NeuroPace Reports $27.1 Million Net Loss and 22% Revenue Growth in 2024

NeuroPace Inc., a medical device company focused on epilepsy treatment, reported a net loss of $27.1 million for the year ended December 31, 2024, compared to a net loss of $33.0 million in 2023. Revenue increased by 22% to $79.9 million, driven by higher RNS System unit sales and increased sales of DIXI Medical products, which accounted for 17% of total revenue in 2024. Cost of goods sold rose by 20% to $20.8 million, resulting in a slightly improved gross margin of 73.9% compared to 73.6% in 2023. This improvement was attributed to lower fixed costs per unit due to increased production volume.

Operating expenses increased by 7% to $80.8 million, with research and development expenses rising 14% to $23.7 million and selling, general, and administrative expenses increasing 5% to $57.1 million. The increase in research and development was primarily due to higher personnel costs and product development expenses, partially offset by increased grant funding. The rise in selling, general, and administrative expenses was mainly due to increased personnel costs in sales and field support. The company's loss from operations improved from $27.2 million in 2023 to $21.7 million in 2024.

Significant developments during the year included FDA approval of a Premarket Approval Supplement (PMA-S) allowing expansion of commercial efforts to target epileptologists and neurosurgeons outside Level 4 comprehensive epilepsy centers (CECs). A pilot program to reach these clinicians was initiated in 2024. The company also received approximately $69.8 million in net proceeds from a February 2025 common stock offering, with $49.5 million used to repurchase shares held by KCK Ltd. Further, NeuroPace entered into a collaboration agreement with Rapport Therapeutics to leverage its data analysis capabilities. As of December 31, 2024, over 6,000 patients had received the RNS System.

Key operational developments included the completion of patient implantation in the NAUTILUS study for generalized epilepsy in March 2024, with data analysis expected to begin in the second quarter of 2025. The company also announced a collaboration with NEST and the FDA to utilize real-world data from the PERC for its RESPONSE study, aiming for expanded label submissions to the FDA in the second half of 2025 for both generalized and pediatric focal epilepsy indications. The company's RNS System has an average battery life of nearly 11 years. The company also terminated its at-the-market equity program in February 2025. As of December 31, 2024, NeuroPace employed 184 people.

NeuroPace anticipates continued net losses and negative cash flows for the next several years due to planned investments in research and development, clinical studies, and commercial activities. The company expects its existing cash resources to fund operations for at least the next 12 months, but acknowledges the possibility of needing additional funding through equity or debt financings. The company's outlook includes continued efforts to expand market share, broaden indications for its RNS System, and leverage its data assets. The company also notes several significant risks, including reliance on a single product, competition, regulatory hurdles, and the need for additional funding.