NeuroPace stock maintains buy rating at UBS following physician survey

UBS reiterated its buy rating and $18.00 price target on NeuroPace Inc (NASDAQ:NPCE), a medical device company with a market capitalization of $372 million and impressive revenue growth of 22% over the last twelve months. According to InvestingPro data, four analysts have recently revised their earnings estimates upward for the upcoming period. The investment firm polled 32 U.S.-based physicians who collectively treat 7,651 drug-resistant epilepsy patients to assess potential market impacts.

The survey revealed positive indicators for NeuroPace’s market outlook, with 30 out of 32 physicians expecting either no impact or an increase in the number of implants or referrals following the NAUTILUS data. Two physicians specifically anticipated a significant increase in implants or referrals, while only two referring physicians expected a slight decrease. InvestingPro analysis shows analyst targets ranging from $15 to $20, suggesting potential upside from current levels, though investors should note the stock’s notably volatile price movements.

UBS analyst Priya Sachdeva noted, "We view this survey as an overall positive for NPCE’s market outlook post-NAUTLIUS data with 30/32 physicians surveyed expecting no impact or an increase in number of implants/referrals, and notably, 2 physicians actually anticipate a significant increase."

The majority of respondents (21 out of 26) indicated that their drug-resistant generalized epilepsy patients eligible for neurostimulation therapy typically experience lower baseline seizure frequency (5 times or less per month) versus higher frequency. This finding aligns with the NAUTILUS study, where lower baseline frequency was a leading indicator of efficacy.

UBS views these results as encouraging, with Sachdeva stating the survey "reinforces our view that the annual generalized patient opportunity remains largely intact" for NeuroPace’s neurostimulation therapy in the drug-resistant epilepsy market.

In other recent news, NeuroPace Inc. has secured a $75 million credit facility with MidCap Financial, which includes a $60 million term loan and a $15 million revolving credit facility. The company plans to use these funds to expand patient access to its RNS System and invest in growth initiatives. Additionally, H.C. Wainwright initiated coverage on NeuroPace with a Buy rating and a price target of $18, citing the company’s strong revenue growth and the clinical effectiveness of the RNS system for treating drug-resistant focal epilepsy. NeuroPace’s financial performance has been robust, with full-year 2024 revenue reaching $79.9 million, a 22% increase year-over-year, and first-quarter 2025 revenue at $22.5 million, marking a 24% increase from the previous year.

Cantor Fitzgerald maintained its Overweight rating and $16 price target on NeuroPace, based on physician survey results and the NAUTILUS study’s preliminary findings. While the study did not meet its primary effectiveness endpoint, subgroup analyses indicated a significant benefit for certain patients. Cantor Fitzgerald expressed confidence in NeuroPace’s prospects for receiving FDA approval for an expanded indication of the RNS System. Despite these developments, NeuroPace shares experienced a notable decline, which some analysts suggest could present a buying opportunity.

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