NeuroMetrix Beats, Losses Trim

Zacks

Nerve testing devices maker NeuroMetrix (NURO) reported fourth-quarter fiscal 2011 net loss per share of 63 cents, well below the Zacks Consensus Estimate of a loss of 75 cents and the year-ago loss of $1.09 a share. The Massachusetts-based company’s net loss trimmed 42.5% year over year to $2.4 million as lower costs more than offset a decline in sales.

For fiscal 2011, net loss per share of $2.59 was also lower than the Zacks Consensus Estimate of a loss of $2.72 and the year-ago loss of $4.40. Losses narrowed 41% year over year to roughly $10 million.

Revenues tumbled 23% year over year to $2.4 million in the fourth quarter, but were ahead of the Zacks Consensus Estimate of $2 million. For the full year, revenues of $10.4 million (down 25% year over year) squeaked past the Zacks Consensus Estimate of $10 million.

Gross margin in the fourth quarter climbed to 49% from just 2% a year ago. Operating expenses dipped 21% year over year to roughly $3.6 million as the company spent less on R&D and sales and marketing expenses. NeuroMetrix exited fiscal 2011 with cash and cash equivalents of roughly $10.3 million, down 39% year over year.

NeuroMetrix makes devices that help physicians detect and treat diseases and peripheral nerve injuries, and offer regional anesthesia and pain control. The company’s principal products are ADVANCE and NC-stat devices for nerve conduction study (“NCS”). NeuroMetrix competes with Medtronic (MDT) among others.

The company unveiled the new NC-stat DPNCheck test at the annual conference of the American Diabetes Association (“ADA”) in San Diego, California, in July 2011. Commercial shipment of the product began in September 2011. NeuroMetrix has already booked 131 orders for the device, of which 119 were shipped in the fourth quarter.

NeuroMetrix, in its fourth quarter call, announced its next pipeline product dubbed SENSUS, a therapeutic device geared to manage chronic intractable pain. It is a wearable, non-invasive nerve stimulator designed to address symptomatic pain in the feet and lower legs. NeuroMetrix plans to submit a 510(k) for the device in second-quarter 2012 with a commercial launch in the U.S. targeted in late 2012.

NeuroMetrix, in February 2012, closed an $8.5 million public offering of common stock and warrants. The company plans to use a part of the net proceeds (of roughly $7.5 million) from this offering on the commercialization of NC-stat DPNCheck and development of SENSUS and other pipeline products.

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