Echo Therapeutics, Inc. (ECTE) posted a narrower loss of 31 cents per share for the second quarter of the year compared with 51 cents in the comparable quarter of 2013 but lagged the Zacks Consensus Estimate of a loss of 22 cents.
However, net loss increased 12.6% to $3.8 million from $3.3 million in the second quarter of 2013. The decrease in loss per share was attributable to lower shares outstanding at the end of the quarter (nearly halved).
Revenues in the quarter slid 15.3% to $19,107 from $22,557 in the 2013-second quarter. Operating loss narrowed down 35.8% to $3.9 million from $6.1 million a year ago. Thanks to the cost reduction measures that were successfully implemented in September last year and resulted in a 36% decline in operating expenses in the quarter under review.
Cost Reduction Measures
Echo Therapeutics’ cost reductions included workforce reductions and decrease in general and administrative expenses, as well as manufacturing, clinical and product development expenditures.
Due to these cost-reduction measures, (involving a 35% employee reduction), the monthly burn rate is projected to fall 40–50% as compared to the average monthly burn rate recorded in the first half of 2014.
Research and development expenses slashed 56.5% to $1.7 million from $4.0 million in the prior year quarter. The decrease is attributable to lower development and clinical expenses.
However, selling, general and administrative expenses rose 4.2% to $2.2 million for the 2014-second quarter from $2.1 million in the 2013-quarter. The decline in general and administrative expenses were offset by unanticipated expenses that included costs associated with the proxy contest and annual shareholder meeting and legal expenses.
Echo Therapeutics had cash and cash equivalents of $4.1 million as of Jun 30, 2014, down 49.0% from $8.1 million as of Dec 31, 2013. Deferred revenues from licensing agreements decreased 25.0% to $114,642 from $152,856 as of Dec 31, 2013.
Headquartered 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 known as Symphony CGM System.
Currently, Echo Therapeutics retains a Zacks Rank #3 (Hold). Some better-ranked stocks in the medical instruments industry include Alphatec Holdings, Inc. (ATEC), RTI Surgical Inc. (RTIX), and Hologic Inc. (HOLX). Alphatec Holdings and RTI Surgical sport a Zacks Rank #1 (Strong Buy), while Hologic carries a Zacks Rank #2 (Buy).