October 2020 Wells Fargo Securities, LLC (Wells Fargo) provided an update to the ongoing patent litigation between Nevro Corp. and Boston Scientific Corporation indicating the potential for a speedy resolution.
The litigation revolves around several of Nevro’s patents related to its high-frequency spinal cord stimulation system. Its focus is on Boston Scientific’s U.S. manufacturing efforts. Boston Scientific does not currently provide a high-frequency spinal cord stimulation system in the United States.
In its research, Wells Fargo stated that its patent consultant believes “that Nevro’s patents are valid.” This optimism and recent court rulings in Nevro’s favor may prove significant in the future.
Wells Fargo’s patent consultant suggested that the court might be motivated to decide the case on summary judgment allowing for a speedy resolution. It was pointed out that many of the issues in the matter have already been addressed by the Federal Circuit. Additionally, the consultant highlighted that the COVID-19 pandemic has created a backlog that the courts are eager to clear. Summary judgment rulings and other pressures on the parties help courts encourage parties to settle and clear dockets. At present, a hearing is scheduled for January 2021.
Wells Fargo research analysts seem to have confidence in Nevro. In its equity research, it indicated that it believes Nevro’s stock should perform better in the future. This is because Nevro has new management and it believes that the spinal cord stimulation market “remains a healthy and underpenetrated market.” Furthermore, Wells Fargo believes that Nevro “has a strong and under-appreciated pipeline.”
Wells Fargo research analysts identified several risks for Nevro including its patent litigation. Other potential risks include “market related issues, new competition, [and] slower than expected market growth.”
Growth does appear to be in Nevro’s future with plans to expand its manufacturing to Costa Rica. For OTW’s coverage of this expansion see “Nevro Expands Spine Cord Stim Mfg to Costa Rica.”
