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Our paradigm-shifting RNS System is currently indicated in the United States for use in adult epilepsy patients, meaning patients who are 18 years of age or older, with drug-resistant focal epilepsy, which we believe represents an approximately $27 billion total addressable market.
−Removed: While we are presently focused on this significant market opportunity, we have investigational device exemption, or IDE, approval for clinical trials to evaluate use of the RNS System to treat drug-resistant idiopathic generalized epilepsy and patients between ages 12 and 17 and we may later seek regulatory approval in markets outside the United States.
−Removed: We currently do not believe we will need to modify our RNS System for potential use in generalized epilepsy or in patients under the age of 18;
−Removed: however, we will need to complete clinical studies and obtain FDA approval prior to marketing the RNS Systems for these indications.
−Removed: We also believe that our RNS System may be effective in treating other brain disorders including depression, impulse control disorders, memory disorders, and post-traumatic stress disorder.
+Added: While we are presently focused on this significant market opportunity, we have investigational device exemption, or IDE, approval for clinical trials to evaluate use of the RNS System to treat drug-resistant idiopathic generalized epilepsy, or IGE, and patients between ages 12 and 17 and we may later seek regulatory approval in markets outside the United States.
+Added: We do not believe we will need to modify our RNS System for potential use in generalized epilepsy or in patients under the age of 18;
+Added: however, we will need to complete clinical studies and obtain FDA approval prior to marketing the RNS System for these indications.
+Added: We also believe that our RNS System may be effective in treating other brain disorders including depression, memory disorders, and post-traumatic stress disorder.
We will need to conduct additional studies to determine if any modifications to the RNS System are necessary to address these other brain disorders and to obtain FDA approval for any new indications.
−Removed: Our commercial efforts have historically been focused on growing adoption and utilization across Level 4 comprehensive epilepsy centers, or CECs, in the United States that facilitate appropriate care for drug-resistant epilepsy patients, which may include implantation of epilepsy neuromodulation devices such as our RNS System or
−Removed: the ongoing treatment of patients with neuromodulation devices.
−Removed: While most drug-resistant epilepsy patients begin their care at physician offices or community hospitals, we estimate that approximately 24,000 adult drug-resistant focal epilepsy patients are treated in Level 4 CECs in the United States each year.
−Removed: We estimate that this patient pool represents an annual core market opportunity of approximately $1.1 billion for initial RNS System implants, and we expect that it will continue to grow as the number of CECs, including the number of Level 4 CECs, and epileptologists increases, and as more patients are referred to these CECs.
+Added: Our commercial efforts have historically been focused on growing adoption and utilization across Level 4 comprehensive epilepsy centers, or CECs, in the United States that facilitate appropriate care for drug-resistant epilepsy patients.
In 2023, we received FDA approval of a Premarket Approval Supplement, or PMA-S, which updated the qualification criteria for centers and clinicians that may prescribe and implant the RNS System.
−Removed: This PMA-S approval allows us to expand our commercial efforts to target and be able to qualify the approximately 1,800 additional epileptologists outside of Level 4 CECs and the entire population of functional neurosurgeons, empowering them to provide the RNS System as a much-needed treatment option for their patients and expanding our current annual core market opportunity to all 575,000 adults in the United States with drug-resistant focal epilepsy, representing approximately $27 billion for initial RNS System implants.
−Removed: Our RNS System has an estimated average battery life of nearly eleven years, an increase from the previous model of the device.
−Removed: The sale of replacement neuromodulation devices provides a recurring revenue stream that is additive to the annual market opportunity for initial implants.
−Removed: Resective or ablative surgery that removes or destroys the brain tissue at the source of the seizure onset has historically been considered the best treatment option for drug-resistant focal epilepsy.
+Added: supplemental approval allows us to expand our commercial efforts to target and be able to qualify the approximately 1,800 additional epileptologists outside of Level 4 CECs and the entire population of functional neurosurgeons, empowering them to provide the RNS System as a much-needed treatment option for their patients and expanding our current market opportunity to all 575,000 adults in the United States with drug-resistant focal epilepsy.
+Added: Our RNS System has an estimated average battery life of nearly 11 years, an increase from the previous model of the device.
+Added: The sale of replacement neuromodulation devices provides a recurring revenue stream that is additive to the market opportunity for initial implants.
+Added: Resective or ablative surgery that removes or destroys brain tissue at the source of the seizure onset has historically been considered the best treatment option for drug-resistant focal epilepsy.
However, resective or ablative surgery carries risk, including neurological risk, and only approximately half of resective or ablative surgery patients are seizure free two years after surgery.
We estimate that only approximately 20% of drug-resistant focal epilepsy patients have a focus that is both safe to remove and likely to result in seizure control if removed, and are also willing to undergo the procedure.
−Removed: The ILAE guidelines state that DRE patients who may not appear to be appropriate candidates for resective or ablative epilepsy surgery should still be referred to a tertiary epilepsy center to evaluate potential other interventions.
+Added: The ILAE guidelines state that DRE patients who may not appear to be appropriate candidates for resective or ablative epilepsy surgery should still be referred to a tertiary epilepsy center to evaluate other potential interventions.
There are currently two other neuromodulation devices, Vagus Nerve Stimulation, or VNS, and Deep Brain Stimulation, or DBS, that are also approved to address the approximately 80% of drug-resistant focal epilepsy patients who are not ideal candidates for resective or ablative surgery.
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In addition, the non-destructive, reversible nature of the implant procedure makes it an attractive option for drug-resistant focal epilepsy patients, the majority of whom are not candidates for, or are unwilling to undergo, resective or ablative surgery.
−Removed: The key efficacy and safety benefits of our RNS System are demonstrated by four multi-center FDA approved prospective clinical studies that collectively include approximately 600 patients with up to nine years of follow-up,
−Removed: as well as multiple retrospective studies reporting real-world outcomes.
+Added: The key efficacy and safety benefits of our RNS System are demonstrated by four multi-center FDA approved prospective clinical studies that collectively include approximately 600 patients with up to nine years of follow-up, as well as multiple retrospective studies reporting real-world outcomes.
Evidence generated from patients enrolled in our initial clinical studies demonstrated a 44% median reduction in seizure frequency at one year that improved to a 75% median reduction at nine years, with enduring improvements in quality of life and cognition.
−Removed: Importantly, the more recent real-world results from a post-approval retrospective study published in 2020 showed a median seizure frequency reduction of 67% at one year (p<0.05), which is consistent with the interim one year results of our ongoing prospective Post-Approval Study, increasing to 82% at three or more years, demonstrating the utility of our unique brain data set in driving improvements in therapy effectiveness across patient cohorts over time – the patients not only start at a higher median seizure frequency reduction rate, but that rate continues to improve.
−Removed: Over the 3,200 patient implant years reported in our prospective studies, our RNS System has been shown to be well tolerated without any adverse stimulation-related side effects at therapeutic settings.
+Added: Importantly, the more recent real-world results from a post-approval retrospective study published in 2020 showed a median seizure frequency reduction of 67% at one year (p<0.05), which is consistent with the interim one year results of our ongoing prospective post-approval study, which we refer to herein as the Post-Approval Study, increasing to 82% at three or more years, demonstrating the utility of our unique brain data set in driving improvements in therapy effectiveness across patient cohorts over time – the patients not only start at a higher median seizure frequency reduction rate, but that rate continues to improve.
+Added: Over the 3,400 patient implant years reported in our prospective studies, our RNS System has been shown to be well tolerated without any adverse stimulation-related side effects at
+Added: therapeutic settings.
We believe our extensive and growing body of clinical data is being used to improve patient outcomes, which we believe will support increased adoption.
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Additionally, as a result of the approval of a PMA-S in 2023, we are now able to expand our commercial efforts to the approximately 1,800 additional epileptologists as well as the remaining functional neurosurgeons practicing outside of Level 4 CECs.
+Added: We initiated a pilot program to begin our outreach to these clinicians in 2024 and have commenced program expansion that will continue through 2025.
We plan to address this opportunity in a targeted manner with incremental expansion of our sales force.
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Our near-term research, development, and clinical efforts are focused on continuing to improve therapy effectiveness, enhance the patient and provider experience, and expand the population of patients that can be treated with our RNS System.
−Removed: Our near-term product development pipeline includes enhanced offerings that leverage our extensive brain activity database and our advanced data analysis, machine learning and artificial intelligence capabilities.
+Added: Our near-term product development pipeline includes enhanced offerings that leverage our extensive brain activity database and our advanced data analysis, machine learning and artificial intelligence, or AI, capabilities.
We are also pursuing studies to support label expansion for our RNS System in additional epilepsy populations.
−Removed: Competitive Strengths
−Removed: We are focused on transforming the lives of people living with epilepsy by developing, manufacturing, continuously improving, and commercializing our innovative and clinically validated RNS System that we believe offers significant advances in the treatment of drug-resistant epilepsy.
−Removed: We believe our continued growth will be driven by the following competitive strengths:
−Removed: • Novel and differentiated closed-loop, brain-responsive technology that provides targeted, personalized care.
−Removed: Our RNS System is the first and only commercially available brain-responsive neuromodulation system that can be programmed by clinicians to deliver personalized treatment to the seizure source, based on an individual patient’s unique brain activity.
−Removed: Our RNS System continuously monitors and analyzes the brain’s electrical activity and recognizes patient-specific abnormal electrical patterns that precede the onset
−Removed: Our RNS System then uses that information to “close the loop” by responding in real time with imperceptible electrical pulses to prevent seizures at their source.
−Removed: This enables our RNS System to deliver therapy precisely when and where it is needed, providing exceptional outcomes with approximately three minutes of stimulation on average per day.
−Removed: As such, we believe our RNS System offers material efficacy and tolerability advantages relative to alternative neuromodulation approaches, offering clinicians insights based on their patients’ brain activity which help in making better treatment decisions and optimizing patient care.
−Removed: In addition, the non-destructive, reversible nature of the implant procedure makes it an attractive option for drug-resistant focal epilepsy patients, the majority of whom are not candidates for, or are unwilling to undergo, a resective or ablative brain surgery.
−Removed: Through its unique capabilities, we believe our revolutionary RNS System has the potential to transform the treatment paradigm for the approximately 1.2 million individuals in the United States with drug-resistant epilepsy.
−Removed: We plan to continue to leverage our technology to establish our RNS System as the standard of care for these patients.
−Removed: • Unique data recording, monitoring, and analysis capabilities that have generated an extensive database of detailed brain activity information.
−Removed: Our RNS System provides insight into a patient’s dynamic brain activity from iEEG data recorded over time by our neurostimulator.
−Removed: It is the only commercially-available device that provides continuous information on brain electrical activity specific to epilepsy and detailed recordings of iEEGs to help clinicians make more informed treatment decisions and optimize their patients’ care.
−Removed: These data are recorded by our RNS System and can be viewed by the physician during regular patient visits using the Physician Tablet or on demand through a secure website.
−Removed: Our RNS System gathers objective and actionable information about an individual patient’s condition, seizure patterns, and treatment effectiveness which clinicians can utilize to optimize patient care.
−Removed: We believe our RNS System offers a significant leap forward relative to current practice for epilepsy treatment in which clinicians rely on patient-reported seizure data which are often unreliable and incomplete.
−Removed: As of December 31, 2023, over 5,000 epilepsy patients have received our RNS System, yielding an extensive database of over fifteen million iEEG records.
−Removed: We believe that we are able to continue to learn and innovate by leveraging this database and our data analytics capabilities, thereby improving and enhancing our products and creating actionable insights for clinicians that improve clinical outcomes for patients.
−Removed: We also believe that our extensive data set is and can be useful externally to others studying epilepsy.
−Removed: • Compelling body of long-term clinical data that continues to demonstrate improved outcomes over time .
−Removed: The efficacy and safety benefits of our RNS System are supported by over 3,200 patient-implant years of data from approximately 600 patients enrolled across four multi-center FDA approved prospective studies, in addition to multiple retrospective studies reporting real-world outcomes.
−Removed: Evidence generated in studies provides nine years of follow-up data resulting in the largest and longest published prospective neuromodulation data set in the field of epilepsy.
−Removed: These studies demonstrate that our RNS System provides significant, sustained, and improving reductions in disabling seizures with enduring improvements in quality of life and cognition.
−Removed: In our randomized, controlled Pivotal Study, patients experienced a median reduction in seizure frequency of 44% after the first year.
−Removed: The patients from our Feasibility Study and the Pivotal Study, all of whom received implants prior to 2010, were followed in a Long-Term Treatment Trial, or LTT, in which outcomes improved to a 75% median reduction in seizure frequency at nine years, demonstrating the ability of our closed-loop therapy to improve outcomes in the same set of patients over time.
−Removed: Additionally, we believe the insights obtained from our extensive brain data set are driving improvements in overall therapy effectiveness across patient cohorts over time.
−Removed: For example, the real-world results from a post-approval retrospective study of patients treated across eight epilepsy centers published in 2020 showed a statistically significant median seizure frequency reduction of 67% at one year (p<0.05), which is consistent with the interim one-year results of our ongoing prospective Post-Approval Study, increasing to a median reduction in seizure frequency of 82% at three or more years, the highest published seizure frequency reduction for any neuromodulation study.
−Removed: Our studies have also collectively demonstrated that our RNS System is well-tolerated, with a safety profile similar to that of other brain neurostimulator implant procedures, and a lower rate of dying from sudden unexpected death in epilepsy, or SUDEP, relative to other treatment-resistant epilepsy groups.
−Removed: Unlike other neuromodulation devices for epilepsy, some of which have demonstrated meaningfully worse outcomes in their real-world results and have been shown to negatively impact sleep, mood, memory, and vocal characteristics, our RNS System is
−Removed: not associated with adverse stimulation-related side effects at therapeutic settings.
−Removed: We believe our extensive and growing body of clinical evidence will continue to support increased adoption of our RNS System.
−Removed: • Efficient commercial model supported by a specialized and focused field team .
−Removed: Our initial target patient population of U.S.
−Removed: adults with drug-resistant focal epilepsy is treated in Level 4 CECs that provide advanced diagnosis and management of epilepsy.
−Removed: We estimate that there are approximately 200 of these Level 4 CECs in the United States.
−Removed: Our commercial organization of Therapy Consultants and Field Clinical Engineers has established a significant account base across these CECs, and remains focused on driving utilization within these centers, increasing the number of implanting Level 4 CECs, and expanding our referral pathways to increase the number of drug-resistant patients referred to these centers.
−Removed: Given the concentrated nature of this market, we believe there is a significant opportunity for our salesforce to efficiently drive continued growth.
−Removed: We believe that our focused and dedicated approach to these CECs has also enabled us to develop deep-rooted relationships with the clinicians that manage our target patient population, which provides a strong established channel for future potential products and indications.
−Removed: As we expand into the community setting to target the additional 1,800 epileptologists and the remaining functional neurosurgeons practicing outside of Level 4 CECs, we will utilize what we have learned in the CECs and will be targeted with our efforts.
−Removed: We believe we can accomplish growth with incremental expansion of our sales force.
−Removed: • Established, differentiated, and favorable reimbursement supporting commercial growth .
−Removed: We believe that both the implantation procedure for our RNS System and the ongoing patient care provided by clinicians, including monitoring and programming, are reimbursed at attractive levels under well-established physician and hospital codes.
−Removed: In addition, our RNS System is currently the only neuromodulation system for epilepsy with reimbursement available for in-person or remote review of iEEG data, which provides a differentiated value proposition for clinicians.
−Removed: Given the relatively young average age of our patient population, our payor mix has historically been more heavily weighted towards commercial payors and, as of December 31, 2023, positive written coverage policies from commercial payors address over 200 million covered lives in the United States.
−Removed: Medicare and Medicaid also routinely provide coverage for implantation of our RNS System and follow-up care.
−Removed: Based on our experience, less than 1% of potential RNS System patients have been unable to undergo an implant procedure with our RNS System due to lack of payor coverage.
−Removed: We believe the established, differentiated, and favorable reimbursement paradigm for our RNS System will continue to support its broad commercial adoption.
−Removed: • Strategic approach to our intellectual property portfolio .
−Removed: Our product and technological advantages are supported by a combination of our patent portfolio, trade secrets, and manufacturing know-how.
−Removed: As of December 31, 2023, we owned 107 issued U.S.
−Removed: patents and 19 non-provisional pending U.S.
−Removed: patent applications that included system, device, and method claims covering our differentiated, responsive direct brain stimulation system as well as stimulation and treatment modalities, artificial intelligence, and data analysis methodologies.
−Removed: • Experienced senior management team .
−Removed: Our senior management team consists of seasoned medical device professionals with deep industry and clinical domain experience.
−Removed: Our team has successfully led and managed dynamic growth phases in organizations, commercialized products, and developed markets in neuromodulation and other therapeutic modalities.
−Removed: Members of our team have worked with well-regarded medical technology companies such as St.
−Removed: Jude Medical, Medtronic, Hologic, Boston Scientific Corporation, and Johnson & Johnson.
+Added: In February 2025, we received approximately $69.8 million in net proceeds from the sale of 7,475,000 shares of our common stock, including 975,000 shares from the exercise of the underwriters’ option to purchase additional shares, at a public offering price of $10.00 per share.
+Added: We used $49.5 million of the net proceeds from the offering to repurchase all of the shares held by our significant stockholder, KCK Ltd.
+Added: We intend to use the remaining net proceeds from the offering for general corporate purposes, which may include clinical trial and other research and development expenses, selling, general and administrative expenses, debt reduction and working capital.
Our Growth Strategies
We expect that the near-term growth of our business will be primarily driven by new patients being treated with our RNS System.
−Removed: We believe the following strategies will contribute to growth in initial patient implants and
−Removed: advance our mission to dramatically improve clinical outcomes and quality of life for patients living with epilepsy and other disabling brain disorders:
−Removed: • Drive adoption of our RNS System .
+Added: We believe the following strategies will contribute to growth in initial patient implants and advance our mission to dramatically improve clinical outcomes and quality of life for patients living with epilepsy and other disabling brain disorders:
+Added: • Drive adoption and utilization of our RNS System within Level 4 CECs .
Our commercial efforts have primarily been focused on the Level 4 CECs where drug-resistant focal epilepsy patients are actively seeking treatment.
In 2024 there were approximately 200 Level 4 CECs in the United States.
−Removed: Additionally, as a result of the FDA approval of a PMA-S, our sales team now has the opportunity to target all epileptologists and functional neurosurgeons practicing outside of Level 4 CECs to facilitate the continued management of patient care, either in the community or through referral into Level 4 CECs.
−Removed: Our focused commercial organization consists of Therapy Consultants and Field Clinical Engineers who support our customers.
−Removed: We believe that with incremental additional resources, our commercial organization will be able to grow utilization and adoption at Level 4 CECs and in the community.
+Added: We estimate that there are approximately 1,200 epileptologists affiliated with these centers, approximately five to seven per center on average.
+Added: We believe the remaining epileptologists in our existing accounts who are not currently prescribing the RNS System represent a significant potential opportunity to drive efficient growth.
+Added: Our partnership with DIXI Medical further enhances our ability to drive adoption and utilization by giving our representatives access to epilepsy monitoring units in Level 4 CECs, generating earlier opportunities to provide education and awareness about the RNS System.
+Added: • Expand RNS System access outside of Level 4 CECs, in the community .
+Added: Our sales team has begun to target epileptologists and functional neurosurgeons practicing outside of Level 4 CECs to expand access to RNS therapy, both in the community and through referral of patients to Level 4 CECs.
+Added: As we expand our footprint, we plan to continue to drive increased adoption and utilization of our RNS System within new and existing accounts by (i) growing the number of epileptologists recommending our system within each customer account, (ii) increasing utilization of our system by prescribers, and (iii) expanding our referral pathways to increase the number of patients with drug-resistant epilepsy that are referred to CECs for the care that they need.
+Added: We believe that with incremental additional resources, our focused commercial organization will be able to grow adoption and utilization both at Level 4 CECs and in the community.
Our goal is to establish our RNS System as a standard treatment for drug-resistant focal epilepsy patients by engaging in targeted, efficient sales and education efforts to expand our footprint.
−Removed: • Increase utilization and adoption of our RNS System within CECs and in the Community .
−Removed: As we expand our footprint, we plan to continue to drive increased utilization and adoption of our RNS System within new and existing accounts.
−Removed: We expect to accomplish this by (i) growing the number of epileptologists recommending our system within each customer account, (ii) increasing utilization of our system by prescribers, and (iii) expanding our referral pathways to increase the number of patients with drug-resistant epilepsy that are referred to CECs for the care that they need.
−Removed: ◦ Growing the number of epileptologists recommending our system :
−Removed: We estimate that there are approximately 1,200 epileptologists affiliated with the approximately 200 Level 4 CECs in the United States and that this number will continue to grow as more clinicians are trained in the specialty.
−Removed: Additionally, there are approximately 1,800 more epileptologists practicing outside of Level 4 CECs in the community setting.
−Removed: Epileptologists are the clinicians who prescribe the course of epilepsy treatment, including our RNS System.
−Removed: On average there are approximately five to seven epileptologists affiliated with each Level 4 CEC in the United States and varying numbers of epileptologists in the community.
−Removed: We believe the remaining epileptologists in our existing accounts represent a significant potential opportunity to drive efficient growth.
−Removed: To facilitate adoption by these clinicians, we plan to continue our efforts to streamline our RNS System through product enhancements such as the nSight Platform, conducting training and professional education programs, facilitating peer-to-peer dialogue and forums, communicating our exceptional clinical results, and releasing product enhancements that simplify the user experience.
−Removed: ◦ Increasing utilization of our RNS System by prescribers :
−Removed: While we have achieved significant commercial adoption of our RNS System to date, our target market remains highly underpenetrated and represents a significant opportunity for growth.
−Removed: We estimate that approximately 48% of the 1.2 million drug-resistant epilepsy patients are adults with focal epilepsy and that the clinical and technology benefits of our RNS System are such that it is an attractive therapy for many of these patients.
−Removed: We plan to increase penetration of our target market by increasing utilization by the epileptologists that are already prescribing our RNS System.
−Removed: We have seen that utilization typically increases once clinicians become familiar with the technology and experience the benefits that our RNS System and long-term iEEG data bring to improving patient care.
−Removed: To drive increased utilization, our Therapy Consultants and Field Clinical Engineers are focused on providing information that epileptologists can reference in developing appropriate patient selection protocols and partnering with epilepsy programs to more fully incorporate our RNS System into their practice.
−Removed: We also engage in collaborative clinical research with epileptologists and neurosurgeons to provide additional data relevant to patient selection, patient care, and RNS treatment approaches.
−Removed: ◦ Driving increased referrals of appropriate drug-resistant epilepsy patients to Level 4 CECs :
−Removed: While we estimate that there are approximately 1.2 million patients with drug-resistant epilepsy in the United States, only approximately 50,000 new patients are treated in a Level 4 CEC annually.
−Removed: We believe there is a significant opportunity to increase referrals of patients who could benefit from our RNS System to Level 4 CECs where they can receive specialized care.
−Removed: To accomplish this, we will expand
−Removed: our community efforts to not only grow utilization and adoption outside of Level 4 CECs, but also to directly build referral pathways, and drive awareness by engaging epilepsy patients and caregivers through our advocacy partnerships and marketing initiatives such as digital and social media campaigns, advertising, patient education, and patient ambassador programs.
−Removed: In addition, we plan to increase awareness of our RNS System amongst clinicians who treat epilepsy patients early in their care, including general neurologists and epileptologists who practice outside of Level 4 CECs, through targeted education and outreach designed to not only drive care in the community, but also to drive patient referrals to Level 4 CECs.
−Removed: ◦ Improved visibility into patient pipeline :
−Removed: In August 2022, we entered into an exclusive distribution agreement, or the Distribution Agreement, with DIXI Medical USA Corp., or DIXI Medical, pursuant to which we became the exclusive U.S.
−Removed: distributor of DIXI Medical’s product line beginning in October 2022.
−Removed: DIXI Medical is a subsidiary of a European company that pioneered the development of stereo electroencephalography, or Stereo EEG, electrodes and related products.
−Removed: These products are used in the epilepsy monitoring units, or EMUs, of comprehensive epilepsy centers to determine where epileptic seizures originate.
−Removed: In addition to providing us with an incremental revenue stream, the DIXI Medical partnership provides us with improved visibility of patients moving through the EMUs, many of whom may be candidates for our RNS System.
−Removed: This synergistic partnership leverages our field organization that is already calling on the same customers and supports our objective to engage earlier in the diagnostic and therapy selection process.
• Broaden indications for our RNS System to include patients with generalized epilepsy and patients under age 18.
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The remaining patients include approximately 40%, or 20,000 patients with drug-resistant generalized epilepsy and approximately 12%, or 6,000 patients under the age of 18 with drug-resistant focal epilepsy.
−Removed: Supported by a growing body of evidence published in peer-reviewed journals, we believe that our current RNS System may be able to effectively treat these expanded patient populations without significant modifications to our existing product and we are pursuing clinical studies to support label expansion for these indications.
−Removed: We have FDA approval for an IDE to treat drug-resistant focal epilepsy in adolescent patients between ages 12 and 17.
−Removed: In December 2023, we finished enrolling and implanting the requisite number of patients for FDA submission in our clinical trial to evaluate RNS System use in the generalized epilepsy population.
−Removed: We currently do not believe we will need to modify our RNS System for potential use in patients under the age of 18 or in generalized epilepsy;
−Removed: however, we will need to complete our clinical studies and obtain FDA approval prior to marketing the RNS Systems for these indications.
+Added: Supported by a growing body of evidence published in peer-reviewed journals, we believe that our current RNS System may be able to effectively treat these expanded patient populations, and we are pursuing clinical studies to support label expansion for these indications.
+Added: In March 2024, we finished implanting patients in our clinical trial to evaluate RNS System use in the generalized epilepsy population.
+Added: We do not believe we will need to modify our RNS System for potential use in patients under the age of 18 or in generalized epilepsy;
+Added: however, we will need to complete our clinical studies and obtain FDA approval prior to marketing the RNS System for these indications.
• Continue building and using our unique data asset and our monitoring and analysis capabilities.
−Removed: Our RNS System is the only commercially-available closed-loop system that is not only able to deliver therapy, but continuously monitors, analyzes and records brain activity.
−Removed: In November 2023, we entered into a collaboration agreement with Rapport Therapeutics, or Rapport, a clinical-stage biotechnology company, to leverage our RNS System’s unique biomarker monitoring and data analysis capabilities.
+Added: Our RNS System is the only commercially available closed-loop system that is not only able to deliver therapy, but also continuously monitors, analyzes and records brain activity.
+Added: As we continue to derive insights from AI-driven analyses of our unique and extensive brain data set to further improve the effectiveness of RNS therapy, we believe our data and analyses also have the potential to support more efficient development of other epilepsy therapies through collaborations with third parties.
+Added: In November 2023, we entered into a collaboration agreement with Rapport Therapeutics, Inc., or Rapport, a clinical-stage biotechnology company, to leverage our RNS System’s unique biomarker monitoring and data analysis capabilities.
The collaboration evaluates biomarker changes in currently implanted RNS System patients that have enrolled in Rapport’s clinical trial of its product candidate.
−Removed: Pursuant to this agreement, we will provide information to Rapport that will help evaluate the impact of their product candidate on certain biomarkers of patients with focal onset seizures.
+Added: Pursuant to this agreement, we provide information to Rapport that will help evaluate the impact of their product candidate on certain biomarkers of patients with focal onset seizures.
We may enter into similar collaborations with other companies.
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While we are presently focused on addressing the significant domestic market opportunity, we believe our RNS System offers an attractive value proposition for patients, providers, and payors in the large potential market outside of the United States and may additionally seek to expand our operations to reach the approximately 16.5 million drug-resistant epilepsy patients globally.
−Removed: While our RNS System is not yet approved for sale outside the United States, we plan to pursue regulatory approvals and reimbursement with a priority on markets in which we see significant potential opportunity.
−Removed: • Pursue additional indications, including outside of epilepsy .
−Removed: We believe our versatile, closed-loop, brain-responsive neuromodulation platform has potential applications in other brain disorders including depression, impulse control disorders, memory disorders, and post-traumatic stress disorder.
−Removed: For each of these four conditions, we are collaborating with academic investigators in early IDE feasibility studies using our RNS System in patients.
+Added: While our RNS System is not yet approved for sale outside the United States, other than limited case-by-case approvals pursuant to a special program in Canada, if we determine to expand internationally, we will plan to pursue regulatory approvals and reimbursement with a priority on markets in which we see significant potential opportunity.
+Added: • Pursue additional indications outside of epilepsy .
+Added: We believe our versatile, closed-loop, brain-responsive neuromodulation platform has potential applications in other brain disorders including depression, memory disorders, and post-traumatic stress disorder.
+Added: For each of these conditions, we are collaborating with
+Added: academic investigators in early IDE feasibility studies using our RNS System in patients.
In the future, depending on the outcome of these studies, we may seek regulatory approval to commercialize our technology for these or other indications.
−Removed: We will need to conduct additional studies to determine if any modifications to the RNS System are necessary and to obtain FDA approval prior to marketing the RNS Systems for any new indications, including for potential use in treating other brain disorders including depression, impulse control disorders, memory disorders, and post-traumatic stress disorder.
−Removed: Our Market and Industry
−Removed: Overview of Drug-Resistant Epilepsy
−Removed: Epilepsy is a devastating chronic disorder characterized by a tendency of the brain to produce sudden abnormal bursts of electrical energy that disrupt brain functions and cause seizures.
−Removed: The symptoms of the seizure depend on the region of the brain from which the discharges arise and the extent to which they spread.
−Removed: If the seizure remains restricted to less than half of the brain, then symptoms may include an alteration in speech, memory, motor, sensory, or vision function.
−Removed: Most often, there is confusion.
−Removed: If the seizures involve all of the brain, there is loss of consciousness.
−Removed: In the most severe case, the patient may have a generalized tonic-clonic seizure, which is also referred to as a convulsion or Grand Mal seizure, with uncontrolled jerking of the arms and legs.
−Removed: After the seizure, patients may remain confused and disoriented for minutes or even hours.
−Removed: Seizure-related injuries include burns, head and skeletal trauma, abrasions, lacerations, and potentially life-threatening accidents.
−Removed: According to the World Health Organization, approximately 50 million people worldwide have epilepsy and according to the Centers for Disease Control and Prevention, 3.4 million people in the United States were living with epilepsy in 2015, making it the fourth most common neurological disorder in the United States.
−Removed: First line treatment for epilepsy is antiepileptic drugs, or AEDs.
−Removed: While AEDs can help control seizures for many individuals, approximately one third of patients do not achieve complete seizure control, which is defined as seizure freedom without life-impacting side effects associated with treatment.
−Removed: According to a 2018 article published in JAMA Neurology, the chance of achieving complete seizure control after failing two AED regimens is less than 5%.
−Removed: The study concluded that despite the availability of over 15 new drugs in the past decade, overall complete seizure control in newly diagnosed patients has not fundamentally changed.
−Removed: This population of epilepsy patients is referred to as drug-resistant and we estimate that there are approximately 1.2 million drug-resistant epilepsy patients in the United States.
−Removed: Drug-resistant epilepsy is a costly disorder in terms of its impact on individuals and their families as well as on society.
−Removed: According to a 2020 article in the American Journal of Managed Care, estimated direct costs of epilepsy in the United States are approximately $28 billion per year, disproportionately accrued by individuals with uncontrolled drug-resistant epilepsy.
−Removed: Importantly, these direct costs do not consider indirect costs from losses in quality of life and productivity, which are estimated to constitute the majority of the cost burden of epilepsy.
−Removed: Patients with drug-resistant epilepsy struggle with a variety of life-impacting challenges including psychological dysfunction, social stigmatization, reduced quality of life, and increased risk of mortality.
−Removed: The unpredictable nature of seizures limits the ability of patients to live independently, and promotes increased social isolation.
−Removed: Studies have shown that children with epilepsy often receive inadequate schooling, which leads to developmental gaps as these children mature and, for adults, unemployment levels are approximately two to three times higher than the overall population.
−Removed: Based on a social security death index, people with drug-resistant epilepsy have a cumulative probability of death of 8.7% at six years from the time of diagnosis at an epilepsy center, and patients with uncontrolled epilepsy have a nine to thirteen times higher risk of death than patients with epilepsy who are seizure-free.
−Removed: Epilepsy can be classified into two categories:
−Removed: focal epilepsy and generalized epilepsy.
−Removed: Approximately 60% of epilepsy patients have focal epilepsy, which is characterized by electrical discharges that originate in a specific part
−Removed: of the brain.
−Removed: Focal epilepsy patients typically have one or two seizure foci, or sites in the brain from which the electrical discharge originates.
−Removed: Generalized epilepsy, which describes approximately 40% of epilepsy patients, is characterized by widespread electrical discharges that involve the entire brain at once.
−Removed: Onset of epilepsy can occur at any age.
−Removed: Of the approximately 1.2 million patients in the United States with drug-resistant epilepsy, we estimate that approximately 80% are adults, meaning 18 years of age or older, of whom approximately 575,000 have focal epilepsy.
−Removed: The remaining approximately 20% of patients are pediatric, meaning under the age of 18, and we estimate that approximately 145,000 of these pediatric patients have focal epilepsy.
−Removed: Overview of Epilepsy Care
−Removed: The National Association of Epilepsy Centers, or NAEC, which is considered the primary accreditation organization for epilepsy centers in the United States, classifies epilepsy care into four levels.
−Removed: Levels 1 and 2 care include an evaluation in a primary care physician’s office or a consultation with a general neurologist while levels 3 and 4 care take place at specialized epilepsy centers called comprehensive epilepsy centers, or CECs.
−Removed: CECs are typically tertiary care hospitals that provide specialized epilepsy care.
−Removed: Level 3 CECs generally provide basic neurodiagnostic evaluations and may also offer noninvasive surgical evaluations, straightforward resective or ablative surgery, and implant VNS devices, but do not perform intracranial evaluations or complex resective or ablative surgery.
−Removed: In addition to offering the services performed at Level 3 CECs, Level 4 CECs offer the most comprehensive and complex epilepsy care, including a broad range of surgical procedures for epilepsy.
−Removed: The NAEC recommends that patients whose seizures have not been brought under control after three months of care by a primary care physician or after 12 months of seeing a general neurologist be referred to a Level 3 or Level 4 CEC.
−Removed: Most drug-resistant epilepsy patients in the United States begin their care at physician offices or community hospitals, with Level 1 or 2 care by primary care physicians or general neurologists.
−Removed: We estimate that approximately 50,000 drug-resistant epilepsy patients are referred to, and treated in, Level 4 CECs annually, of which approximately 48%, or 24,000, are adults with focal epilepsy.
−Removed: Our Market Opportunity
−Removed: Our paradigm-shifting RNS System is currently indicated for use in adults with drug-resistant focal epilepsy and we believe that it is an attractive therapeutic option for these patients.
−Removed: We estimate that there are approximately
−Removed: 575,000 adult drug-resistant focal epilepsy patients in the United States, which reflects a total addressable market opportunity of approximately $27 billion for our RNS System.
−Removed: Our commercial efforts have been focused on the CECs in the United States that provide comprehensive epilepsy care.
−Removed: As such, we view our core annual market as the 50,000 drug-resistant epilepsy patients who present at Level 4 CECs each year, of which 48% are adult drug-resistant focal epilepsy patients.
−Removed: We estimate that this addressable patient pool of 24,000 patients represents an annual market opportunity of approximately $1.1 billion for initial RNS System implants, and we expect that it will continue to grow as the number of CECs increase, the number of epileptologists grows, and as referral pathways are expanded so more patients can be referred to Level 4 CECs.
−Removed: In 2023, we received FDA approval of a PMA-S, which updated the qualification criteria for centers and clinicians that may prescribe and implant the RNS System.
−Removed: This PMA-S approval allows us to expand our commercial efforts to target and be able to qualify the approximately 1,800 additional epileptologists outside of Level 4 CECs and the entire population of functional neurosurgeons, empowering them to provide the RNS System as a much-needed treatment option for their patients and expanding our current annual core market opportunity to all 575,000 adults in the United States with drug-resistant focal epilepsy, representing approximately $27 billion for initial RNS System implants.
−Removed: Our RNS System has an estimated average battery life of nearly 11 years, an increase from the previous model of the device.
−Removed: The sale of replacement neuromodulation devices provides a recurring revenue stream that is additive to the annual market opportunity for initial implants.
−Removed: The average age of initial implant patients in our clinical studies was approximately 34 and we expect that many of our patients will return multiple times for replacement procedures over their lifetimes.
−Removed: Supported by evidence published in peer reviewed journals, we believe that our current RNS System may also be able to effectively treat drug-resistant generalized epilepsy patients as well as patients under age 18 with drug-resistant focal epilepsy and we are pursuing clinical studies to support label expansion for these indications.
−Removed: We have FDA approval for an IDE study to treat drug-resistant focal epilepsy in patients under age 18 and began enrollment for that study in late 2021.
−Removed: In February 2021, our RNS System received Breakthrough Device Designation from the FDA for the treatment of idiopathic generalized epilepsy, or IGE.
−Removed: IGE is a subset of generalized epilepsy, is understood to have a strong underlying genetic basis and constitutes as many as one third of all epilepsies.
−Removed: We believe that this breakthrough designation will help patients living with IGE have more timely access to our RNS System.
−Removed: In the second half of 2021, we also received IDE approval to initiate a clinical study in generalized epilepsy and in December 2023, we completed enrolling and implanting the number of patients required for FDA submission.
−Removed: Based on the additional approximately 6,000 drug-resistant focal epilepsy patients under the age of 18 and approximately 20,000 drug-resistant generalized epilepsy patients that were treated at Level 4 CECs in 2019, we estimate that these patient populations represent total market opportunities of approximately $6 billion and $22 billion, respectively.
−Removed: The adolescent population, for which we expect to seek indication expansion, represents a subset of the overall pediatric market opportunity.
−Removed: Current Treatment Alternatives and Their Limitations
−Removed: There are two primary treatment alternatives for drug-resistant focal epilepsy patients:
−Removed: (i) an ablative or resective surgery to remove or destroy the brain tissue associated with the seizure onset, or (ii) implantation of a neuromodulation device to stimulate seizure-causing brain circuits and prevent or abort seizures.
−Removed: In order to determine the appropriate course of care, patients undergo a diagnostic process to determine whether they have focal or generalized epilepsy.
−Removed: If they have focal epilepsy, specific locations of seizure onset may also be determined.
−Removed: For patients with only one discrete seizure focus, resective or ablative surgery may be an effective option to eliminate seizure activity if the focus is clearly identified by electroencephalogram, or EEG, and magnetic resonance imaging, or MRI, and is safe to resect.
−Removed: However, we estimate that only approximately 20% of drug-resistant focal epilepsy patients meet these requirements and are willing to undergo a surgery.
−Removed: For the approximately 80% of drug-resistant focal epilepsy patients who are not ideal candidates for resective or ablative epilepsy surgery, neuromodulation devices are an attractive treatment alternative.
−Removed: In fact, the ILAE guidelines state that patients with drug-resistant epilepsy who may not appear to be appropriate candidates for resective or ablative surgery should still be referred to a tertiary epilepsy center to evaluate potential other interventions.
−Removed: The first neuromodulation device approved for epilepsy, which is a VNS device, has been available for over 20 years and, in controlled trials, has demonstrated success in reducing seizure frequency.
−Removed: Interest in neuromodulation devices is rising as our RNS System and DBS have more recently been approved for the treatment of focal epilepsy, and as physicians have become more comfortable with, and experienced in, incorporating neuromodulation devices into their practice.
−Removed: Growing awareness of the risks and limited success of resective and ablative surgery are also driving adoption.
−Removed: The chart below illustrates how physicians may evaluate treatment options for their patients.
−Removed: Resective and ablative surgery
−Removed: Surgery has been used to treat epilepsy for more than 100 years.
−Removed: Resective or ablative surgery is used in current clinical practice as a treatment alternative for the approximately 20% of drug-resistant epilepsy patients who are willing to have the surgery and have a discrete, single seizure focus that is determined to be safe to resect or ablate in a way that is likely to result in complete seizure control.
−Removed: The remaining approximately 80% of patients are unlikely to become seizure-free after a resective or ablative surgery, are at risk for damage to functions such as language, movement, sensation, memory, or vision, or do not want to have resective or ablative surgery.
−Removed: For people with more than one seizure focus or with a large focus, the possibility of meaningful improvement in seizures with resective or ablative surgery is lower and the risks to neurological function are usually higher.
−Removed: If seizures are generalized at onset, then resective or ablative surgery does not offer a benefit.
−Removed: Surgical treatment options include focal resection and, more recently, laser ablation.
−Removed: Focal resection procedures are invasive surgeries that involve permanently removing the part of the brain that is primarily responsible for the seizure onset.
−Removed: Laser ablation surgeries, which use thermal energy to permanently destroy brain tissue, have emerged as a less invasive alternative to surgical resection.
−Removed: However, multiple publications have concluded that laser ablation is not as effective as larger resective procedures.
−Removed: Only approximately 20% of drug-resistant focal epilepsy patients have a focus that is both safe to remove and likely to result in seizure control if removed, and are also willing to undergo resective or ablative surgery.
−Removed: Of those who do, only half are seizure-free two years after surgery and many experience impairment in some aspect of
−Removed: neurological function.
−Removed: The most common and successful type of resective surgery, temporal lobectomy, leaves 30 to 40% of patients with seizures one year after surgery and many patients are left with neurological side effects, including impaired memory, reduced naming ability, and loss of some part of their visual field.
−Removed: Implantable neuromodulation devices
−Removed: In addition to our RNS System, there are two neuromodulation devices that are approved by the FDA to treat focal epilepsy:
−Removed: Vagus Nerve Stimulation, or the VNS System, marketed by LivaNova:
−Removed: and Deep Brain Stimulation, or the DBS System, marketed by Medtronic.
−Removed: Neuromodulation devices offer a non-destructive, reversible treatment option that provides substantial seizure reduction and quality of life improvements, without the risk of neurocognitive deficits associated with resective or ablative surgeries.
−Removed: Unlike AEDs and resective or ablative surgery, for which success may decline over time within individual patients, neuromodulation therapies have demonstrated sustained and, in many cases, even improved success over time.
−Removed: The ILAE guidelines state that drug-resistant epilepsy patients who may not appear to be appropriate candidates for resective or ablative surgeries should still be referred to a tertiary epilepsy center to evaluate potential other interventions.
−Removed: The VNS System was approved by the FDA in 1997 as an adjunctive therapy in reducing the frequency of seizures in patients with drug-resistant focal epilepsy.
−Removed: The VNS System provides scheduled extracranial stimulation delivered from a pectorally implanted pulse generator with the lead tunneled under the skin to the left vagus nerve in the neck next to the carotid artery.
−Removed: Therapy is typically delivered in a repeating pattern of 30 seconds of stimulation followed by five minutes without stimulation.
−Removed: The most recent commercially available version of VNS provides additional stimulation when the heart rate exceeds a preset limit.
−Removed: Although heart rate increases occur during some seizures, this indicator lags behind the brain activity changes that cause seizures.
−Removed: The DBS System was approved by the FDA in 2018 for the treatment of focal epilepsy.
−Removed: Bilaterally implanted intracranial electrodes are placed in each anterior thalamic nucleus, which have connections to other brain regions.
−Removed: The electrodes are attached to a pectorally implanted pulse generator using connecting wires that are tunneled under the scalp and skin of the neck and chest.
−Removed: DBS delivers non-responsive, sometimes referred to as open-loop, scheduled stimulation and has limited sensing and recording capability.
−Removed: Therapy is typically delivered in a repeating pattern of one minute of stimulation followed by five minutes without stimulation.
−Removed: Published data from separate prospective FDA approved studies run by LivaNova and Medtronic in adults with focal epilepsy demonstrated that the VNS System and DBS System achieved median reductions in seizure frequency at one year of 35% and 44%, respectively.
−Removed: The MORE Registry of post-approval use of DBS for epilepsy found that the seizure reduction rates were lower than in the original pivotal trial, with 33% median seizure reduction at two years, as compared to the 56% reduction seen in the pivotal trial.
−Removed: Both VNS and DBS devices stimulate a fixed anatomical target that is not specific to where seizures start in the brain.
−Removed: They also use the same treatment paradigm for all patients and are intermittently stimulating the brain using a non-varying schedule in an attempt to prevent seizures rather than responding in real-time to the patient-specific electrical activity that precedes a seizure.
−Removed: Furthermore, VNS devices do not record brain data for physicians to use to assess seizure burden and treatment effectiveness.
−Removed: While the latest generation of DBS devices do record a limited sample of data, these data are not typically as relevant for epilepsy as they are for movement disorders.
−Removed: Accordingly, physicians generally have to rely primarily on patient self-reported seizure data, which is typically unreliable and incomplete, in order to titrate treatment for individual patients.
−Removed: As such, we believe VNS and DBS devices have limited ability to benefit from the insights afforded by brain data in order to improve patient outcomes.
−Removed: Additionally, although abnormal electrical activity typically occurs less than 1% of the time in epilepsy patients, VNS and DBS devices stimulate an aggregate of multiple hours per day, regardless of the state of the brain, increasing the likelihood of stimulation side effects.
−Removed: Published data from FDA approved trials for VNS indicate that side effects of stimulation include voice alterations, hoarseness, throat pain, cough, and difficulty swallowing while published data from FDA approved trials for DBS indicate that side effects of stimulation include 13% of patients suffering from depression and 15% suffering from memory impairment, which is consistent with the rates seen in the MORE Registry of post-approval use of DBS for epilepsy.
−Removed: Other studies of DBS report sleep disruption as a side effect.
−Removed: We believe our RNS System addresses the significant unmet need for an epilepsy treatment option that can improve outcomes without causing stimulation related side effects for the large portion of drug-resistant focal epilepsy patients who are not ideal candidates for surgery or who do not want to undergo a destructive surgical procedure.
+Added: We will need to conduct additional studies to determine if any modifications to the RNS System are necessary and to obtain FDA approval prior to marketing the RNS System for any new indications.
+Added: Our RNS System
Our RNS System, which is a compilation of several of our products, is a paradigm-shifting approach to treating epilepsy that combines the power of continuous iEEG monitoring with responsive neuromodulation.
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We believe our RNS System is superior in tolerability and efficacy to other neuromodulation approaches and provides clinicians with actionable insights based on their patients’ brain activity, facilitating better treatment decisions and optimizing patient care.
−Removed: RNS System Overview
−Removed: Our RNS System includes our RNS neurostimulator, our cortical strip leads and depth leads, our Patient Remote Monitor, as well as other implantable and non-implantable accessories.
−Removed: As part of the initial implant procedure, the number and configuration of leads implanted as well as the implantable and non-implantable accessories used in the procedure are determined by the clinicians depending on individual patient need and clinician preference and a Patient Remote Monitor is typically included.
+Added: Our RNS System includes our RNS neurostimulator, our cortical strip leads and depth leads, and our Patient Remote Monitor, as well as other implantable and non-implantable accessories.
+Added: As part of the initial implant procedure, the number and configuration of leads implanted as well as the implantable and non-implantable accessories used in the procedure are determined by the clinician depending on individual patient need and clinician preference and a Patient Remote Monitor is typically included.
During a typical replacement implant procedure performed when the battery in our RNS neurostimulator reaches end of service, the RNS neurostimulator is replaced, while the previously implanted RNS leads remain in place and a new Patient Remote Monitor is typically included.
−Removed: Clinicians continue having access to our Physician Tablet and Patient Data Management System, or PDMS, and our nSight Platform, which facilitate ongoing patient monitoring and streamline patient support.
+Added: Our product offerings also include our Physician Tablet, our Patient Data Management System, or PDMS, and our nSight Platform, which facilitate ongoing patient monitoring and streamline patient support.
We developed our RNS System to address the individualized nature of drug-resistant epilepsy with a differentiated technology that provides personalized, data-driven treatment.
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In addition to the implantable components of our RNS System, our RNS System also includes external components such as the Patient Remote Monitor, as well as optional accessories.
−Removed: Our Patient Remote Monitor is provided to each patient in order to collect and transmit data from the neurostimulator to our Patient Data Management System, a secure online database.
+Added: Our Patient Remote Monitor is provided to each patient in order to collect and transmit data from the neurostimulator to our PDMS, a secure online database.
It consists of a handheld wand and a specially programmed tablet or laptop computer.
−Removed: The patient holds the wand adjacent to the implanted device to wirelessly upload the data from the neurostimulator to the tablet or laptop, and then sends that encrypted data to our Patient Data Management System using an internet connection.
+Added: The patient holds the wand adjacent to the implanted device to wirelessly upload the data from the neurostimulator to the tablet or laptop, and then sends that encrypted data to our PDMS using an internet connection.
Additionally, we provide our Physician Tablet and access to our PDMS and nSight Platform for use with our RNS System.
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While the patient is in clinic, the clinician can look at real time iEEG data or test stimulation settings.
−Removed: Our Patient Data Management System is a secure online database that collects data that have been recorded in our RNS System.
+Added: Our PDMS is a secure online database that collects data that have been recorded by our RNS System.
These data, which include all programmed parameters, detections, stimulations, and stored iEEG activity for RNS System patients, can be accessed through our Physician Tablet or from any internet browser.
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This information, combined with the patient’s own reports, is used by the clinicians to make treatment decisions.
−Removed: In addition to the extensive dataset available on our Patient Data Management System, our nSight Platform is designed to provide clinicians with personalized patient reports as well as programming suggestions.
+Added: In addition to the extensive data set available on our PDMS, our nSight Platform is designed to provide clinicians with personalized patient reports as well as programming suggestions.
Our nSight Platform, which is designed to streamline patient care, includes objective iEEG data recorded by our RNS System, patient-reported seizure diary data, prior programmed settings, and programming suggestions which are available in a simple and comprehensive report that provides the clinician actionable information about their patient’s seizure trends and treatment outcomes.
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As we collect iEEG data from our RNS System, our database of iEEG records continues to grow.
−Removed: As of December 31, 2023, over 5,000 epilepsy patients have received our RNS System, yielding an extensive database of over fifteen million iEEG records.
+Added: As of December 31, 2024, over 6,000 epilepsy patients have received our RNS System, yielding an extensive database of over nineteen million iEEG records.
We believe that we are able to continue to learn and innovate by leveraging this database and our monitoring and data analytics capabilities, thereby improving and enhancing our products and creating actionable insights for clinicians that improve clinical outcomes for patients.
−Removed: RNS System – Patient and Clinician Experience
+Added: Patient and Clinician Experience
Once an adult patient has been determined to have drug-resistant focal epilepsy, we believe the patient should be considered for our RNS System.
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Prior to the first in-person follow up visit, which typically occurs approximately two weeks to four weeks after the implant procedure, an epileptologist will review the iEEG data recorded by our RNS System and identify patient specific patterns that are associated with the early onset of seizures.
−Removed: During the follow-up visit, the epileptologist will make programming adjustments to the device’s detection parameters in order to optimize for early detection.
+Added: During the follow-up visit, the epileptologist will make
+Added: programming adjustments to the device’s detection parameters in order to optimize for early detection.
Once the patient-specific detection parameters are established, the epileptologist will turn on the stimulation feature, activating the closed-loop treatment of our RNS System.
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In 2019, more than 90% of patients whose RNS System reached the end of its battery life chose to have a replacement RNS System implanted.
−Removed: Key Clinical Advantages of our RNS System
+Added: Key Clinical Advantages
We believe the key advantages of our RNS System relative to both alternative neuromodulation devices and resective or ablative surgery include:
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In our Pivotal Study, patients experienced a median reduction in seizure frequency of 44% after the first year.
−Removed: The patients from the Pivotal Study, all of whom received implants prior to 2010, were followed in a LTT in which outcomes reached a 75% median reduction in seizure frequency at nine years.
+Added: The patients from the Pivotal Study, all of whom received implants prior to 2010, were followed in a Long-term Treatment Trial, or LTT, in which outcomes reached a 75% median reduction in seizure frequency at nine years.
28% of these patients, who had previously experienced disabling seizures for an average of 20 years, had at least 6 months of seizure freedom and approximately 20% achieved one year or more of seizure freedom.
Additionally, we believe the insights obtained from our extensive brain data set are driving improvements in overall therapy effectiveness across patient cohorts over time.
−Removed: The real-world results published in 2020 from a retrospective study across eight epilepsy centers with patients implanted between 2013 and 2018 showed a statistically significant median seizure frequency reduction of 67% at one year (p<0.05).
−Removed: This is consistent with the interim one-year results of our ongoing prospective Post-Approval Study, increasing to 82% by year three, which we believe is the highest published seizure frequency reduction for any neuromodulation study in adults with focal onset seizures.
−Removed: Importantly, peer-reviewed studies have also indicated that our RNS System demonstrates similar efficacy outcomes regardless of the region of the brain being treated, whether there are one or two seizure foci, and whether the patient has been treated with VNS or resective or ablative surgery.
+Added: The real-world results published in 2020 from a retrospective study across eight epilepsy centers with patients implanted between 2013 and 2018 showed a statistically significant median seizure frequency reduction of 67% at one year (p<0.05), increasing to an 82% reduction in seizures by year three, which we believe is the highest published seizure frequency reduction for any neuromodulation study in adults with focal onset seizures.
+Added: Recent three-year data from our Post-Approval Study confirmed this reduction in seizure frequency and showed a 100% reduction in seizure frequency among the top quartile of patients.
+Added: Importantly, peer-reviewed studies have also indicated that our RNS System demonstrates similar efficacy outcomes regardless of the region of the brain being treated, whether there are one or two seizure foci, and whether the patient has been previously treated with VNS or resective or ablative surgery.
+Added: Real World Study Results (Light Blue);
+Added: Original FDA Study Results (Dark Blue)
Lack of stimulation-related side effects.
Our clinical studies have collectively demonstrated that RNS System therapy is well-tolerated.
−Removed: Patients do not perceive the therapeutic stimulation, which is delivered only when that abnormal activity occurs.
−Removed: Unlike other neuromodulation devices for epilepsy, which provide hours of stimulation each day to non-specific targets and have been shown to negatively impact sleep, mood, memory, or vocal characteristics, our RNS System stimulates the seizure targets and only when needed, resulting in a highly effective therapy with approximately three minutes of stimulation on average per day in total.
+Added: Patients do not perceive the therapeutic stimulation, which is delivered only when abnormal activity occurs.
+Added: Unlike other neuromodulation devices for epilepsy, which provide hours of stimulation each day and have been shown to negatively impact sleep, mood, memory, or vocal characteristics, our RNS System provides stimulation only when needed, resulting in a highly effective therapy with approximately three minutes of stimulation on average per day in total.
Quality of life, cognition, and mood improvement.
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Reduction in sudden unexpected death in epilepsy.
−Removed: Epilepsy patients, particularly those with uncontrolled epilepsy, face a risk of sudden and unexpected death as a result of their condition.
+Added: Epilepsy patients, particularly those with uncontrolled epilepsy, face a risk of what is called sudden unexpected death in epilepsy, or SUDEP.
Each year, about 1 in 150 patients with uncontrolled epilepsy will die from SUDEP.
According to clinical studies, the SUDEP rate is approximately 6.1 per 1,000 patient years in patients with drug-resistant epilepsy and 9.3 per 1,000 patient years in patients referred for resective or ablative surgery.
−Removed: By contrast, data from a published series of 707 patients across our clinical studies and post-market experience indicated that our RNS System was associated with a lower rate of dying from SUDEP of 2.0 per 1,000 patient years relative to other treatment-resistant epilepsy groups.
+Added: By contrast, data from a published series of 707 patients across our clinical studies and post-market experience indicated that our RNS System was associated with a lower rate of dying from SUDEP, 2.0 per 1,000 patient years, relative to other treatment-resistant epilepsy groups.
The results of our prospective clinical studies, which are the largest and longest published studies in the field of neuromodulation for epilepsy, as well as the data that has been published in multiple retrospective studies of our RNS System, provide evidence that our RNS System is a safe and effective treatment for focal onset seizures and offers a lower risk profile than that of resective or ablative surgery.
−Removed: In addition, we believe our RNS System is superior in tolerability and efficacy to other neuromodulation approaches.
−Removed: We anticipate that the accruing evidence
−Removed: base from our ongoing Post-Approval Study and commercial experience with our RNS System will continue to demonstrate strong and improving clinical outcomes over time, which will support continued adoption.
+Added: In addition, we believe our RNS System is
+Added: superior in tolerability and efficacy to other neuromodulation approaches.
+Added: We anticipate that the accruing evidence base from our ongoing Post-Approval Study and commercial experience with our RNS System will continue to demonstrate strong and improving clinical outcomes over time, which will support continued adoption.
Benefits to Other Stakeholders
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For example, many patients who might otherwise schedule a clinic visit because of a concern about seizures can now contact their clinician from their home, who can then review their RNS System data online and provide care remotely.
−Removed: Clinical Data
+Added: Clinical Data Supporting Our RNS System
The safety, effectiveness.
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Data from these studies collectively demonstrate that our RNS System provides significant, sustained, and improving reductions in disabling seizures with enduring improvements in quality of life and cognition for patients with drug-resistant focal epilepsy.
−Removed: Our first prospective clinical trial, the Feasibility Study, was initiated to assess the safety and performance of our RNS System and to provide preliminary evidence of effectiveness for patients living with drug-resistant focal epilepsy.
−Removed: Data from the two-year Feasibility Study supported IDE approval for our two-year Pivotal Study, a double blinded, randomized, sham-stimulation controlled multi-center study that was initiated in 2005 and provided Class I
−Removed: evidence of the safety and effectiveness of our RNS System.
+Added: Our first prospective clinical trial, which we refer to as the Feasibility Study, was initiated to assess the safety and performance of our RNS System and to provide preliminary evidence of effectiveness for patients living with drug-resistant focal epilepsy.
+Added: Data from the two-year Feasibility Study supported IDE approval for our two-year
+Added: Pivotal Study, a double blinded, randomized, sham-stimulation controlled multi-center study that was initiated in 2005 and provided Class I evidence of the safety and effectiveness of our RNS System.
Data from the Pivotal Study supported FDA PMA approval of our RNS System.
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Across the 256 patients that were enrolled in the Feasibility and Pivotal studies, the average age was 34 years old and the patients had experienced an average of 10.2 disabling seizures per month for an average of 19.6 years.
−Removed: All patients had previously tried multiple AEDs, 32% of patients had previously been treated with VNS, and 34% had previously undergone resective or ablative surgery.
+Added: All patients had previously tried multiple anti-epilepsy drugs, or AEDs, 32% of patients had previously been treated with VNS, and 34% had previously undergone resective or ablative surgery.
Feasibility Study
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There was no difference in stimulation-related side effects between active and sham patients in the blinded period and no adverse effects of responsive stimulation on cognitive function or mood.
−Removed: In fact, there were statistically significant improvements in a number of areas of cognitive function, including executive function, language, and memory.
−Removed: Memory improvements were most evident in patients with seizure onsets
−Removed: in memory regions and verbal fluency improvements were most significant in those with seizure onsets in language areas.
+Added: In fact, there were statistically significant improvements in a number of areas of cognitive function, including
+Added: executive function, language, and memory.
+Added: Memory improvements were most evident in patients with seizure onsets in memory regions and verbal fluency improvements were most significant in those with seizure onsets in language areas.
Patients also experienced modest improvements in mood and a decrease in seizure worry at two years of treatment.
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As shown in the graph below, there were statistically significant sustained improvements in overall QOL as well as in every subdomain of QOL for patients who began treatment less than ten years after epilepsy onset at both one and two years of follow-up.
−Removed: Long-Term Treatment Study
+Added: Long-Term Treatment (LTT) Study
The LTT study was a seven-year prospective, open-label study that followed patients originally treated in either the Feasibility or Pivotal Study.
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Post-Approval Study
−Removed: We have completed enrollment for an FDA-mandated prospective open-label “real-world” study of our RNS System in drug-resistant focal epilepsy patients with a planned follow up period of five years.
+Added: We are currently engaged in follow up and data collection for our FDA-mandated prospective open-label “real-world” study of our RNS System in drug-resistant focal epilepsy patients with a planned follow up period of five years, or the Post-approval Study.
+Added: As of November 2024, all patients in the Post-approval Study have completed three years of follow up, and the associated safety and effectiveness data have been submitted to and accepted by the FDA.
In this clinical study, our RNS System was implanted in 324 patients across 32 centers.
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In addition, 38.5% of patients followed for more than one year experienced a greater than 90% reduction in seizure frequency.
−Removed: During this five-year study, 112 SAEs were reported, 21 of which were either associated with the RNS System or were inconclusive as to association with the RNS System.
−Removed: These SAEs included nervous system disorders (such as cerebral or intracranial hemorrhage and nerve paralysis), implant site infections, subdural hematoma, psychogenic seizure, and implant site erosion.
−Removed: Current Studies
+Added: During this ongoing five-year study, 224 SAEs have been reported, 19 of which were attributed to the implant procedure and none of which were attributed as specific to treatment with the RNS System.
+Added: These SAEs included nervous system disorders (such as cerebral or intracranial hemorrhage and tinnitus), implant site infections, subdural hematoma, status epilepticus, and implant site dehiscence.
+Added: We recently announced our primary effectiveness endpoint data in the Post-approval Study.
+Added: Of the 324 patients in the trial across 32 participating centers, 271 patients completed three years in the study and 255 patients provided complete seizure data.
+Added: The data showed that the RNS System efficacy improved over time, with 62.5% median seizure reduction at six months after implant (n=314) and an 82.0% median seizure reduction at 36 months after implant (n=255).
+Added: Additionally, 42.5% of patients experienced a period of seizure-freedom for at least six months, and 22% of patients were seizure free for at least one year.
+Added: Results will be presented at the American Academy of Neurology Annual Meeting, held April 5 through 9, 2025.
+Added: Current Label Expansion Studies
+Added: RESPONSE Study
We are conducting studies to support label expansion for our RNS System in additional epilepsy populations.
We have IDE approval for an open label study of our RNS System in adolescent patients between ages 12 and 17 who have drug-resistant focal epilepsy from one or two foci.
−Removed: The objective of this study is to demonstrate safety and
−Removed: effectiveness in this patient population, and to obtain data on quality of life, neuropsychological function, and social function.
+Added: The objective of this study, referred to as the RESPONSE study, is to demonstrate safety and effectiveness in this pediatric population, and to obtain data on quality of life, neuropsychological function, and social function.
Importantly, our RNS System does not require any modifications to conduct this study.
−Removed: We began enrollment in this study in late 2021.
+Added: We began enrollment in RESPONSE in late 2021.
+Added: We recently announced our collaboration with the National Evaluation System for health Technology, or NEST, and the FDA to pursue the use of real-world data from the Pediatric Epilepsy Research Consortium, or PERC, to supplement the RESPONSE study.
+Added: We are planning to file the expanded label submission to the FDA in the second half of 2025.
+Added: NAUTILUS Study
Supported by evidence published in peer-reviewed journals, we also believe that our current RNS System may be able to effectively treat patients with drug-resistant generalized epilepsy.
In February 2021, our RNS System received Breakthrough Device Designation from the FDA for the treatment of IGE.
−Removed: In the second half of 2021, we received IDE approval to initiate a study in IGE and in December 2023, completed enrolling and implanting the number of patients required for FDA submission.
+Added: In the second half of 2021, we received IDE approval to initiate a study in IGE, called the NAUTILUS study, and in March 2024, we completed implanting patients in NAUTILUS, for a total of 87 patients implanted across 23 centers.
+Added: In March 2025, the last patient is expected to complete one year of follow up post-implant, with the data lock and subsequent commencement of data analyses expected to begin in the second quarter of 2025.
+Added: We plan to use this data to support our expected expanded label submission to the FDA in the second half of 2025 and we anticipate the final patient two-year completion in the first half of 2026.
Commercial Strategy
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We estimate that there are approximately 1,200 epileptologists and 400 neurosurgeons associated with the approximately 200 Level 4 CECs in the United States.
−Removed: We also improve flow of appropriate patients to Level 4 CECs with sales and marketing initiatives designed to enhance awareness of our RNS System and increase referrals of drug-resistant epilepsy patients to these centers.
+Added: We also aim to improve flow of appropriate patients to Level 4 CECs with sales and marketing initiatives designed to enhance awareness of our RNS System and increase referrals of drug-resistant epilepsy patients to these centers.
In 2023, we received FDA approval of a PMA-S, which updated the qualification criteria for centers and clinicians that may prescribe and implant the RNS System.
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We market and sell our RNS System in the United States through a direct sales organization that consists of sales representatives, known as Therapy Consultants, and clinical and programming support specialists, known as Field Clinical Engineers.
−Removed: Our Therapy Consultants are highly skilled and technically trained with substantial experience launching new disruptive therapies, particularly in neuromodulation, and establishing them as a standard of care by increasing clinician adoption and utilization.
+Added: Substantially all of our sales of the RNS System are in the United States.
+Added: Our Therapy Consultants are highly skilled and technically trained with substantial experience launching new disruptive therapies, particularly in neuromodulation, and establishing them as a standard of care by increasing clinician
+Added: adoption and utilization.
Our Field Clinical Engineers have substantial experience training clinicians on the use of sophisticated technology and providing ongoing support for medical centers as they increase adoption of new therapies.
−Removed: We do not currently sell our product in markets outside the United States.
Our Therapy Consultants are responsible for developing territory business plans, targeting and onboarding new accounts, and increasing adoption of our RNS System within accounts.
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Through webinars, clinical briefs, and scientific conferences, we keep our clinician customers informed about the rapidly growing body of peer-reviewed publications and scientific research involving our RNS System.
+Added: We also engage in direct-to-patient marketing activities including targeted online advertising and social media to increase awareness about the benefits of our RNS System among potential patients and their caregivers.
+Added: Collaborations and Partnerships
+Added: DIXI Medical Distribution Agreement
+Added: In August 2022, we entered into an exclusive distribution agreement, or the Distribution Agreement, with DIXI Medical, pursuant to which we became the exclusive U.S.
+Added: distributor of DIXI Medical’s stereo electroencephalography, or Stereo EEG, product line beginning in October 2022.
+Added: These products are used in the epilepsy monitoring units, or EMUs, of Level 4 CECs to determine where epileptic seizures originate.
+Added: In addition to providing us with an incremental revenue stream, the DIXI Medical partnership provides us with improved visibility of patients moving through the EMUs, many of whom may be candidates for our RNS System.
+Added: This synergistic partnership leverages our field organization that is already calling on the same customers and supports our objective to engage earlier in the diagnostic and therapy selection process.
+Added: The Distribution Agreement has an initial term of three years, which expires September 30, 2025.
+Added: The Distribution Agreement automatically renews for additional one-year terms, unless either party provides written notice to the other party of its intention to not renew at least 180 days prior to the expiration of the then-current term.
+Added: The current Distribution Agreement will automatically renew unless either party provides notice of intent not to renew by April 3, 2025.
+Added: Rapport Agreement
+Added: In November 2023, we entered into a collaboration agreement with Rapport Therapeutics, Inc., or Rapport, a clinical-stage biotechnology company, to leverage our data as well as our RNS System’s unique biomarker monitoring and data analysis capabilities.
+Added: The collaboration evaluates biomarker changes in currently implanted RNS System patients that enroll in Rapport’s Phase 2a clinical trial of its product candidate.
+Added: Pursuant to this agreement, we provide information to Rapport that will help evaluate the impact of their product candidate on certain biomarkers of patients with focal onset seizures.
Research and Development
We focus our research and development efforts on advancing the treatment of patients living with disabling neurological disorders.
−Removed: These efforts are enhanced by the strong relationships that we have developed with
−Removed: epileptologists and neurosurgeons, as well as other neuroscientists and experts, through our clinical and commercial activities.
+Added: These efforts are enhanced by the strong relationships that we have developed with epileptologists and neurosurgeons, as well as other neuroscientists and experts, through our clinical and commercial activities.
We believe our brain-responsive RNS System is a platform that can drive a better standard of care for patients living with drug-resistant epilepsy and can also offer a more personalized solution and improved outcomes to the large population of patients living with other brain disorders.
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In addition, our clinical organization has expertise as well as extensive experience in clinical trial design and management, data collection, data management, and clinical data analysis.
−Removed: Our clinical team has conducted three prospective clinical studies on our RNS System and completed enrollment in a fourth, prospective Post-Approval Study.
+Added: Our clinical team has conducted three prospective clinical studies on our RNS System and completed enrollment in a fourth, prospective Post-Approval Study, in addition to the ongoing NAUTILUS and RESPONSE studies.
We believe the strength and strategic vision of our research and development team, combined with our clinical and regulatory expertise, will continue to drive our leadership position in the emerging category of brain-responsive neuromodulation.
−Removed: Our near-term research and development efforts are focused on continuing to improve therapy effectiveness, enhancing the patient and provider experience, and expanding the population of patients that can be treated with our RNS System.
+Added: Our near-term research and development efforts are focused on continuing to improve therapy effectiveness, enhancing the patient and provider experience through increased ease of use and efficiency, and expanding the population of patients that can be treated with our RNS System.
Our research and development activities have resulted in significant new releases of components of the RNS System that advanced these goals.
−Removed: Our near-term development pipeline includes enhancements that leverage our extensive database of iEEG data and our advanced data analysis, machine learning and artificial intelligence capabilities, which provide clinicians with additional information that they can use to enhance their clinical assessment and establish appropriate program settings for each patient.
−Removed: We believe our unique data, as well as our data analysis, machine learning, and artificial intelligence capabilities, provide a window into the brain and may be useful to other third parties doing work in or treating patients with epilepsy.
+Added: Our near-term development pipeline includes enhancements that leverage our extensive database of iEEG data and our advanced data analysis, machine learning and AI capabilities, which provide clinicians with additional information that they can use to enhance their clinical assessment and establish appropriate program settings for each patient.
+Added: We believe our unique data, as well as our data analysis, machine learning, and AI capabilities, provide a window into the brain and may be useful to other third parties doing work in or treating patients with epilepsy.
In addition to our near-term efforts, we continue to focus on developing our next-generation neurostimulator and developing new features such as streamlined, remote programming capabilities.
+Added: We recently announced that in 2025 we plan to release an AI-powered electrographic seizure classifier tool as a part of the PDMS component of the RNS System.
+Added: With this tool, we anticipate bringing greater efficiency in physician identification of electrographic seizures in patients.
We also maintain and will continue to build an intellectual property portfolio covering brain-responsive neuromodulation and AI assessment of brain data.
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Patent Portfolio
+Added: Our patent portfolio growth is primarily driven by AI and machine learning methods that may encompass future product features, as well as product hardware design advancements.
Our patents and patent applications assert claims generally related to devices, methods and systems.
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Patent and Trademark Office, or the USPTO.
−Removed: Our patents have claims that cover our current RNS System or related products, such as the system itself and methods of using it, as well as the brain leads, lead connector, neurostimulator tray or ferrule, and elements used in the manufacture of the same.
−Removed: Additionally, we have pending applications with claims directed to:
−Removed: detecting anomalous brain activity and the source thereof;
−Removed: modulating brain activity - such as with electrical stimulation - to treat disorders and diseases of the nervous system;
+Added: Our patents have claims that cover our current RNS System or related products, such as the system itself and methods of using it, including detection and stimulation methods, as well as the brain leads, lead connector, neurostimulator tray or ferrule, and elements used in the manufacture of the same.
+Added: Additionally, we have patents with claims directed to:
efficient communication or data transfer between implantable and external components of a neuromodulation system;
−Removed: the use of data to optimize therapy outcomes, such as by using artificial intelligence and deep learning techniques;
−Removed: and various combinations thereof.
+Added: and the use of data to optimize detection parameters and therapy outcomes, such as by using AI and machine learning and deep learning techniques.
+Added: Our pending patent applications cover claims describing neural network models used to develop predictive analytical methods based on various biomarkers and the use of machine learning to develop methods for identifying, assessing, and treating various aspects of the epilepsy disease state.
We continue to evaluate our intellectual property portfolio as patents reach end of life to determine the optimal course for continuing to protect our technology.
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Patent Strategy
−Removed: Our patent strategy is to seek patent protection for our inventions and to preserve our options to file additional applications pursuing claims covering specific commercial embodiments of the inventions, assuming these are strategically valuable.
+Added: Our patent strategy is to seek patent protection for our inventions and to preserve our options to file additional, continuation applications pursuing claims covering specific commercial embodiments of the inventions, assuming these are strategically valuable.
We also file patent applications covering innovations and developments to prevent third parties from developing competing products.
−Removed: Additionally, where appropriate, we file patent applications covering inventions related to new technologies or novel applications of our products and processes in areas beyond the scope of where we are focusing our resources in the near term, in order to preserve optionality as our business grows and to prevent third parties from expanding their reach.
−Removed: From time to time, we may also in-license or out-license patents in accordance with our patent strategy.
For all patent applications, we determine claiming strategy on a case-by-case basis.
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Manufacturing and Supply
−Removed: We currently manufacture our RNS System at and distribute all of the components of our RNS System from our approximately 53,000 square foot facility in Mountain View, California.
+Added: We currently manufacture our RNS System at and distribute all of our products from our approximately 53,000 square foot facility in Mountain View, California.
This facility provides approximately 20,000 square feet of space for our production and distribution operations, including manufacturing, quality control and storage.
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We are also subject to applicable state and local regulations relating to the environment, waste management and health and safety matters, including measures relating to the release, use, storage, treatment, transportation, discharge, disposal, sale, labeling, collection, recycling, treatment and remediation of hazardous substances.
−Removed: Our failure, or the failure of our suppliers, to maintain acceptable quality requirements could result in substantial fines, the shutdown of our manufacturing operations or the recall of our components of our RNS System, which would harm our business.
+Added: Our failure, or the failure of our suppliers, to maintain acceptable quality requirements could result in substantial fines, the shutdown of our manufacturing operations or the recall of components of our RNS System, which would harm our business.
In the event that one of our suppliers fails to maintain acceptable quality requirements, we may have to find and qualify a new supplier and could experience a material adverse effect to our manufacturing operations and result in manufacturing delays.
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The FDA conducted a PMA pre-approval inspection of our manufacturing facility in Mountain View, California prior to our PMA approval, as well as an establishment inspection in September 2014 which resulted in no 483 observations.
−Removed: We were accepted into the FDA Voluntary Improvement Program in 2018 and we are in our sixth year of participation in the program.
+Added: We were accepted into the FDA Voluntary Improvement Program in 2018, and we are in our seventh year of participation in the program.
The FDA Voluntary Improvement Program is part of the FDA’s Case for Quality Program.
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Other federal healthcare fraud-related laws also provide criminal liability for violations.
−Removed: The Criminal Healthcare Fraud statute (18 U.S.C.
−Removed: § 1347) prohibits knowingly and willfully executing a scheme to defraud any healthcare benefit program, including payors.
+Added: The Health Insurance Portability and Accountability Act, or HIPAA (18 U.S.C.
+Added: § 1347), also created additional federal criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
+Added: Similar to the federal Anti-
+Added: Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
Federal criminal law at 18 U.S.C.
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These laws can apply to entities that provide information on coverage, coding, and reimbursement of their products and assistance with obtaining reimbursement to persons who bill payors.
−Removed: When an entity is determined to have violated the federal civil False Claims Act, the government may impose civil fines and, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs.
+Added: When an entity is determined to have violated the federal civil False Claims Act, the government may impose civil fines, award treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs.
In addition, various states have enacted false claim laws analogous to the federal False Claims Act.
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In addition, many states, including California, also have state anti-“self-referral” and other laws that are not limited to Medicare and Medicaid referrals, with which we must comply.
−Removed: The Health Insurance Portability and Accountability Act, or HIPAA, also created additional federal criminal statutes that prohibit among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
−Removed: Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
The Federal Physician Payments Sunshine Act under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively referred to as the Affordable Care Act, which require certain applicable manufacturers of devices, drugs, biologics, kits that required FDA approval or clearance, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, or CHIP, to report annually to the Centers for Medicare & Medicaid Services, or CMS, information related to payments and other transfers of value to physicians, defined to include doctors, dentists, optometrists, podiatrists and chiropractors, and teaching hospitals, other healthcare professionals (such as physician assistants and nurse practitioners), and applicable manufacturers and group purchasing organizations, and to report annually ownership and investment interests held by physicians and their immediate family members.
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Failure to submit required information may result in civil monetary penalties, which can be increased for “knowing failures”, for all payments, transfers of value or ownership or investment interests that are not timely, accurately, and completely reported in an annual submission, and may result in liability under other federal laws or regulations.
−Removed: Numerous states have enacted laws prohibiting business corporations, such as us, from practicing medicine and other professions and employing or engaging physicians and other professionals to practice medicine, generally referred to as the prohibition against the corporate practice of medicine.
+Added: Numerous states have enacted laws prohibiting business corporations, such as us, from practicing medicine and other professions and employing or engaging physicians and other professionals to practice medicine, generally
+Added: referred to as the prohibition against the corporate practice of medicine.
These laws are designed to prevent interference in the medical decision-making process by anyone who is not a licensed professional.
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Medicare is a federal program administered by CMS through fiscal intermediaries, Medicare Administrative Contractors and carriers.
−Removed: Available to individuals age 65 or over, and certain other individuals, the Medicare program provides, among other things, healthcare benefits that cover, within prescribed limits, the major costs of most medically necessary care for such individuals, subject to certain deductibles and copayments.
+Added: Available to individuals aged 65 or over, and certain other individuals, the Medicare program provides, among other things, healthcare benefits that cover, within prescribed limits, the major costs of most medically necessary care for such individuals, subject to certain deductibles and copayments.
CMS has established guidelines for the coverage and reimbursement of certain products and procedures by Medicare.
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Changes in healthcare policy could increase our costs and subject us to additional regulatory requirements that may interrupt commercialization of our RNS System and future products.
−Removed: Changes in healthcare policy could increase our costs, decrease our revenue and impact sales of and reimbursement for our RNS System and future products.
+Added: Changes in healthcare policy could increase our costs, decrease our revenue and impact sales of and reimbursement for our RNS System and future
The Affordable Care Act substantially changes the way healthcare is financed by both governmental and private insurers, and significantly impacts our industry.
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The Further Consolidated Appropriations Act, signed into law on December 20, 2019, has repealed the medical device excise tax and as a result of the repeal and the prior moratorium, sales of taxable medical devices after December 31, 2015, are not subject to the tax.
−Removed: The Affordable Care Act also provided incentives to programs that increase the federal government’s comparative effectiveness research, and implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models.
+Added: The Affordable Care Act also provided incentives to programs that increase the federal government’s comparative effectiveness research, and it implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models.
Additionally, the Affordable Care Act has expanded eligibility criteria for Medicaid programs and created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
We continue to evaluate the full impact that the Affordable Care Act will have on our business.
−Removed: The Biden Administration and the U.S.
−Removed: Congress may take further action regarding the Affordable Care Act, including, but not limited to, amendment and expansion.
−Removed: During its history, there have been judicial, executive and Congressional challenges to certain aspects of the Affordable Care Act, such as enactment of the Tax Cuts and Jobs Acts, which, among other things, removed penalties for not complying with the individual mandate to carry health insurance, known as the individual mandate.
−Removed: On June 17, 2021 the U.S.
−Removed: Supreme Court dismissed a challenge on procedural grounds that argued the Affordable Care Act is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.
−Removed: In addition, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022, or IRA, into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care Act marketplaces through plan year 2025.
+Added: During its history, there have been amendments to and judicial, executive and Congressional challenges to certain aspects of the Affordable Care Act.
+Added: For example, on August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care Act marketplaces through plan year 2025.
The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program.
It is possible that the Affordable Care Act will be subject to judicial or Congressional challenges in the future.
−Removed: It is unclear how any such challenges and the healthcare reform measures of the Biden administration will impact the Affordable Care Act.
+Added: It is unclear how any such challenges and the healthcare reform measures of the current administration will impact the Affordable Care Act.
In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.
For example, the Budget Control Act of 2011, among other things, included reductions to CMS payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2032 unless additional Congressional action is taken.
−Removed: Additionally, the American Taxpayer Relief Act of 2012, among other things, reduced CMS payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
−Removed: On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, was enacted in response to COVID-19 pandemic.
−Removed: The CARES Act made various tax law changes, including among other things (i)
−Removed: increased the limitation under IRC Section 163(j) for 2019 and 2020 to permit additional expensing of interest (ii) enacted technical corrections so that qualified improvement property can be immediately expensed under IRC Section 168(k) and net operating losses arising in tax years beginning in 2017 and ending in 2018 can be carried back two years and carried forward twenty years without a taxable income limitation as opposed to carried forward indefinitely, and (iii) made modifications to the federal net operating loss rules including permitting federal net operating losses incurred in 2018, 2019, and 2020 to be carried back to the five preceding taxable years.
−Removed: The provisions of the CARES Act were not materially impactful on our tax positions.
The American Rescue Plan Act of 2021 was signed into law on March 11, 2021, expanding the definition of covered employees as defined under IRC Section 162(m).
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We believe that there will continue to be proposals by legislators at both the federal and state levels, regulators and third-party payors to reduce costs while expanding individual healthcare benefits.
−Removed: We are not sure whether additional legislative changes will be enacted, or whether the current regulations, guidance or interpretations will be changed by the Biden administration or what the impact of such changes on our business, if any, may be.
+Added: We are not sure whether additional legislative changes will be enacted, or whether the current regulations, guidance or interpretations will be changed by the current administration or what the impact of such changes on our business, if any, may be.
Certain of these changes could impose additional limitations on the rates we will be able to charge for our RNS System and future products or the amounts of reimbursement available for our RNS System and future products from governmental agencies or third-party payors.
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If we or our operations are found to be in violation of HIPAA, HITECH or their implementing regulations, and similar state laws, we may be subject to significant penalties, including civil, criminal and administrative penalties, fines, imprisonment and exclusion from participation in federal or state healthcare programs, and the curtailment or restructuring of our operations.
−Removed: We are also subject to numerous other federal, state, local, and foreign laws, rules, regulations and standards related to data privacy, security and protection, including consumer protection laws and regulations that govern the collection, dissemination, use, access to, confidentiality and security of patient health and other personal information.
−Removed: Such obligations may include, without limitation, the Federal Trade Commission Act, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020, or CPRA, and collectively CCPA, the Canadian Personal Information Protection and Electronic Documents Act, and Canada’s Anti-Spam Legislation.
+Added: We are also subject to numerous other federal, state, local, and foreign laws, rules, regulations and standards related to data privacy, security and protection, including consumer protection laws and regulations that govern the collection, dissemination, use, access to, confidentiality and security of patient health and other personal information, such as the Federal Trade Commission Act and the California Consumer Privacy Act of 2018, as amended.
In addition, Congress and various other states have enacted or are considering new laws and regulations regarding the privacy and security of heath and other personal information to which we may become subject.
Further, all 50 states have passed laws regulating the actions that a business must take if it experiences a data breach, such as prompt disclosure to affected individuals.
−Removed: In addition to data breach notification laws, some states have
−Removed: enacted statutes and rules requiring businesses to reasonably protect certain types of personal information they hold or to otherwise comply with certain specified data security requirements for personal information.
+Added: In addition to data breach notification laws, some states have enacted statutes and rules requiring businesses to reasonably protect certain types of personal information they hold or to otherwise comply with certain specified data security requirements for personal information.
In addition, as noted above, we are planning for regulatory clearances in non-U.S.
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For example, the collection, use, disclosure, transfer, or other processing of personal information regarding individuals in the EU, including personal health data, is subject to the European Union General Data Protection Regulation (EU) 2016/679, or EU GDPR.
−Removed: The EU GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal information, including requirements relating to processing health and other sensitive information, obtaining consent of the individuals to whom the personal information relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors.
−Removed: The EU GDPR increases obligations with respect to clinical trials conducted in the European Economic Area, or EEA, by expanding the definition of personal information to include coded data and requiring changes to informed consent practices and more detailed notices for clinical trial subjects and investigators.
−Removed: In addition, the EU GDPR also imposes strict rules on the transfer of personal information to countries outside the EU, including the United States, and, as a result, increases the scrutiny that such rules should apply to transfers of personal information from clinical trial sites located in the EEA to the U.S.
−Removed: The EU GDPR also permits data protection authorities to require destruction of improperly gathered or used personal information and/or impose substantial fines for violations of the EU GDPR, which can be up to four percent of global revenues or 20 million Euros, whichever is greater, and confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the EU GDPR.
−Removed: In addition, the EU GDPR provides that EU member states may make their own further laws and regulations limiting the processing of personal information, including genetic, biometric, or health data.
−Removed: For more information regarding the risks related to data privacy and security, please see “Risk Factors—Our collection, use, storage, disclosure, transfer and other processing of sensitive, and personal information subject us to stringent and evolving U.S.
−Removed: and foreign laws, regulations and rules, contractual obligations, industry standards, policies and other obligations related to data privacy and security.
−Removed: Our actual or perceived failure to comply with such obligations could lead to significant costs, liabilities and other risks, including as a result of investigations, inquiries, litigation, fines, legislative and regulatory action and negative press about our data privacy and data protection practices, which may disrupt our business operations and harm our business, financial conditions, results of operations and prospects and cause other adverse business consequences.”
+Added: For more information regarding the risks related to data privacy and security, please see “Risk Factors—Risks related to privacy, information technology and cybersecurity.”
Human Capital Resources
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By focusing on individual performance, as well as teamwork and collaboration, we believe that we foster an environment that helps employees excel as individuals and as team members.
−Removed: Seventy-seven employees, or 45% of our workforce, have been at NeuroPace for at least five years.
+Added: Eighty-three employees, or 45% of our workforce, have been at NeuroPace for at least five years.
To further engage and incentivize our workforce, we offer a wide range of programs and avenues for support, motivation, and professional development.
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We offer a comprehensive benefits package including:
−Removed: 401(k) plan, medical, dental, and vision insurance, life and long-term disability insurance, health care and child care spending accounts, Section 529 college savings plan, three weeks paid vacation for most employees at start, 12 paid holidays, and PTO for sick time and family emergencies.
−Removed: Other benefits include:
−Removed: health club and health class memberships, patent awards program, anniversary awards, casual dress – everyday, company picnics, parties and barbecues, fully stocked kitchen, and more.
+Added: 401(k) plan, medical, dental, and vision insurance, life and long-term disability insurance, health care and childcare spending accounts, Section 529 college savings plan, three weeks paid vacation for most employees at start, 12 paid holidays, and PTO for sick time and family
+Added: Other benefits include hybrid work schedules, online wellness program, patent awards, company picnics, parties and barbecues, and more.
Corporate and Available Information
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.