Deerfield Management and general partner James Flynn continued to pare their stakes in NeuroMetrix Inc. (NSDQ:NURO).
The latest sell-off of nearly 332,000 shares, for an average of less than 51 cents, generated $169,000 for Flynn and the hedge fund, leaving a mere 782,000 NURO shares in their hands, according to regulatory filings.
Flynn and Deerfield have sold large portions of NURO stock for the since at least September months. Back in June, when NURO stock was worth $1.91 per share, Deerfield and Flynn together owned just more than 1.8 million shares, according to a federal Securities & Exchange filing. Shares peaked at $3.30 in September 2009, right after Deerfield boosted its stake in NeuroMetrix with a 2.5-million-share, $5 million buy (for $2 per share) during a NeuroMetrix private placement that month. That stake was worth about 19.9 percent of NeuroMetrix.
But the stock has declined steadily since then, prompting Flynn and his fund to ditch nearly 2 million shares since August, for $1.3 million (an average of 63 cents per share), according to regulatory filings. In their latest trade Dec. 14, Flynn and Deerfield sold a collective 332,000 shares, taking a haircut of about $1.49 per share (adding insult to injury, those shares were once worth nearly $1.1 million).
NeuroMetrix has struggled to regain its footing after the Centers for Medicare and Medicaid changed the reimbursement code for nerve conduction studies last year, causing a 22 percent reduction in the average selling price for the electrodes used with its equipment and a 25 percent reduction in the number of electrodes sold during the second quarter. Sales of consumables like the electrodes accounted for 87 percent of total revenues during that quarter.
The poor Q2 results prompted NeuroMetrix to lay off 25 workers — a quarter of its workforce — during the period and make other restructuring moves aimed at saving about $2.5 million a year. In September, the NASDAQ stock market warned NeuroMetrix that it risked a de-listing if it didn’t get its stock back above the exchange’s $1 per share minimum for 10 days.
NeuroMetrix posted a loss of $3.4 million, or 15 cents per diluted share, on sales of $3.4 million during the three months ended Sept. 30. That beat a loss of $9.3 million, or 57 cents per diluted share, on higher sales of $6.3 million during the same period last year.
NURO shares were trading at 53 cents in mid-morning activity today, down 5.2 percent.