NeuroPace Inc. (NASDAQ:NPCE) saw its stock nosedive by 36.1% today after announcing that its NAUTILUS clinical trial failed to meet its primary effectiveness target across the full patient population. The study was aimed at assessing the RNS System as a treatment for drug-resistant idiopathic generalized epilepsy (IGE).
Despite the disappointing topline efficacy results, the study did achieve its primary safety objective at 12 weeks post-implant, confirming the RNS System’s favorable safety profile. However, the market reacted negatively to the missed statistical benchmark for overall efficacy, driving the stock sharply lower.
Still, the company pointed to a silver lining: a significant clinical response in a subgroup of patients who had a lower baseline frequency of generalized tonic-clonic seizures—patients who made up the majority of trial participants. In these individuals, seizure reductions were statistically meaningful.
Beyond that, the data also revealed other encouraging trends. NeuroPace highlighted notable improvements in seizure reduction rates, a higher number of seizure-free days, and better responder rates over the first year of therapy. These gains reportedly extended into year two for those continuing with the treatment, suggesting that the RNS System may become more effective over time through individualized programming.
Dr. Martha Morrell, NeuroPace’s Chief Medical Officer, expressed optimism, stressing the sustained benefits and statistically significant outcomes in a substantial patient subgroup. CEO Joel Becker echoed this sentiment, saying the results support the company’s broader strategy and long-term plans to expand indications for the RNS System.
SVB Leerink analyst Mike Kratky described the outcome as “surprising and disappointing,” but noted that the company’s follow-up commentary helped ease some investor concerns. “While a cleaner, more clearly positive outcome would have been preferable, there are reasons to remain optimistic about NPCE’s future in drug-resistant IGE,” he commented.
The NAUTILUS trial was a rigorously designed, randomized, controlled study conducted at 23 epilepsy centers across the U.S. A total of 100 participants were enrolled, with 87 receiving implantation of the RNS Neurostimulator and Leads. NeuroPace’s RNS System was granted FDA Breakthrough Device Designation in 2021 for potential use in treating IGE.
Looking ahead, NeuroPace intends to submit the full study results to the FDA and for peer-reviewed publication. The company plans to explore regulatory options, which may include seeking approval based on overall seizure reduction trends or targeting patients with lower baseline seizure activity—a population that could represent a significant portion of those affected by IGE.