NeuroPace (NPCE) presented its growth trajectory and regulatory plans for expanding its responsive neurostimulation (RNS) device to a broader epilepsy population at the 12th Annual Cantor Fitzgerald Global Healthcare Conference, where analyst Sarah James highlighted the company’s clinical momentum and FDA pathway.
Core RNS revenue climbed 21% in the most recent quarter, with revenue growth accelerating to 33% over the trailing twelve months through the second quarter of 2026. Gross profit margins sit in the low 80% range, and the average selling price for the device remains above $50,000, according to CFO Patrick Williams.
Williams said the company generated positive adjusted EBITDA and free cash flow in at least one quarter of 2025 and expects to reach cash flow breakeven exiting 2027. Roughly half of NeuroPace’s current cases are covered through private pay rather than insurance reimbursement.
The addressable market for the RNS system centers on the approximately 3.6 million people in the U.S. with epilepsy, of whom an estimated 1.2 million have drug-resistant epilepsy. Only about 75,000 patients reach Level Four comprehensive epilepsy centers annually, and roughly 15,000 receive medical intervention each year. NeuroPace is present at all 250 Level Four centers, though it captures only a couple thousand patients annually.
Adult focal epilepsy accounts for about 60% of the market, with adults representing roughly 80% of all epilepsy cases. Williams noted that approval for idiopathic generalized epilepsy (IGE) — which would add roughly 20% to the total addressable market — could unlock “another 20% of the overall epilepsy market.” IGE patients are expected to be more than 90% adult, and upon approval, NeuroPace would hold the only neuromodulation device approved for IGE.
Clinical data from the NAUTILUS trial supported the company’s case. Eighteen-month results, published in Epilepsia, showed a 77% median seizure reduction. At 23 to 24 months of stimulation, median seizure reduction improved to 100%. Williams pointed to a data moat of more than 27 million intracranial EEG recordings linked to programming changes and clinical outcomes, a dataset he said cannot be replicated.
On the regulatory front, NeuroPace received a “not approvable” letter from the FDA on its PMA supplement for IGE, which management characterized as distinct from a denial. The FDA recommended the Submission Issue Request (SIR) process, which functions as a mini panel review. NeuroPace has 21 days to respond and schedule a meeting, expected in early to mid-Q4 2024. A major amendment could trigger a 180-day review clock, potentially pushing approval to Q2 2025. Insurance reimbursement adjustments for the IGE indication could follow more than a year after approval.
Other operational milestones include a planned remote monitoring FDA submission by year-end 2024 and pediatric expansion and Lennox-Gastaut syndrome studies expected to become material after 2027. The company also introduced its ECoG Assistant AI tool, which can reduce analysis time by up to 10 minutes per patient by helping physicians identify roughly 50 to 60 relevant data points from thousands.
Cantor Fitzgerald rated the stock Overweight with a $21 price target. Shares traded around $14.48, with a market capitalization of $497 million.
