Nevro announced the following corporate changes today:
- D. Keith Grossman has been hired as the company's new President and CEO, effective immediately. He has previously held executive roles at other medical device companies called Thoratec Corporation and Conceptus, both of which were ultimately acquired. He succeeds former CEO Rami Elghandour, who was hired in 2012 and no longer has any role at the company.
- Two new independent directors have been appointed: Elizabeth Weatherman, who is a limited partner at the private equity firm Warburg Pincus, and Kevin O'Boyle, a medical device executive with 20 years of experience.
- Ali Behbahani has resigned as a member of the Board.
- Nevro is suspending its revenue guidance for the year in light of the management change.
A lot of these changes were made under the guidance of Broadfin Capital, which is a global equity healthcare manager that holds a significant amount of Nevro stock.
Check out the latest earnings call transcript for Nevro.
Here's the commentary that Michael DeMane, Nevro's Chairman of the Board, shared with investors regarding the management change:
On behalf of the Board and our entire company, I am excited to welcome Keith Grossman to the Nevro team. Keith brings over 30 years of experience in leading innovative medical technology companies through periods of strategic change to deliver growth and enhanced value for stockholders. As we look to the future, I am confident that under Keith's direction, Nevro will be well-positioned to capture a burgeoning market opportunity with its pioneering spinal cord stimulation (SCS) technology to treat chronic pain.
Keith Grossman appears to have a successful track record of value creation behind him, so it's understandable why traders are cheering today.
Nevro has come up short of analyst estimates on its last four earnings reports, so it's understandable why the Board felt that change was necessary.
Will the new CEO be able to turbocharge the company's growth rate and create shareholder value? Only time will tell. Since leadership changes can be difficult on employees and customers, I think that caution is warranted.