Full Press Release Details
NeuroMetrix, Inc. Reports Total
Revenues of $11.8 Million for the First Quarter of 2007, Unchanged from the
First Quarter of 2006; Net Loss of $1.4 Million Incurred in the First Quarter
WALTHAM, Mass. (BUSINESS
WIRE) May 1, 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 period ended March 31, 2007.
Total revenues for the
three months ended March 31, 2007, the Company s first quarter, were $11.8
million, the same level of revenues reported for the first quarter of
2006. During the three month periods
ended March 31, 2007 and March 31, 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. The DigiScope, a
product for the detection of diabetic retinopathy licensed from EyeTel Imaging,
Inc., was launched during the first quarter of 2007.
percentage for the first quarter of 2007 was 73.7% of revenues, compared with
75.6% of revenues for the first quarter of 2006. In the first quarter of 2007,
the gross margin percentage for biosensors was 73.8% of revenues, compared with
74.9% of revenues in the first quarter of 2006, due to a change in the mix of
biosensors sold. The gross margin percentage for diagnostic devices was 82.0%
of revenues for the first quarter of 2007, compared with 80.3% of revenues for
the first quarter of 2006. Overall gross
margins in the first quarter of 2007 were impacted by the gross margins on the
DigiScope, which were 18.2%. DigiScope
revenues during the first 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 than the revenue split for new
customer accounts. We expect that the
gross margin on DigiScope revenues will increase in future quarters as we
secure additional customers.
The net loss for the first quarter of 2007 was $1.4 million, compared
with a restated net loss of $103,000 for the first quarter of 2006, including
stock-based compensation expense of $568,000 and $737,000 for the first quarter
of 2007 and 2006, respectively.
Basic and diluted net
loss per share was $(0.11) for the three months ended March 31, 2007, compared
with $(0.01) for the three months ended March 31, 2006.
Cash and cash equivalents
and short-term investments totaled $38.6 million as of March 31, 2007, compared
with $40.3 million as of December 31, 2006.
Shai N. Gozani, M.D.,
Ph.D., NeuroMetrix s President & CEO commented, Our revenues in the first
quarter were essentially flat compared with the same period in 2006. However,
we experienced a decline in revenues of approximately 17% sequentially from the
fourth quarter of 2006. In the fourth quarter of 2006 and the first quarter of
2007, several Medicare carriers issued policies requiring customers using the
NC-stat System to submit for reimbursement under a miscellaneous CPT code
(95999) rather than the codes used for traditional nerve conduction testing. We
believe that our revenues in the first quarter of 2007 were impacted by
customers uncertainty about the level of reimbursement under this
miscellaneous code, additional paperwork requirements necessary to receive
reimbursement and the reimbursement environment in general.
We also experienced a
decline in average biosensor usage per customer account during the first
quarter of 2007 likely
due to the reimbursement environment. However, we continued to expand our
overall active customer count to a total of over 5,200 physician practices and
clinics as of the end of the first quarter of 2007, which is a twelve month
look back at accounts utilizing the NC-stat System. A total of 293,200 biosensors were used by
our customers during the first quarter of 2007, an increase of 15% over the
255,500 biosensors used by our customers in the first quarter of 2006 and a
decline of 5% from the 310,100 biosensors used in the fourth quarter of 2006.
stated, We have seen a number of developments on the reimbursement front
recently. Several commercial payers,
including certain Blue Cross Blue Shield regional carriers, have taken
unfavorable positions toward the NC-stat, referring to it as experimental and
investigational. On the other hand,
First Coast Service Options (or FCSO), the Part B Medicare intermediary for
Florida and Connecticut, has stated in their most recent nerve conduction
policy that the NC-stat is to be reimbursed under the traditional nerve
conduction codes not a miscellaneous code as they had previously required. In so doing, FCSO has appropriately
determined that the issue of nerve conduction coding is a matter for the
American Medical Association. We view
this as a very positive development for our customers and for NeuroMetrix.
We also note that the
American Medical Association CPT editorial panel has formed a work group to
review reimbursement coding for nerve conduction studies using equipment with
automated enhancements, including the NC-stat System and other traditional
equipment, Dr. Gozani commented. We understand that the work group will be
seeking input from physicians across a number of different specialties but we
do not know what the timeframe is expected to be for their
recommendations. We look forward to
participating in this process.
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 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 over forty
peer-reviewed publications, abstracts and posters, and is used by a broad base
of physician office practices comprised of approximately 15,000 physicians.
Dr Gozani continued: We
expect that revenues could continue to decline and that we could continue to
incur net losses due to the reimbursement issues our customers are facing. We are focused on helping our customers obtain
appropriate reimbursement for NC-stat testing and in protecting and building