NeuroMetrix Inc. (NSDQ:NURO) cut its third-quarter losses by 62 percent, but the nerve testing equipment maker also saw Q3 sales drop significantly.
The Waltham, Mass.-based firm recorded 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.
The company said the Jan. 1, 2010 change in Medicare reimbursement for "nerve conduction studies using pre-configured electrodes," like those used with its NC-stat nerve testing devices, contributed to the top-line decline. Electrode pricing dropped 23 percent and the number of electrodes used per patient study dropped 35 percent in year-over-year comparisons, according to the company.
NeuroMetrix was able to cut its operating expenses by more than $800,000, most of that coming from a drop of almost $500,000 in general and administrative expenses. CEO Dr. Shai Gozani said the company is implementing the strategy it mapped out after its tough second quarter, when the company laid off 25 workers, reorganized its sales force and tabled the development of its Ascend anesthesia device. The company said cash used in operations during Q3 was reduced to $2.7 million, an improvement" of $1.6 million, or 37 percent, from the preceding quarter.
Gozani said the company is streamlining its product offering, "shifting to a hybrid direct/distribution sales model combining a core of direct plus independent sales representatives" that only sell the company’s Advance NCS/EMG devices. The company now has coverage for the devices in 70 percent of physician offices and 50 percent of specialty territories in the U.S. market and its clinical support staff is close to fully staffed, he said.
NeuroMetrix also re-focused R&D resources on supporting the Advance NCS/EMG platform and it is converting the NC-stat device into "a rapid, low cost point-of-care test for diabetic peripheral neuropathy," Gozani said in prepared remarks.
NeuroMetrix, which has been losing money several consecutive quarters, received a de-listing warning from the NASDAQ stock exchange in September if it can’t get its stock price back above $1 per share.
Two weeks ago, Deerfield Management and general partner James Flynn sold off another chunk of the company, paring their stake by 64 percent.
The company’s shares were trading at 52 cents in moring trading, down about 1.9 percent for the day.