ISELIN, N.J., Aug. 14, 2015 /PRNewswire/ -- Echo Therapeutics, Inc. (NASDAQ: ECTE), a medical device company focused on non-invasive continuous glucose monitoring (CGM) and associated technologies, today announced its financial results for the quarter ended June 30, 2015. Echo's Quarterly Report on Form 10-Q, as filed with the SEC, is available by visiting the Investors section of Echo's website at www.echotx.com.
Second Quarter 2015 Financial Results
For the quarter ended June 30, 2015, newly-hired corporate management made a strategic decision to focus solely on the completion and approval of its CGM system and abandon the out-licensing strategy it had hoped to pursue for the Company's AzoneTS-based technology it acquired in 2007. Management's determination focused on Echo's only modest advancement of the development programs for the Azone TS-based technology, which included the Azone Drug Master File, the Durhalieve and MAZ Investigational New Drug Applications and the MAZ Orphan Drug application, since its acquisition. Additional information gathered from findings related to a review of competitive formulations and lengthy discussions with outside consultants, together with potential further investment needed, led management to conclude that the carrying amount wasn't recoverable during the remaining short patent lives of these intangibles and that no monies could likely be expected to be obtained from these intangibles. Accordingly, an impairment charge for the full value of the intangibles, or $9.6 million, was recorded.
Echo's net loss for the second quarter of 2015 was $10.8 million, or ($0.97) per share, compared to $3.8 million, or ($0.31) per share, for the same period in 2014. The $7 million increase in net loss was a result of the aforementioned impairment charge on the Azone-TS-based technology intangibles, offset by decreases in research and development (R&D) and selling, general and administrative (S,G&A) expenses. Research and development expenses were $0.8 million for the second quarter of 2015 compared to $1.7 million for the second quarter of 2014. The decrease in research and development expenses was solely a function of the funding available to the Company. S,G&A expenses were $1.4 million during the second quarter of 2015 compared to $2.2 million during the first quarter of 2014. The decrease in S,G&A expenses was due to the absence of the proxy battle fees reflected in the 2014 quarter.
Product Development Update:
During the first half of 2015, Echo focused on adapting its non-invasive continuous glucose monitoring technology for the diabetes and wearable-health markets. Progress included the following improvements to the key components of the system:
- Skin Preparation Device: Echo completed the industrial design of a new, lower-cost self-exfoliating device and tip that will be easier to use and is compatible with the new sensor.
- Sensor: Echo completed the industrial design of a lower-cost, flexible glucose sensor that will be higher performing and smaller with a re-usable Bluetooth transmitter.
- Display: Echo developed its wireless mobile communication technology that makes it possible to transmit glucose data via Bluetooth LE (BLE) from the Company's glucose sensor to any mobile platform.
Other Recent Corporate Highlights:
- After numerous consultations with the Chinese government (CFDA), Echo's strategic partner, Medical Technologies Innovation Asia (MTIA) believes that Echo's locally produced needle-free CGM products will be designated as a Class 2 medical device. Class 2 medical devices have a CFDA review period of 90 working days after filing submission. A formal and final designation from the CFDA is determined only at the time of submission.
- In July 2015, Echo moved its research and development facility to a 10,000 square foot facility in Littleton, Massachusetts from its 37,000 square foot facility in Franklin, Massachusetts. This move followed the January 2015 corporate headquarters move to a 2,800 square foot office space in Iselin, New Jersey from its 7,900 square foot office in Philadelphia, Pennsylvania. Management estimates that these relocations will save the Company an aggregate of approximately $1 million.
- In July 2015, Echo launched its new and completely re-designed corporate website echotx.com. Echo's new site provides quick and intuitive access to Echo's technology and enhances the quality and availability of company information.
- In May 2015, management presented a live demonstration of a Smartphone application that displays glucose data from Echo's glucose sensor and provided a glucose tracking comparison against an industry leading CGM at the Marcum MicroCap Conference. Management will continue to demonstrate the technology and provide corporate updates at upcoming conferences.
"We have made substantial progress in improving and adapting our CGM technology and I continue to be excited about the future of our medical device's applicability for the diabetes and wearable-health markets," said Scott W. Hollander, Echo's President and CEO. "I strongly believe in our development team's and our Chinese partner MTIA's ability to execute on our plan to better position the Company to realize the long-term potential of our CGM technology. We look forward to providing a corporate update call in the near-term to provide stakeholders with more details on our progress and our plans for the future."
About Echo Therapeutics
Echo Therapeutics is developing its non-invasive, wireless, continuous glucose monitoring (CGM) system. A significant opportunity exists for the Company's CGM to be used in the outpatient diabetes market and in the fitness, weight loss and personal lifestyle wearable-health space. A longer-term opportunity also exists in the hospital settings. Echo developed its needle-free skin preparation device as a platform technology that allows for enhanced skin permeation enabling 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 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 clinical studies, the safety and efficacy of Echo's CGM System, the failure of future development and preliminary marketing efforts related to Echo's 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 Echo's 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 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, 2014, 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 (732) 549-0128
SOURCE Echo Therapeutics, Inc.