Echo Therapeutics, Inc. (ECTE) posted narrower loss per share of 36 cents in the fourth quarter of 2013 compared with 48 cents in the comparable quarter of 2012, despite a significant 100.9% rise in net loss to $3.9 million from $1.9 million incurred a year ago mainly due to more than a twofold rise in average shares outstanding. Nevertheless, loss per share was in line with the Zacks Consensus Estimate.
ECTE's net loss for full year 2013 was $19.4 million or $2.33 per share, up 57.6% from the net loss of $12.3 million but down 25.3% from $3.12 per share in 2012.
Excluding deemed dividend on beneficial conversion feature of convertible preferred stock, net loss for the reported quarter and year was $3.5 million or 33 cents per share and $19.1 million or $2.28 per share, respectively.
Following the earnings release, shares of ECTE slipped 1.3% to close at $3.08 till the last reported session due to the continued rise in net loss every quarter.
Total revenue in the quarter amounted to negative $40.1 thousand, an improvement of 54.3% from the year-ago quarter level. For the full year, total revenue more than quadrupled to $27.6 thousand from $5.1 thousand in 2012.
For the fourth quarter of 2013, operating expenses fell 33.2% to $3.1 million; research and development (R&D) expenses dropped 55.6% to $1.3 million and selling, general and administrative (SG&A) expenses slid 6.1% to $1.8 million.
The decline in expenses was attributable to substantial cost reduction measures implemented by the company across all operational activities at the end of the 2013-third quarter. As a result, operating losses declined 33.6% to $3.1 million from $4.7 million in the fourth quarter of 2012.
For the entire year, R&D expenses increased 30.3% to $11.3 million primarily due to increased engineering and design expenses incurred on outside contractors and personnel related to its Symphony CGM System development. Likewise, SG&A expenses rose 31.2% to $8.4 million mainly due to increased personnel costs, legal costs and expenses associated with pre-launch marketing and manufacturing activities.
Due to higher R&D and SG&A expenses, operating loss for the year rose 30.6% to $19.6 million from $15.0 million in 2012.
ECTE had cash and cash equivalents of $8.1 million as of Dec 31, 2013, up 115.0% from $3.7 million as of Dec 31, 2012. Deferred revenues decreased to $152.9 thousand at the end of 2013 from $302.7 thousand as of Dec 31, 2012. The decline has led to the improvement in revenue for the reported quarter and year.
Currently, ECTE carries a Zacks Rank #3 (Hold). Other preferable stocks from the medical instruments industry include Cynosure, Inc. (CYNO), Syneron Medical Ltd. (ELOS) and ABIOMED, Inc. (ABMD). While Cynosure and Syneron sport a Zacks Rank #1 (Strong Buy), ABIOMED holds a Zacks Rank #2 (Buy).
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