No change in the last quarter.

Millennium Management Llc holds 585,367 shares representing 2.35% ownership of the company. In it’s prior filing, the firm reported owning 506,905 shares, representing an increase of 13.40%. The firm decreased its portfolio allocation in NPCE by 16.61% over the last quarter.

Nantahala Capital Management, LLC holds 443,502 shares representing 1.78% ownership of the company. In it’s prior filing, the firm reported owning 478,438 shares, representing a decrease of 7.88%. The firm decreased its portfolio allocation in NPCE by 9.37% over the last quarter.

What is the overall Fund Sentiment?

There are 109 funds or institutions reporting positions in Neuropace, Inc.. This is a decrease of 8 owner(s) or 6.84%.

Average portfolio weight of all funds dedicated to Neuropace, Inc. is 0.4247%, a decrease of 19.3959%. Total shares owned by institutions increased in the last three months by 9.45% to 18,346,358 shares.

Fintel’s Fund Sentiment Score is a quantitative model that ranks companies from zero to 100 based on Fund Sentiment. Fund Sentiment is important because it tells you if funds are buying or selling – and in particular how the company ranks compared to other companies in the investing universe.

This article originally appeared on Fintel.

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