NeuroMetrix Reports Q3 2013 Results

  NeuroMetrix Reports Q3 2013 Results

 Progress in Building Broad Distribution Channel for SENSUS^™ Pain Management
                                    System

Business Wire

WALTHAM, Mass. -- October 23, 2013

NeuroMetrix, Inc. (the “Company”) (Nasdaq: NURO), a medical device company
focused on the treatment and management of the neurological complications of
diabetes, today reported business and financial highlights for the third
quarter ended September 30, 2013.

The Company is building a broad national distributional channel for its SENSUS
Pain Management System, which is a novel transcutaneous electrical nerve
stimulator intended for treating chronic pain. SENSUS is a convenient and
wearable non-invasive device that offers physicians and their patients a
non-narcotic pain relief option as a complement to medications. The device is
lightweight and can be worn during the day while remaining active, or at night
while sleeping. The Company believes it is the only transcutaneous electrical
nerve stimulator designed specifically for people with diabetes that suffer
from chronic pain. The most common cause of such pain is painful diabetic
neuropathy (PDN), which affects up to 5 million people in the U.S. alone. The
Company’s business strategy is to develop widespread distribution in the
United States through multiple sales channels while expanding the market
through complementary clinical indications.

Recent highlights:

  *Third quarter 2013 revenue of $1.3 million represented sequential growth
    from $1.2 million revenue reported for the second quarter of 2013.
  *SENSUS shipments accelerated to 557 devices in the third quarter, up from
    210 devices in the second quarter and 145 devices in the first quarter of
    product launch. To date, over 1,000 SENSUS devices have been shipped.
  *Simplex Healthcare entered an agreement to offer SENSUS through its wholly
    owned subsidiary, Diabetes Care Club, which is one of the largest
    providers of mail order diabetes supplies in the United States.
  *Rehabilitation Management Group (RMG) and its subsidiary, OsteoArthritis
    Centers of America, entered an agreement to incorporate SENSUS into their
    proprietary chronic pain programs, which are offered by over 100
    affiliated clinics.
  *David Van Avermaete, former US President of the LifeScan division of
    Johnson & Johnson and a seasoned executive in the medical device and
    diabetes field, joined the company’s Board of Directors. This added
    valuable commercialization experience.

“SENSUS is gaining attention among key national distribution companies who see
the clinical and market potential for a non-narcotic, non-addictive pain
relief option,” said Shai N. Gozani, M.D., Ph.D., President and Chief
Executive Officer of NeuroMetrix. “Although the engagement process takes time,
we are encouraged by our recently-announced partnerships with Diabetes Care
Club and OsteoArthritis Centers of America. Our distributor pipeline is active
and expanding. We continue to be focused on building a sound distribution
foundation capable of accelerating SENSUS revenues in 2014 and beyond.”

The Company reported its financial results for the third quarter of 2013.
Total revenues were $1.3 million compared with $1.8 million for the third
quarter of 2012. Gross profit for the third quarter of 2013 was 56.0 percent
of total revenues compared to 55.0 percent of total revenues in the third
quarter of 2012. Operating expenses for the third quarter of 2013 were $2.3
million compared to $3.6 million in the third quarter of 2012. The Company
recognized other income of $0.9 million in the third quarter of 2013 from the
change in value of outstanding common stock warrants. Net loss for the third
quarter of 2013 was $0.7 million, or $0.26 per share compared to a net loss of
$2.6 million for the third quarter of 2012, or $1.24 per share. NeuroMetrix
reported net cash usage of $1.8 million in the third quarter of 2013 and ended
the period with cash resources of $7.8 million. Per share amounts have been
adjusted for the effects of the February 2013 reverse stock split.

For the nine month period ended September 30, 2013, the Company reported
revenues of $3.9 million and a net loss of $4.3 million, or $2.13 per share.
In the comparable nine month period ended September 30, 2012, the Company
recorded revenues of $6.1 million and a net loss of $8.1 million, or $4.37 per
share.

Company to Host Live Conference Call and Webcast

NeuroMetrix management will host a conference call today, October 23, 2013 at
8:00 a.m., Eastern time. To access the call, dial 866-318-8616 (domestic), or
617-399-5135 (international). The confirmation code is 45881864. 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 two weeks starting two hours after the
call by dialing 888-286-8010 (domestic) or 617-801-6888 (international), and
the confirmation code is 10333915.

About NeuroMetrix

NeuroMetrixis a medical device company that develops and markets home use and
point-of-care devices for the treatment and management of chronic pain,
peripheral neuropathies, and associated neurological disorders. The Company is
presently focused on diabetic neuropathies, which affect over 50% of people
with diabetes. If left untreated, diabetic neuropathies trigger foot ulcers
that may require amputation and cause disabling chronic pain. The annual cost
of diabetic neuropathies has been estimated at$14 billionintheUnited
States. The company markets the SENSUS^™ Pain Management System for treating
chronic pain, focusing on physicians managing patients with painful diabetic
neuropathy. The company also markets the 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. For more information, please visithttp://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 SENSUS and NC-stat
DPNCheck, our ability to build a successful business focused on diabetic
peripheral neuropathy, our hope of expanding our commercial sales channel of
our diabetic neuropathy products and our hope that entering into SENSUS pilot
programs with national distribution partners will rapidly expand SENSUS
awareness and sales. 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)
                                               
                 Quarters Ended                   Nine Months Ended
                 September 30,                    September 30,
                 2013           2012             2013            2012
                                                                                
Revenues         $ 1,314,728     $ 1,764,764      $ 3,876,654      $ 6,052,137
Cost of          578,484         793,990          1,649,429        2,912,284
revenues
Gross profit     736,244         970,774          2,227,225        3,139,853
Operating
expenses:
Research and     740,324         980,361          2,727,590        2,979,153
development
Sales and        581,079         1,457,079        2,241,138        4,586,822
marketing
General and      1,014,295       1,147,075        3,240,049        3,720,407
administrative
Total
operating        2,335,698       3,584,515        8,208,777        11,286,382
expenses
                                                                                
Loss from        (1,599,454  )   (2,613,741   )   (5,981,552   )   (8,146,529   )
operations
Interest         1,407           3,487            4,570            11,812
income
Warrants         —               —                (376,306     )   —
offering costs
Change in fair
value of         881,783         —                2,037,779        —
warrant
liability
                                                                                
Net loss         $ (716,264  )   $ (2,610,254 )   $ (4,315,509 )   $ (8,134,717 )
                                                                                
Net loss per
common share
applicable to
common           $ (0.26     )   $ (1.24      )   $ (2.13      )   $ (4.37      )
stockholders,
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)
                                                          
                                             September 30,   December 31,

                                             2013            2012
                                                             
Cash and cash equivalents                    $  7,836,168    $ 8,699,478
Other current assets                         1,659,603       1,873,588
Noncurrent assets                            207,135         304,381
Total assets                                 $  9,702,906    $ 10,877,447
                                                             
                                                               
Current liabilities                          $  1,894,924    $ 2,005,606
Noncurrent liabilities:
Common stock warrants                        1,973,426       —
Other                                        27,379          71,419
Stockholders’ equity                         5,807,177       8,800,422
Total liabilities and stockholders’ equity   $  9,702,906    $ 10,877,447

Contact:

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