Full Press Release Details
NeuroMetrix, Inc. Reports Total Revenues
of $11.3 Million for the Third Quarter of 2007, a Decrease of 26% from the
Third Quarter of 2006; Net Loss of $3.6 Million Incurred in the Third Quarter
WALTHAM, Mass. (BUSINESS WIRE) October 30, 2007 NeuroMetrix, Inc.
(Nasdaq: NURO), a medical device company focused on the design, development and
sale of proprietary products used to help physicians diagnose neuropathies and
neurovascular diseases, announced today the financial results for the three
month and nine month periods ended September 30, 2007.
Total revenues for the three months ended September 30,
2007, the Company s third quarter, were $11.3 million, compared with $15.3
million for the third quarter of 2006, representing a decline of 26%. During
the three month periods ended September 30, 2007 and September 30,
2006, 89% and 86% of revenues, respectively, were derived from biosensor sales,
8% and 14% of revenues, respectively, were derived from diagnostic device sales
and 3% and 0% of revenues, respectively, were derived from DigiScope sales. The
DigiScope, a product for the detection of diabetic retinopathy licensed from
EyeTel Imaging, Inc., was launched in early 2007.
Total revenues for the nine months ended September 30,
2007 were $34.5 million, compared with $41.1 million for the nine months ended September 30,
2006, representing a decline of 16%. During the nine months ended September 30,
2007 and September 30, 2006, 88% and 86% of revenues, respectively, were
derived from biosensor sales, 10% and 14% of revenues, respectively, were
derived from diagnostic device sales and 2% and 0% of revenues, respectively,
were derived from DigiScope sales.
The gross margin percentage for the third quarter of
2007 was 73.0% of revenues, compared with 75.5% of revenues for the third
quarter of 2006. In the third quarter of 2007, the gross margin percentage for
biosensors was 73.9% of revenues, compared with 74.0% of revenues in the third
quarter of 2006, due to a change in the mix of biosensors sold. The gross
margin percentage for diagnostic devices was 77.6% of revenues for the third
quarter of 2007, compared with 84.6% of revenues for the third quarter of 2006
due to lower average selling prices and lower volumes. Overall gross margins in
the third quarter of 2007 were impacted by the gross margins on the DigiScope,
which were 25.0%. DigiScope revenues during the third quarter of 2007 were
derived from a mix of existing customer accounts we acquired from EyeTel in
connection with our licensing agreement and new customers. Under the terms of
our agreement with EyeTel, we remit a portion of DigiScope revenues to EyeTel
and the agreed upon split of revenues from existing customer accounts is less
favorable to the Company than the revenue split for new customer accounts. Effective
October 1, 2007, and consistent with the terms of our original agreement
with EyeTel, the split of revenues from existing customer accounts converted to
the same revenue split as that used for new customer accounts. We expect that
the gross margin on DigiScope revenues will continue to increase in future
The gross margin percentage for the nine months
ended September 30, 2007 was 73.3% of revenues, compared with 75.7% of
revenues for the nine months ended September 30, 2006. For the nine months
ended September 30, 2007, the gross margin percentage for biosensors was
73.7% of revenues, compared with 74.6% of revenues for the nine months ended September 30,
2006, due to a change in the mix of biosensors sold. The gross margin
percentage for diagnostic devices was 80.4% of revenues for the nine months
ended September 30, 2007, compared with 82.4% of revenues for the nine
months ended September 30, 2006 due to lower average selling prices and
lower volumes. Overall gross margins for the nine months ended September 30,
2007 were impacted by the gross margins on the DigiScope, which were 21.5%.
The net loss for the third quarter of 2007 was $3.6
million, compared with net income of $2.1 million for the third quarter of 2006,
including stock-based compensation expense of $878,000
and $635,000 for the third quarter of 2007 and 2006,
During the third quarter of 2007, we continued to
experience a significant increase in professional fees relating to the government
investigations previously disclosed by the Company and also relating to
reimbursement matters. These expenses were recorded as general and
administrative expenses. General and administrative expenses for the nine
months ended September 30, 2007 increased significantly compared with the
same period in 2006 as a result of an increase in professional fees relating to
the government investigations, partially offset by the reversal of
approximately $1.7 million in sales tax liability in the second quarter of
The net loss for the nine month period ended September 30,
2007 was $6.2 million, compared with net income of $3.2 million for the nine
months ended September 30, 2006, including stock-based compensation
expense of $2.3 million and $2.0 million for the nine months ended September 30,
2007 and 2006, respectively.
Basic and diluted net loss per share was $(0.28) for the three months ended September 30, 2007, compared with basic and diluted net income per share of $0.17 and $0.16, respectively, for the three months ended September 30, 2006.
Basic and diluted net loss per share was $(0.49) for the nine months ended September 30, 2007, compared with basic and diluted net income per share of $0.26 and $0.25, respectively, for the nine months ended September 30, 2006.
Cash and cash equivalents and short-term investments
totaled $35.5 million as of September 30, 2007, compared with $37.1
million as of June 30, 2007 and compared with $40.3 million as of December 31,
Shai N. Gozani, M.D., Ph.D., NeuroMetrix s President &
CEO commented, Our revenues in the third quarter of 2007 were down from the
same period in 2006 and were down sequentially from the second quarter of 2007
due in large part to reimbursement issues. Our business continues to be
adversely impacted by policies being implemented by both Medicare and
commercial insurance carriers. We believe that decisions by certain Medicare
carriers to place the NC-stat in a miscellaneous CPT code (95999) and decisions
by certain commercial payers to label the NC-stat as experimental and
investigational, have caused our revenues to decline as customers experience
higher levels of claims denials, longer periods of time to receive
reimbursement and an overall environment of uncertainty.
We also continued to experience a decline in
average biosensor usage per customer account during the third quarter of 2007,
likely due to the reimbursement environment. However, we continued to expand
our overall active customer count to a total of over 5,500 physician practices
and clinics as of the end of the third quarter of 2007, which is a twelve-month
look back at accounts utilizing the NC-stat System. A total of 258,000
biosensors were used by our customers during the third quarter of 2007,
representing a decrease of 7% compared with the 276,000 biosensors used by our
customers in the second quarter of 2007. We are working to ensure adequate and
fair reimbursement for medically appropriate testing with the NC-stat System,
and have assembled a team of resources internally and externally with expertise
in healthcare reimbursement to assist us in this effort. As such, we are