Thank you all for being here. My name is Samantha, and I'm on the med tech team here at Piper Sandler. It's my pleasure to introduce the CEO of NeuroPace, Joel Becker, for our next presentation.
Samantha, and thank you to Piper Sandler for the opportunity to be here today. Thanks for everybody for attending. Some familiar faces, some new ones as well. Looking forward to the chance to tell you about NeuroPace. Our standard disclaimer slide here. For those of you who aren't aware, but maybe even for those of you who are, the bedrock, everything we do at NeuroPace is around the mission of this business, and the mission is to transform the lives of patients suffering with epilepsy by reducing or eliminating those debilitating seizures. So I'm four months in. One of the things I can tell you is that this really is foundational to the business, and what animates our activities and our decision-making every day is the, the important work that we can do with our customers to help transform the lives of, of these patients.
A quick overview. When you think about NeuroPace, here are some of the demographics of the, of the business, starting with a large underpenetrated market. Our core market in terms of our core Level 4 centers has always been traditionally focused there, is about a $2 billion market within those comprehensive epilepsy centers. Beyond that, if we think about the number of patients that are out there that have drug-refractory epilepsy, it's a significantly bigger addressable market, as well, in excess of $55 billion. And we address that large market with a really unique and differentiated technology. It is the first and only closed-loop brain responsive neuromodulation system. I'll tell you a little bit more about why that matters as we go through it here.
But that unique technology has resulted in some very compelling clinical data, and the data over time has continued to improve as well. And so we'll spend a little time talking about the rubber meeting the road, as it were, in terms of clinical data. As you might imagine, we're very focused as a team. Some of my team members are here with me today on operating execution around the business. We've got a big opportunity and a unique technology with great data, and we're really focused on executing around that, both in terms of top-line growth as well as doing so responsibly with good operating discipline and managing our cash burn along the way. We've got a healthy balance sheet. We've got sufficient capital to continue to execute on our key priorities here. We say through at least mid-2025.
What we said in our most recent call was that we've got cash to fund our planned operating activities into 2026. And in addition to all that, we've got a bunch of really exciting opportunities in front of us, two of which specifically I will talk to in terms of expansion of our customer footprint through a recent PMA supplement approval that we got earlier this year. As well as then an expansion in our indicated patient population, which we're currently working on a study for right now called our Nautilus Study. So two key planks in our growth strategy that will meaningfully expand our current core market into this missing million of drug-refractory epilepsy patients that are out there.
So here you see some of the faces of NeuroPace, the point here being significantly tenured and experienced team that has a lot of experience and a lot of significant med tech companies. I myself, 25+ years in the med tech industry, including a significant chunk of it at a company by the name of St. Jude Medical in a variety of different leadership roles there. But just an excellent team. And the team is focused on, as I mentioned, the mission of addressing what is the fourth most common neurological disorder in the United States, and that's epilepsy.
Significant costs associated with epilepsy, the direct medical costs of $28 billion, the significant costs that epilepsy takes on the toll of patients' lives, represented by things like a two to three times higher unemployment rate and a number of other quality of life impacts that epilepsy has in these patients as well. And as I mentioned, about a third of patients, about a third of the population is drug-resistant. So patients go into medical management as a first-line therapy. Different anti-seizure medications are tried. They may work, they may work for a period of time, and some patients, they don't work, and about a third of that population ends up as drug-refractory.
What's unique fundamentally about the RNS System, which is NeuroPace's technology platform, what's unique about the RNS System is it has the ability to monitor, recognize, and respond to different patient-specific seizure patterns and then record that data for downloading and ongoing review by clinicians. Why that matters is it allows us to tailor the therapy for patients so that we can monitor the brain activity. When we sense the oncoming seizure activity, we can then respond and treat the patient with the programming parameters that have been determined to be most appropriate for that patient, and then record what happened when we treated that patient. That allows for the system and for clinicians to learn and tailor the therapy individually for patients.
Traditionally, stimulation devices may be more of a duty cycle approach, where we put the lead in a certain spot, we think the lead's in the right spot, and for a certain amount of time, the device stimulates, and then the device is off, and then the device stimulates, and the device is off. What we see is our ability to tailor therapy results in minutes of delivered therapy per day when it's needed to treat the epileptic seizure activity, versus hours a day with that you would expect from or, or that you would get from a duty cycle therapy. The way that then shows up in the data is both through the efficacy that we get with being able to tailor the therapy for individual patients and much lower complication rates or adverse event rates.
Because, as you might imagine, hours of stimulating someone's brain when they don't need it can cause adverse consequences, and we don't see that with the RNS platform as a result of being able to monitor, recognize, and respond, and then record as well. As I mentioned, so here's the data. This is the data from our randomized clinical trial out through year nine. 75% median percentage reduction in seizures. And as you would note, data improving over time. So in addition to high success rates, we've seen the data improve over time. And encouragingly, we've also seen that improve in our real-world registry data. So the light blue bars here on the left are the real-world data that we've seen. And a couple of things I'd point out here.
One, that 82% seizure median seizure reduction rate at three years, the improving even then again in the registry data, and the fact that we start out in year one, you can see we've learned a lot along the way here with RNS therapy as well. So how to treat, the way to program, the way to manage patients on an ongoing basis. Not only does the data improve over time, it starts out at a higher point, given all we've learned over time from the randomized trial and in clinical use. So there are different treatment options that patients have available to them if they're drug-refractory. Epilepsy surgery, about 20% of patients are good candidates for resection surgery, as well as then other competitors within the neuromodulation space, in particular VNS and DBS.
Then, of course, what we're here to talk about today in RNS therapy. What we've seen is that RNS therapy allows for example the flexibility of being used. If a patient's a good candidate for RNS surgery for resection surgery, using the RNS System doesn't make them not a good candidate for resection surgery, either as a hybrid therapy or down the line as well. So it doesn't obviate the opportunity for a patient to get a resection, and it can be used well as an adjunct to surgical procedure as well.
I've mentioned earlier a number of the different aspects of VNS and DBS, including a fixed anatomical target, not responsive to the brain activity is a little bit of that, what I talked about in the duty cycle of patients being either on or off stim and not targeted toward that when that patient needs individual therapy as well, and don't have the ability to record or analyze the data in the same way that we do with RNS. I've talked about this as well, but here's that 1.2 million patients that are living with drug-resistant epilepsy. Our traditional patient population has been the 50,000 patients that are being managed in those Level 4 centers on an annual basis, okay? We're indicated for focal epilepsy, which is 60% of the population.
So of that 50,000, we're indicated for 30,000 traditionally. What that then results in is that $2 billion core addressable market that we have traditionally been a part of, and the $1.4 billion of that being focal versus generalized. When we think about then the treatment gap that exists between RNS therapy potential and the 30,000 patients we're indicated for today versus the 1.2 million patients that are drug-resistant, that really forms the market basis for our strategy. And our strategy is one for the RNS System, which is really in three parts. First, expanding adoption as well as utilization inside that 150 to 200 core comprehensive epilepsy centers, driving adoption and utilization of the technology within those traditional customers. Two, increasing the availability of the therapy.
That PMA supplement that I mentioned recently allows us to expand outside of that group of 200 centers and about 1,200 epileptologists out into the community setting, and an additional 1,800 epileptologists, as well as the rest of the functional neurosurgery community. So we're broadening our customer footprint. And then thirdly, expanding patient eligibility through the Nautilus trial into the generalized population. There are a number of different ways that we're working to expand utilization, including expanding the types and the ways patients are treated within the Level 4 centers, and then expanding, as I mentioned, from the Level 4 centers into the Level 3 centers. We talked about this for the first time on our Q2 call.
On our Q3 call, we announced that, even though we're still just here, we've only not too long ago gotten the PMA supplement expansion, and we're just in the planning stages for how we're gonna enter into the community. We've had some particularly enthusiastic centers who've moved faster than others through the contracting and value analysis process. And while we're planning for initiation of the pilot in the first half of 2024, here in the third quarter, we did have centers have their first implants in the community setting. So that was great to see. Patients are doing great, and fun to see that enthusiasm kinda show up as some eager folks getting out there and getting started out in the community as well.
So we're really excited about what we can do out in the community. Importantly, for a couple of reasons. The three strategies is expanding utilization in Level 4 centers, expanding into the community, and expanding indications. Our three individual strategies, they also work together. When we expand into the community, not only are there patients who can be treated well out in the community, they don't need Phase II testing, they only need Phase I testing. We've also found that it uncovers patients who are more complex, that then can be referred back into the Level 4 centers, so it's additive. Similarly, what we find then is, as we've prosecuted the generalized epilepsy strategy, those patients as well don't need Level 2 testing, they only need Level 1 testing.
The work that we're doing now out in the community to establish our presence in those practices, is going to well position us for pending successful completion of the trial, which we're on track to complete enrollment in Q1 of 2024. Is gonna position us well to be able to take advantage of the general epilepsy population through the track we've already laid, or the infrastructure, as it were, that we've put down out in the community setting as well. So here you can just see, these are the three planks that build us from 30,000 patients, is the business that we've had, to the 1.2 million patients, that is the market that we're moving toward. It's real. The community expansion is the point, the PMA supplement is approved, and the planning is underway.
We're fixing to complete our enrollment here in Q1 of 2024 in the Nautilus trial, and so we're on our way with substantial programs to execute that strategy. I'll wrap up here with just showing you a fourth part of our strategy is the distribution of DIXI stereo EEG leads. That also allows us to both move up in the stream of diagnostic evaluation of patients, as well as another revenue stream for the business. So, that's all turned out in the following revenue performance here in Q3, $16.4 million in revenue. We raised guidance to a midpoint of in between $62.5 and $63, $63.5, gross margin expansion, and some good leverage on our operating expenses.
So we think we're well positioned both today to execute as well as into the future. And thanks for taking the time to listen. Thank you. I think we are slightly over time officially, but I'll obviously hang around and if anybody's got any questions or wants to discuss any, I would be happy to. Thank you. Mm-hmm. In terms of, valuation placed on that data?
I mean.
Yeah. So I think, the diagnostic data is valuable to clinicians in a couple of different ways. One, it allows them. And we actually just introduced a product, a data management tool called the nSight System, that allows us to both pull that data, sift through it, and identify what are the most relevant parts of the data, and then have that available for when the patient shows up at the clinic, so the clinician doesn't. It's the good and the bad news, right? The good news is, I can give you a lot of data. The bad news is, I can give you a lot of data. And so it's important that we be able to be efficient and effective in sorting and in defining the important data for the clinical evaluation.
Then the historical data also informs a roadmap and guidelines for how people will make programming changes. They can look to what has worked and what has been happening with the patient as they think about, one, is a programming change needed or not? Then, two, when I moved in a particular direction or not, if I look back historically, how did the patient respond to that? I think it, it both sets context for how the patient's doing, as well as informs future direction for therapy delivery. Yeah. As you might imagine, the development of the clinical data is something that can really help us understand how do certain patient populations respond to certain types of therapy. And I think we have seen a lot of progress in that area, and I would just.
I'd point to those histograms with the clinical data. You know, we started in the randomized controlled trial, now more than nine years ago, you know, in, you know, kind of the 50% to 60% efficacy and seizure reduction. In that population, we're now up to 75%, and we have a higher jumping-off point in the current. So I think we've learned a lot in terms of how to treat patients and how to program. Thanks very much, everybody. Appreciate it.