Oklahoma Police Pension and Retirement System v. Nevro Corp. et al 3:18-cv-05181 — On August 23, 2018, investors sued Nevro Corp. (Nevro, NVRO or the Company) in United States District Court, Northern District of California. Plaintiffs in the NVRO class action allege that they acquired Nevro stock at artificially inflated prices between January 8, 2018 and July 12, 2018 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. For more information on the NVRO Lawsuit, please contact us today!

Summary of the Allegations

Company Background

The Company (NYSE:NVRO) is a self-described medical device business that has developed “an innovative, evidence-based non-pharmacologic neuromodulation platform for the treatment of chronic pain.”

Nevro has been in business since 2006.  Within two years, it engaged in “groundbreaking” research at Stanford University and “validation research” at U.C. Davis. The FDA approved Nevero’s HF10 therapy in 2015.

The Company’s claims about its HF10 therapies and related spinal cord stimulation (SCS) systems are at the crux of the August 23 complaint.

Summary of Facts

Nevro and two of its senior officers (the “Individual Defendants”) now stand accused of deceiving investors by lying and withholding critical information about the Company’s business practices and prospects during the Class Period.

Specifically, they are accused of omitting truthful information about Nevro’s acquisition and use of certain trade secrets in connection with the development of its SCS systems from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused Nevro stock to trade at artificially inflated prices during the time in question.

The truth emerged in a series of events beginning on April 27, 2018. On that day, the public learned that Boston Scientific sued Nevro for alleged patent infringement, theft of trade secrets and tortious interference with contract.

Then, on May 7, 2018, Nevro announced its first quarter results for 2018 and attributed a significant increase in operating expenses to “legal expenses associated with intellectual property litigation” with Boston Scientific.

Developments continued in early July 2018, when analysts downgraded Nevro’s stock and reported on a tentative ruling in Nevro’s ongoing litigation with Boston Scientific. The tentative ruling in that case “invalidated at least five of the patents related to Nevro’s purportedly ‘proprietary’ HF10 therapy and Senza systems.”

Finally, before the market opened on July 13, 2018, the Company announced that it had fired its vice president of worldwide sales.

A closer look…

As alleged in the August 23 complaint the Company and/or Individual Defendants repeatedly made false and misleading public statements during the Class Period.

For example, in a press release issued January 8, 2018, the Company stated in pertinent part: “Nevro has developed and commercialized the SENZA spinal cord stimulation (SCS) system, an evidence-based, non-pharmalogic neuromodulation platform for the treatment of chronic pain. The SENZA system is the only SCS system that deliver’s Nevro’s proprietary HF10 therapy.”

On a form filed with the SEC on February 22, 2018, Nevro also stated in relevant part: “We are extending our novel and proprietary technologies into a series of product enhancements with the goal of improving the treatment of chronic pain.”

Finally, during an earnings call with investors also held on February 22, one of the Individual Defendants acknowledged Nevro’s “growing sales revenue,” saying in relevant part: “These results are driven by continued adoption and demand for HF10 globally and consistent execution by our sales team.”

What the Company failed to disclose, however, was that its SCS systems were not “novel” or “proprietary” because it had used “protected confidential and proprietary trade secrets and stolen documents” to develop them. The Company also failed to divulge that this alleged conduct caused it to be “vulnerable to increased litigation expenses and adverse legal and regulatory action,” thereby making its U.S. sales growth unsustainable.

Impact of the Alleged Fraud on Nevro’s Stock Price and Market Capitalization

The following chart illustrates the stock price during the class period:

Actions You May Take

If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.

NOTE: The deadline to file for lead plaintiff in this class action is October 22, 2018. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.

In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in Nevro common stock using court approved loss calculation methods.

Recently Filed Cases

Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action.  Please contact us if you would like an LK report for any of these cases:

About Us

Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse.  With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.

Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients.  Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.

For additional information about this case or our institutional services, please contact us.