Nevro Corp. NVRO
Nevro is a failed one-trick pony at 15x sales: the pivotal SENZA trial was rigged, HF10 is a phony premise, explant rates run 22-33%, and kickbacks prop up what remains of sales.
Thesis
Scorpion Capital argues Nevro (NVRO), a $5.8B single-product medical-device company, rests on a fraudulent foundation and faces existential collapse. Their 20+ physician interviews indicate that the pivotal SENZA-RCT trial behind HF10 high-frequency spinal cord stimulation was described by KOLs and ex-employees as 'essentially a fraud' run at a 'corrupt' Carolinas Pain Institute 'factory' — the same pattern as the Insys fentanyl trial. Real-world explant rates are 22% within 1-2 years and 33% within 2-3 years per a 2020 NANS paper, versus Nevro's marketed 1.2-3.7%. The Omnia stimulator launched in November 2019 is 'a colossal flop,' painful diabetic neuropathy is a 'mirage,' Saluda Medical's closed-loop device threatens 18-33% of sales in 6-12 months, and the business hinges on anti-kickback and FCPA-violating payments — including ~$10,000 per implant in Switzerland — that doom any turnaround.
SCQA
Nevro is a $5.8B one-product medical-device company whose Senza and Omnia spinal cord stimulators dominate the high-frequency SCS niche built on its HF10 technology launched in the US in 2015.
KOLs, ex-employees, and a 2020 NANS paper describe the pivotal SENZA-RCT trial as a sham, real-world explant rates at 22-33% versus Nevro's 1.2-3.7% claim, and sales sustained only by anti-kickback-violating payments to implanters.
Short NVRO and call for an FDA recall of HF10; exit before Saluda Medical's imminent launch, further explant-rate papers, and a likely DOJ/FCPA reckoning expose the fraud embedded in the study, the device, and the business model.
At 15x sales for a collapsing one-trick pony with explant rates 10-30x Nevro's claims, a failed Omnia relaunch, and a 6-12-month competitive existential threat, shares face catastrophic downside toward a Nuvectra-like crescendo.
The three reasons
- 1
SENZA-RCT pivotal trial described as 'essentially a fraud' by KOLs and ex-employees
- 2
Real-world explant rates of 22-33% vs Nevro's claimed 1.2-3.7% (10-30x gap)
- 3
Sales propped up by anti-kickback violations including ~$10K/implant in Switzerland
Primary demands
- Short NVRO equity
- FDA recall of HF10 spinal cord stimulator
- Investigation of anti-kickback and FCPA violations tied to Nevro's speaker/partnership programs
- Disclosure of true real-world explant rates
KPIs cited
Pattern membership
Precedents cited
- Insys Therapeutics (fentanyl kickbacks, executive convictions)
- Nuvectra (SCS company bankruptcy — 'fatal Nuvectra-like crescendo')
- DOJ OIG Special Fraud Alert on speaker programs (Nov 16, 2020)
Composition what's on the 239 slides
Slide gallery ·
Notes
Classic Scorpion Capital long-form short report (239 pages) with 19 thesis chapters, 35+ research interviews, and extensive use of highlighted KOL quotes. Not a short-squeeze hit piece — it's an encyclopedic fraud case covering trial integrity, device efficacy, kickbacks (domestic AKS + European FCPA), competitive threat from Saluda, and unauthorized practice of medicine by reps. Stake not quantified (Scorpion only discloses it is short); no explicit price target. Tone is heavily adversarial with litigious undercurrent (explicit AKS/FCPA/FDA-recall framing). Strong use of CEO-quote contradictions (Grossman on Omnia still running 85-90% at 10kHz). Not a sum-of-parts or peer-gap visual story; the core 'before/after' frame is Nevro's claimed 1.2-3.7% explant rate versus the NANS 22-33% real-world data.