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.