Shares of Echo Therapeutics, Inc. (NASD:ECTE) rose 10% since the announcement of its submission of Conformite Europeenne (CE) Mark Technical File in order to obtain the market approval for its Symphony continuous glucose monitoring (:CGM) system. According to a study, Symphony CGM is capable of monitoring glucose levels as it did on 32 patients in critical care units at four hospitals.
CE Marking implies a medical device’s compliance with European Union (EU) legislation and directives with respect to safety, health, environmental and consumer protection. It is necessary for commercialization in countries in the EU. ECTE expects to receive the CE Marking in the second quarter of the year.
Last month, Echo Therapeutics reached a collaboration agreement with Hong Kong-based Medical Technologies Innovation Asia (:MTIA), Ltd., through which its Symphony continuous glucose monitoring (:CGM) system will be developed, manufactured, marketed and distributed in China, Hong Kong, Macau and Taiwan.
The collaboration agreement includes a license arrangement and equity investment in ECTE. Under the licensing, MTIA will bear the development, manufacturing and marketing costs for bringing Symphony CGM System in the Chinese market. MTIA has established sales channels in more than 1,000 hospitals across the China provinces.
The global market for glucose monitoring systems is measured at roughly $10 billion. The glucose monitoring devices include blood glucose meters and test strips which provide single blood glucose values.
Based in Philadelphia, PA, Echo Therapeutics is a medical device company aimed at developing enhanced skin permeation technology Prelude SkinPrep System, and non-invasive, wireless, and glucose monitoring system. ECTE stated that it will apply for market approval of Symphony CGM system in the European Union in the fourth quarter of this year.
ECTE posted a narrower loss of 49 cents per share for the third quarter of the year compared with $1.07 in the comparable quarter of 2012 as well as the Zacks Consensus Estimate of 56 cents. The decrease in loss was attributable to lower shares outstanding at the end of the quarter. Net loss, in fact, increased 22.8% to $5.2 million from $4.3 million a year ago.
Revenues in the quarter slid 27.1% to $22.6 thousand, significantly lower than the operating expenses of $4.95 million. This resulted in operating loss of $4.9 million compared with $3.6 million in the third quarter of 2012.
Echo Therapeutics’ research and development expenses rose 28.8% to $2.8 million from $2.1 million in the third quarter of 2012. The increase was attributable to higher development, regulatory and clinical expenses, as well as manufacturing preparation costs.
Currently, ECTE retains a Zacks Rank #2 (Buy). Other players in the medical instruments industry that are also worth a look include Natus Medical Inc. (NASD:BABY), DexCom, Inc. (NASD:DXCM), and AngioDynamics Inc. (NASD:ANGO). Natus Medical and DexCom carry a Zacks Rank #1 (Strong Buy) while AngioDynamics carries a Zacks Rank #2 (Buy).
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