Echo Therapeutics, Inc. (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.
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.
Selling, general and administrative expenses grew 45.4% to $2.2 million compared with $1.5 million for the third quarter of 2012. The increase was driven by pre-launch marketing and manufacturing activities.
Echo Therapeutics had cash and cash equivalents of $6.1 million as of Sep 30, 2013, up from $3.7 million as of Dec 31, 2012. Deferred revenues, notes payable and capital lease obligations decreased to $112.8 thousand from $302.7 thousand as of Dec 31, 2012.
ECTE implemented a cost reduction measures at the end of the third quarter, mainly marketing and manufacturing expenditures, and corporate general and administrative costs. Due to these measures, burn rate is expected to fall by 35-40% in the upcoming fourth quarter from the quarterly burn rate experienced during the first three quarters of the year.
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, ECTE retains a Zacks Rank #2 (Buy). Other preferable stocks from the medical instruments industry include Cynosure, Inc. (CYNO), CryoLife, Inc. (CRY) and Natus Medical Inc. (BABY). All of them carry a Zacks Rank #1 (Strong Buy).
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