Full Press Release Details
NeuroMetrix, Inc. Reports Total Revenues of $11.5 Million for the Second Quarter of 2007, a Decrease of 18% from the Second Quarter of 2006; Net Loss of $1.3 Million Incurred in the Second Quarter of 2007
Mass (BUSINESS WIRE) July 31, 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, or diseases of the
nerves, and neurovascular diseases, announced today the financial results for
the three month and six month periods ended June 30, 2007.
revenues for the three months ended June 30, 2007, the Company s second
quarter, were $11.5 million, compared with $14.0 million for the second quarter
of 2006, representing a decline of 18%.
During the three month periods ended June 30, 2007 and June 30, 2006,
87% and 86% of revenues, respectively, were derived from biosensor sales, 11%
and 14% of revenues, respectively, were derived from diagnostic device sales
and 2% 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 during the first quarter of 2007.
revenues for the six months ended June 30, 2007 were $23.2 million, compared
with $25.8 million for the six months ended June 30, 2006, representing a
decline of 10%. During the six month
periods ended June 30, 2007 and June 30, 2006, 87% of revenues were derived
from biosensor sales, 11% and 13% of revenues, respectively, were derived from
diagnostic device sales and 2% and 0% of revenues, respectively, were derived
from DigiScope sales.
gross margin percentage for the second quarter of 2007 was 73.3% of revenues,
compared with 75.8% of revenues for the second quarter of 2006. In the second
quarter of 2007, the gross margin percentage for biosensors was 73.4% of
revenues, compared with 74.9% of revenues in the second quarter of 2006, due to
a change in the mix of biosensors sold and higher product warranty costs. The
gross margin percentage for diagnostic devices was 80.7% of revenues for the
second quarter of 2007, compared with 81.4% of revenues for the second quarter
of 2006. Overall gross margins in the
second quarter of 2007 were impacted by the gross margins on the DigiScope,
which were 20.3%. DigiScope revenues
during the second quarter of 2007 were primarily from existing customer
accounts we acquired from EyeTel in connection with our licensing
agreement. Under the terms of our
agreement with EyeTel, we remit a portion of DigiScope revenues to them and the
agreed upon split of revenues for existing customer accounts is less favorable
to the Company than the revenue split for new customer accounts. We expect that the gross margin on DigiScope
revenues will continue to increase in future quarters as we continue to secure
additional customers.
gross margin percentage for the six months ended June 30, 2007 was 73.5% of
revenues, compared with 75.7% of revenues for the six months ended June 30,
2006. For the six months ended June 30, 2007, the gross margin percentage for
biosensors was 73.6% of revenues, compared with 74.9% of revenues for the six
months ended June 30, 2006, due to a change in the mix of biosensors sold and higher
product warranty costs. The gross margin percentage for diagnostic devices was
81.4% of revenues for the six months ended June 30, 2007, compared with 81.0%
of revenues for the six months ended June 30, 2006. Overall gross margins for the six months ended
June 30, 2007 were impacted by the gross margins on the DigiScope, which were
loss for the second quarter of 2007 was $1.3 million, compared with net income
of $1.2 million for the second quarter of 2006, including stock-based compensation
expense of $861,300 and $626,800 for the second quarter of 2007 and 2006,
During the second quarter of 2007, we reversed
approximately $1.7 million in previously accrued state sales taxes as a result
of receiving amnesty from certain states and as a result of negotiating a
limitation of the look back period and a waiver of penalties by certain other
states. This was accounted for as a
reduction in general and administrative expenses. Also during the second quarter of 2007, we
experienced a significant increase in
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.
loss for the six month period ended June 30, 2007 was $2.7 million, compared
with net income of $1.1 million for the six month period ended June 30, 2006,
including stock-based compensation expense of $1,429,000 and $1,364,000 for the
six month periods ended June 30, 2007 and 2006, respectively.
Basic and diluted net loss per share was $(0.10) for the three months ended June 30, 2007, compared with basic and diluted net income per share of $0.10 and $0.09, respectively, for the three months ended June 30, 2006.
Basic and diluted net loss per share was $(0.21) for the six months ended June 30, 2007, compared with basic and diluted net income per share of $0.09 for the six months ended June 30, 2006.
and cash equivalents and short-term investments totaled $37.1 million as of
June 30, 2007, compared with $40.3 million as of December 31, 2006.
Gozani, M.D., Ph.D., NeuroMetrix s President & CEO commented, Our revenues
in the second quarter of 2007 were down 18% from the same period in 2006 and were
down 2% sequentially from the first 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, including Blue Cross Blue Shield regional carriers, 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.
also continued to experience a decline in average biosensor usage per customer
account during the second quarter of 2007, likely due to the reimbursement
environment. However, we continued to expand our overall active customer count
to a total of over 5,400 physician practices and clinics as of the end of the
second quarter of 2007, which is a twelve-month look back at accounts utilizing
the NC-stat System. A total of 275,900
biosensors were used by our customers during the second quarter of 2007,
representing a decrease of 4% compared with the 287,200 biosensors used by our
customers in the second quarter of 2006 and representing a decline of 6%
sequentially from the 293,200 biosensors used in the first quarter of 2007.
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
building on the fact that the NC-stat has FDA 510(k) clearance as conventional
nerve conduction equipment, has been scientifically and clinically validated as
evidenced by approximately forty five peer-reviewed publications, abstracts and