Last year was a tough one for Glucose Monitoring Device specialist Echo Therapeutics, Inc. as it endured boardroom trouble and also had to lay off a third of its workforce. Now its newly released financials tell more of the story with no meaningful revenue stream yet and an operating loss for the year ended December 31, 2013 of $19.6 million compared to $15.0 million for the equivalent period a year ago. Quarterly figures show some impact from reduced costs following restructuring however, and there’s new money in the business too.
Echo Therapeutics’ Symphony CGM System is a non-invasive, wireless, continuous glucose monitoring system for use initially in the critical care setting. The company has its eyes on a bigger prize though, with the potential for its system to be used in the hospital beyond the critical care setting, as well as in patients with diabetes in the outpatient setting.
And indeed it looks as though the technology has promise, having successfully completed a multi-center clinical trial in post-surgical patients in hospital critical care units and seen study results presented at the International Symposium on Intensive Care and Emergency Medicine (ISICEM) in Brussels in March 2014. Furthermore the company used data from the study to support its CE Mark application to potentially obtain marketing approval for the Symphony CGM System in Europe.
Then there was the announcement late last year that the company had entered into a strategic collaboration agreement with Medical Technologies Innovation Asia (MTIA), Ltd., Hong Kong, for a license arrangement and equity investment in Echo in December 2013. MTIA now has the right to develop, manufacture, market and distribute Echo’s Symphony CGM System on an exclusive basis for the Chinese market, including the Peoples’ Republic of China, Hong Kong, Macau and Taiwan.
2013 was a difficult year for the company however, as it endured shareholder unrest, boardroom changes and a restructuring plan which reduced its workforce by 33%. Echo says its cost reduction measures did not diminish its ability to execute on its short-term objectives, but they did see quarterly cash usage decrease by approximately 39% from the average quarterly cash usage experienced during the first three quarters of 2013.
So to the most recent quarterly highlights, which one might expect provides the most up to date finger on the pulse of the company’s progress. Echo’s net loss for the fourth quarter of 2013 was $3.9 million, or ($0.36) per share, compared to $1.9 million, or ($0.48) per share, for the fourth quarter of 2012. The cost-saving measures saw it’s operating loss for the fourth quarter of 2013 reduce to $3.1 million compared to $4.7 million for the equivalent period a year earlier. The biggest saving was in research and development, where expenses were reduced to $1.3 million for the quarter compared to $2.9 million a year earlier. Selling, general and administrative expenses were little changed at $1.8 million for the fourth quarter of 2013 compared to $1.7 million for the fourth quarter of 2012.
“We made tangible progress during 2013 and we achieved some important milestones, including the clinical validation of the Symphony CGM System,” said Robert F. Doman, Echo’s Executive Chairman and Interim CEO. “With our experienced management team, along with the cash infusion associated with the MTIA agreement, we can now focus on the continued, accelerated pace of Symphony’s development finalization necessary for the European market launch and the FDA regulatory trial.”
Source: Echo Therapeutics, Inc., PR Newswire