Echo Therapeutics Announces Third Quarter 2013 Financial Results

Company to Host Conference Call Today, November 7, 2013 at 9:00 AM EST

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Nov 07, 2013, 07:50 ET

PHILADELPHIA, Nov. 7, 2013 /PRNewswire/ -- Echo Therapeutics, Inc. (Nasdaq: ECTE), a medical device company developing its Symphony^® CGM System as a non-invasive, wireless continuous glucose monitoring system, today announced its financial results for the quarter ended September 30, 2013. Echo's Quarterly Report on Form 10-Q, when filed with the SEC, will be available by visiting the Investors section of Echo's website at www.echotx.com.

Recent Corporate Highlights

Echo continued to enroll patients in its multi-center clinical trial of its Symphony CGM System in surgical patients in hospital critical care units. The Company expects to complete the study in the fourth quarter, and will subsequently submit the CE Mark Technical File for marketing approval in Europe.
Echo received comments from the U.S. Food and Drug Administration (FDA) Center for Devices and Radiological Health on the pre-submission package that was filed in June 2013. Subsequent to the end of the third quarter, the Company met with the FDA to obtain guidance regarding the regulatory pathway for Symphony. Based on the FDA's comments and Echo's preliminary statistical analysis, the Company believes the FDA Pivotal Trial will have a sample size of 250-350 patients. Echo also plans to submit an Investigational Device Exemption, or IDE, for a Clamping Study to manipulate glucose levels on healthy volunteers to provide the Company with additional data to support its eventual Premarket Approval, or PMA, submission.
Robert F. Doman was appointed Echo's Executive Chairman and Interim Chief Executive Officer, effective August 26, 2013.
At the end of the third quarter, Echo implemented a number of substantial cost reduction initiatives aimed at reducing operating costs, particularly marketing and manufacturing expenditures and corporate general and administrative costs. As a result of these initiatives, the fourth quarter burn rate is expected to decrease by approximately 35-40% from the quarterly burn rate experienced during the first three quarters of 2013.

"We continue to make significant progress toward completion of the CE Mark regulatory trial and look forward to sharing top-line data in the coming weeks. We remain confident that the clinical trial will deliver strong results and we continue to actively prepare for the CE Mark Technical File submission," commented Robert F. Doman, Executive Chairman and Interim CEO of Echo Therapeutics. "As we look toward 2014, we remain focused on obtaining European clearance of Symphony, as well as initiating our pivotal study to support PMA submission in the U.S. Furthermore, we continue to explore the potential for strategic partnerships and will disclose details if or when such a transaction is consummated."

Third Quarter 2013 Financial Results

Echo's net loss for the third quarter of 2013 was $5.2 million, or $0.49 per share, compared to $4.3 million, or $1.07 per share, for the third quarter of 2012. The operating loss for the third quarter of 2013 was $4.9 million compared to $3.6 million for the third quarter of 2012. Research and development expenses were $2.8 million for the third quarter of 2013 compared to $2.1 million for the third quarter of 2012. The increase in research and development expenses was primarily related to increased development, regulatory and clinical expenses, as well as manufacturing preparation costs. Selling, general and administrative expenses were $2.2 million for the third quarter of 2013 compared to $1.5 million for the third quarter of 2012. Selling, general and administrative expenses increased primarily due to prelaunch marketing and manufacturing activities. Echo reported a cash balance of approximately $6.1 million as of September 30, 2013.

Conference Call

Management will host a conference call today starting at 9:00 AM EST. To listen in and/or participate in the call, please dial (877) 300-8521 and reference Echo Therapeutics' Third Quarter Conference Call. The archived audiocast will be available for fourteen days following the call by visiting the Events section of Echo's website at www.echotx.com.

About Echo Therapeutics

Echo Therapeutics is developing the Symphony CGM System as a non-invasive, wireless, continuous glucose monitoring system for use initially in the hospital critical care setting. Significant opportunity also exists for Symphony to be used in the hospital beyond the critical care setting. The Prelude^® SkinPrep System, a component of the Symphony CGM System, allows for enhanced skin permeation that will enable extraction of analytes, such as glucose, and enhanced delivery of topical pharmaceuticals.

Cautionary Statement Regarding Forward Looking Statements

The statements in this press release that are not historical facts, including those regarding the announcement of clinical trial data, anticipated clinical trials and a reduction in Echo's fourth quarter burn rate, may constitute forward-looking statements that are based on current expectations and are subject to risks and uncertainties that could cause actual future results to differ materially from those expressed or implied by such statements. Those risks and uncertainties include, but are not limited to, risks related to regulatory approvals and the success of Echo's ongoing studies, including the safety and efficacy of Echo's Symphony CGM System, the failure of future development and preliminary marketing efforts related to Echo's Symphony CGM System, Echo's ability to secure additional commercial partnering arrangements, risks and uncertainties relating to Echo's and its partners' ability to develop, market and sell the Symphony CGM System, the availability of substantial additional equity or debt capital to support its research, development and product commercialization activities, and the success of its research, development, regulatory approval, marketing and distribution plans and strategies, including those plans and strategies related to its Symphony CGM System. These and other risks and uncertainties are identified and described in more detail in Echo's filings with the Securities and Exchange Commission, including, without limitation, its Annual Report on Form 10-K for the year ended December 31, 2012, its Quarterly Reports on Form 10-Q, and its Current Reports on Form 8-K. Echo undertakes no obligation to publicly update or revise any forward-looking statements.

For More Information:

Christine H. Olimpio
Director, Investor Relations and Corporate Communications
(215) 717-4104
[email protected]

Seth Lewis
Senior Vice President, Trout Group, LLC
(646) 378-2952

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Echo Therapeutics, Inc Condensed Consolidated Balance Sheets (Unaudited)
	September 30, 2013	December 31, 2012
ASSETS
Current Assets:
Cash and cash equivalents	$ 6,068,469	$ 3,747,210
Deferred financing costs, current portion	968,004	968,004
Prepaid expenses, cash restricted pursuant to letters of credit and other current assets	784,573	483,089
Total current assets	7,821,046	5,198,303
Property and equipment (including assets under capitalized leases), net of accumulated depreciation and amortization	1,586,898	1,638,395
Other Assets:
Intangible assets, net of accumulated amortization	9,625,000	9,625,000
Deferred financing costs, net of current portion	2,823,325	3,549,328
Other assets	12,066	10,566
Total other assets	12,460,391	13,184,894
Total assets	$ 21,868,335	$ 20,021,592

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$ 1,551,092	$ 2,319,219
Deferred revenue from licensing arrangements, current portion	90,228	90,228
Capital lease obligation, current portion	2,017	2,527
Derivative warrant liability	979,155	5,585,141
Accrued expenses and other current liabilities	1,595,920	1,581,448
Total current liabilities	4,218,412	9,578,563
Deferred revenue, note payable and capital lease obligation, net of current portion	22,557	212,423
Total liabilities	4,240,969	9,790,986
Commitments and contingencies
Stockholders' Equity:
Convertible preferred stock, Series C & D	30,160	30,160
Common stock	107,003	44,374
Additional paid-in capital	126,958,986	104,058,087
Accumulated deficit	(109,468,783)	(93,902,015)
Total stockholders' equity	17,627,366	10,230,606
Total liabilities and stockholders' equity	$ 21,868,335	$ 20,021,592

Condensed Consolidated Statements of Operations (Unaudited)
	Three Months Ended September 30,		Nine Months Ended September 30,
	2013	2012	2013	2012
Licensing revenue	$ 22,557	$ 30,927	$ 67,671	$ 92,781
Total revenues	22,557	30,927	67,671	92,781

Operating Expenses:
Research and development	2,756,005	2,139,465	9,994,877	5,731,417
Selling, general and administrative	2,192,412	1,508,069	6,590,206	4,702,325
Total operating expenses	4,948,417	3,647,534	16,585,083	10,433,742
Loss from operations	(4,925,860)	(3,616,607)	(16,517,412)	(10,340,961)

Other Income (Expense):
Interest expense, net	(241,185)	(88,488)	(3,655,341)	(84,257)
Debt financing costs	-	(160,000)	-	(160,000)
Loss on disposals of assets	-	-	-	(21,272)
Gain (loss) on revaluation of derivative warrant liability	(70,000)	(400,000)	4,605,986	201,281
Other income (expense), net	(311,185)	(648,488)	950,645	(64,248)
Net loss	$ (5,237,045)	$ (4,265,095)	$ (15,566,767)	$ (10,405,209)
Net loss per common share, basic and diluted	$ (0.49)	$ (1.07)	$ (2.06)	$ (2.65)
Basic and diluted weighted average common shares outstanding	10,688,781	3,985,888	7,571,733	3,925,637