Full Press Release Details
NeuroMetrix, Inc. Reports Total Revenues
of $7.3 Million for the Third Quarter of 2008
36% from the third quarter of 2007
investment position of $21.6 Million
Increase in shipments of ADVANCE NCS/EMG System to neurologists and other
specialists with peripheral nerve expertise; ADVANCE Needle EMG module released
to customers in October, 2008
DigiScope product line discontinued as of November 1, 2008
WALTHAM, Mass. (BUSINESS WIRE) November 4, 2008 NeuroMetrix, Inc.
(Nasdaq: NURO), a science-based medical device company advancing patient care
through the development and marketing of innovative medical device products
physicians in the assessment and treatment of diseases and injuries of
peripheral nerves, and that provide regional anesthesia and pain control, announced
today its financial results for the three- and nine-month periods ended September 30,
Total revenues for the three months ended September 30, 2008, the
Company s third quarter, were $7.3 million, compared with $11.3 million for the
third quarter of 2007, representing a decline of 36%. During the three-month periods ended September 30,
2008 and 2007, 91% and 89% of revenues, respectively, were derived from
consumables sales, 6% and 8% of revenues, respectively, were derived from
medical equipment sales and 3% and 3% of revenues, respectively, were derived
from DigiScope sales. Medical equipment
sales include revenues from sales of NC-stat devices and NC-stat docking
stations and the ADVANCE device and related modules. Consumables sales includes
revenues from sales of nerve specific electrodes and, in future periods, are
expected to also include revenues from other consumables that have been
developed for use with the ADVANCE System.
Total revenues for the nine months ended September 30, 2008 were
$24.9 million, compared with $34.5 million for the nine months ended September 30,
2007, representing a decline of 28%.
During the nine month periods ended September 30, 2008 and September 30,
2007, 90% and 88% of revenues, respectively, were derived from consumable
sales, 7% and 10% of revenues, respectively, were derived from medical
equipment sales and 3% and 2% of revenues, respectively, were derived from
The costs of revenues as a percentage of total revenues for the third
quarter of 2008 were 31.0%, compared with 27.0% for the third quarter of 2007.
In the third quarter of 2008, the costs of revenues as a percentage of total
revenues increased due to increased discounting resulting in lower average
selling prices due, in part, to the transition of certain specialist physicians
using the NC-stat System to the ADVANCE System.
The costs of revenues as a percentage of total revenues for the nine
months ended September 30, 2008 was 29.1%, compared with 26.7% for the
nine months ended September 30, 2007. For the nine months ended September 30,
2008, the costs of revenues as a percentage of total revenues increased due to
lower sales volumes and increased discounting resulting in lower average
selling prices as discussed above.
The net loss for the third quarter of 2008 was approximately $7.9
million, including an asset impairment and restructuring charge of $5.0 million
resulting from our decision to shut down our DigiScope business operations as
previously announced and a write-down of $169,300 of our investment in
Cyberkinetics Neurotechnology Systems Inc., compared with a net loss of
approximately $3.6 million for the third quarter of 2007. The net
loss for the nine-month period ended September 30, 2008 was $23.6 million,
including the asset impairment and restructuring charge of $5.0 million mentioned
above, a goodwill impairment charge of $5.8 million and a write-down of $2.2
million of our investment in Cyberkinetics, compared with net loss of $6.2
million for the nine-month period ended September 30, 2007.
Basic and diluted net loss per share was $(0.57) for the three months ended September 30, 2008 compared with basic and diluted net loss per share of $(0.28) for the three months ended September 30, 2007. Basic and diluted net loss per share was $(1.72) for the nine months ended September 30, 2008, compared with basic and diluted net loss per share of $(0.49) for the nine months ended September 30, 2007.
Cash and cash equivalents and short-term investments totaled $21.6
million as of September 30, 2008 a decrease of $1.2 million when compared
to the balance of $22.8 million as of June 30, 2008 and compared with $29.7
million as of December 31, 2007.
Shai N. Gozani, M.D., Ph.D., NeuroMetrix s President & CEO
commented, Our revenues in the third quarter of 2008 were down approximately
36% from the same period in 2007 primarily due to the continued uncertainty
surrounding reimbursement for the NC-stat System, the 40% reduction in our
direct sales force in the second quarter of 2008, and the termination of our
independent sales agency relationships, which had accounted for a majority of
our new customer lead generation, during the second half of 2007. During the last quarter, our active customer
count, which is a twelve-month look back at accounts utilizing our
neurodiagnostic instruments, decreased by about 150 to 5,329 physician practices
and clinics as of the end of the third quarter of 2008 from the second quarter
of 2008. The average consumables usage
per customer also decreased about 10% during the third quarter of 2008 from the
Dr. Gozani continued, The American Medical
Association ( AMA ) formed a
work group in early 2007 to examine reimbursement coding for nerve conduction
studies. The findings of this work group were originally presented to the AMA
CPT Editorial Panel at its February 2008 meeting. At that meeting, the Editorial Panel voted
on a Category III code describing nerve conduction studies performed with
pre-configured electrode arrays, which must be utilized with the NC-stat
System. However, the AMA did not publish
any new Category III CPT codes for nerve conduction studies on July 1,
2008 when it published its list of new Category III CPT codes. During its October 2008 meeting, the
CPT Editorial Panel again considered nerve testing as an agenda item. The Panel voted on whether to create a new
Category I CPT code for nerve conduction studies performed with pre-configured
electrode arrays. Following its
procedures, the Panel will release the outcome of the vote when the minutes of
the meeting are finalized and approved.
further commented, We continue to believe that nerve conduction studies have
an important role in primary care and will actively support the family and
internal medicine physicians currently using the NC-stat to optimize their
clinical care of patients. However, until our primary care customers attain
reimbursement clarity, we expect limited new sales of NC-stat Systems within
this market. We are now focusing our
medical equipment sales efforts on specialist physicians with peripheral nerve
expertise. In line with this
strategy, we closed the DigiScope business.
Dr. Gozani added, During the third quarter of 2008, we redirected
the core focus of our sales organization from selling NC-stat to primary care
physicians to selling ADVANCE Systems to specialists physicians with peripheral