NeuroMetrix Reports Q4 2012 Results

  NeuroMetrix Reports Q4 2012 Results

Business Wire

WALTHAM, Mass. -- February 19, 2013

NeuroMetrix, Inc. (Nasdaq: NURO), a medical device company focused on the
diagnosis and treatment of the neurological complications of diabetes, today
reported business and financial highlights for the quarter and twelve months
ended December 31, 2012.

The Company is working to develop a high growth, profitable diabetes franchise
focused on diabetic peripheral neuropathy, or DPN. It is the most common
complication of diabetes, affecting over half of people with diabetes. DPN
causes significant morbidity including pain, increased risk of falling in the
elderly, and is the primary trigger for diabetic foot ulcers which may require
lower extremity amputations. The Company has two diabetes products: a
diagnostic test, NC-stat^® DPNCheck^™, which was launched in the fourth
quarter of 2011, and the SENSUS^™ Pain Management System, which was launched
in January 2013. The Company also sells the ADVANCE^™ general purpose nerve
testing system.

Recent highlights include:

  *SENSUS Pain Management System. The Company received FDA clearance for the
    SENSUS Electrode on November 29, 2012 which completed the regulatory
    requirements needed for commercial launch. Commercial shipments were
    initiated in early January 2013. The Company has seven durable medical
    equipment (DME) suppliers with 30 field sales representatives. The goal is
    to have 100 DME sales representatives by mid-year and 250 sales
    representatives by year end.
  *NC-stat DPNCheck. The Company is focused on Medicare Advantage accounts
    and selected international markets. Domestic sales efforts are
    concentrated in a small, high-level commercial team. The Company currently
    has three active customers with a total of about 130,000 covered lives. An
    additional three Medicare Advantage plans, with a total of about 130,000
    covered lives, are planning or carrying out pilot programs. Total NC-stat
    DPNCheck revenue for 2012 was $1.4 million of which about $600,000 was
    attributed to Medicare Advantage accounts.
  *Operational Consolidation. The Company’s narrow commercial focus allowed
    it to streamline operations and reduce expenses. This included shutting
    down its direct sales force for NC-stat DPNCheck which has been targeting
    individual endocrinology and podiatry clinics. Employee headcount is
    currently at 35, a 40% reduction over the course of 2012. As a
    consequence, operating expenses are forecasted to decrease about 20% in
    2013 into the range of $11-$12 million from $14 million for 2012.
  *Capital Structure Adjustment. The Company executed a reverse split of its
    common stock on a 1:6 share basis effective for trading starting on
    February 19, 2013. The reverse split is intended to increase the per share
    trading price of the Company’s common stock to satisfy the $1.00 minimum
    bid price requirement for continued listing on the NASDAQ Capital Market.

“We enter 2013 with two novel and proprietary diabetes products, a focused
commercial plan, and a lower cost operating structure that we can leverage
with growth,” said Shai N. Gozani, M.D., Ph.D., President and Chief Executive
Officer of NeuroMetrix. “We met our financial, product development and
commercial goals during 2012. Fiscal 2013 is an important year for the
Company. We are optimistic about the market potential for our products and the
diabetic neuropathy space in general.”

The Company reported its financial results for the fourth quarter of 2012.
Total revenues were $1.5 million compared with $2.4 million for the fourth
quarter of 2011. Diabetes products contributed revenue of $352,000 with the
balance of $1,171,000 in revenue derived from the legacy ADVANCE business.
Gross margin for the fourth quarter of 2012 was 55.6 percent of total revenues
compared to 49.1 percent gross margin reported in the fourth quarter of 2011.
Operating expenses for the fourth quarter of 2012 were $2.7 million compared
to $3.6 million in the fourth quarter of 2011. Net loss for the fourth quarter
of 2012 was $1.9 million or $0.89 per share. The Company reported a net loss
of $2.4 million for the fourth quarter of 2011 or $3.76 per share. NeuroMetrix
reported net cash usage of $2.2 million in the fourth quarter of 2012 and
ended the period with cash resources of $8.7 million. Per share amounts have
been adjusted for the effects of the reverse split.

For the year ended December 31, 2012, the Company reported revenues of $7.6
million and a net loss of $10.0 million or $5.22 per share. In the year ended
December 31, 2011, the Company recorded revenues of $10.4 million and a net
loss of $10.0 million or $15.53 per share.

Company to Host Live Conference Call and Webcast

NeuroMetrix management will host a conference call today, February 19, 2013 at
8:00 a.m., Eastern time. To access the call, dial 866-825-3308 (domestic), or
617-213-8062 (international). The confirmation code is 23668017. The call will
also be webcast and will be accessible from the Company's website at
http://www.neurometrix.com under the "Investor Relations" tab. A replay of the
conference call will be available for three months starting two hours after
the call by dialing 888-286-8010 (domestic) or 617-801-6888 (international),
and the confirmation code is 85981713.

About NeuroMetrix

NeuroMetrixis an innovative medical device company that develops and markets
home use and point-of-care devices for the treatment and management of
diabetic neuropathies, which affect over 50% of people with diabetes. If left
untreated, diabetic neuropathies trigger foot ulcers that may require
amputation, cause disabling chronic pain, and increase the risk of falling in
the elderly. The annual cost of diabetic neuropathies has been estimated
at$14 billioninthe United States. The company’s products are used by
physicians and managed care organizations to optimize patient care and reduce
healthcare costs. The company markets the NC-stat^®DPNCheck^™device, which
is a rapid, accurate, and quantitative point-of-care test for diabetic
neuropathy. This product is used to detect diabetic neuropathy at an early
stage and to guide treatment. The company also markets the SENSUS^™ Pain
Management System for treating chronic pain, focusing on physicians managing
patients with painful diabetic neuropathy. The company has additional
therapeutic products in its pipeline. For more information, please visit
http://www.neurometrix.com.

Safe Harbor Statement

The statements contained in this press release include forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
including, without limitation, statements regarding the company’s or
management’s expectations relating to the adoption of NC-stat DPNCheck and
SENSUS, our ability to build a successful business focused on diabetic
peripheral neuropathy, and our hope of expanding our commercial sales channel
of our diabetic neuropathy products. While the company believes the
forward-looking statements contained in this press release are accurate, there
are a number of factors that could cause actual events or results to differ
materially from those indicated by such forward-looking statements, including,
without limitation, our estimates of future performance, and our ability to
successfully develop, receive regulatory clearance or approval, commercialize
and achieve market acceptance for any of our products. There can be no
assurance that future developments will be those that the company has
anticipated. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors including those risks, uncertainties and
factors referred to in the company’s most recent Annual Report on Form 10-K as
well as other documents that may be filed from time to time with the
Securities and Exchange Commission or otherwise made public. The company is
providing the information in this press release only as of the date hereof,
and expressly disclaims any intent or obligation to update the information
included in this press release or revise any forward-looking statements.

NeuroMetrix, Inc.
Condensed Statements of Operations
(Unaudited)
                                                    
                   Quarter Ended                         Year Ended
                   December 31,                          December 31,
                   2012             2011               2012              2011
                                                                                          
Revenues           $ 1,523,152        $ 2,359,863        $ 7,575,289         $ 10,396,775
Cost of            676,522            1,200,302          3,588,806           4,722,069
revenues
Gross profit       846,630            1,159,561          3,986,483           5,674,706
Operating
expenses:
Research and       566,637            827,639            3,545,790           3,877,526
development
Sales and          1,140,660          1,523,809          5,727,482           6,688,591
marketing
General and        1,014,831          1,228,369          4,735,238           5,111,616
administrative
Total
operating          2,722,128          3,579,817          14,008,510          15,677,733
expenses
                                                                                          
Loss from          (1,875,498   )     (2,420,256   )     (10,022,027   )     (10,003,027  )
operations
Interest           2,662              3,968              14,474              21,922
income
                                                                                          
Net loss           $ (1,872,836 )     $ (2,416,288 )     $ (10,007,553 )     $ (9,981,105 )
                                                                                          
Net loss per
common share       $ (0.89      )     $ (3.76      )     $ (5.22       )     $ (15.53     )
data, basic
and diluted

Note: per share amounts have been adjusted to reflect the Company’s

1:6 reverse stock-split which occurred on February 15, 2013.


Condensed Balance Sheets
(Unaudited)
                                                            
                                               December 31,       December 31,

                                               2012               2011
                                                                  
Cash and cash equivalents                      $ 8,699,478        $ 10,290,446
Other current assets                           1,873,588          3,204,860
Noncurrent assets                              304,381            725,477
Total assets                                   $ 10,877,447       $ 14,220,783
                                                                  
Current liabilities                            $ 2,005,606        $ 3,012,916
Noncurrent liabilities                         71,419             119,346
Stockholders’ equity                           8,800,422          11,088,521
Total liabilities and stockholders’ equity     $ 10,877,447       $ 14,220,783

Contact:

NeuroMetrix, Inc.
Thomas T. Higgins, 781-314-2761
SVP and Chief Financial Officer
neurometrix.ir@neurometrix.com
 
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