Investor Relations (IR) Questions: Echo Therapeutics $ECTE
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Information as of: May 2013
GENERAL INFORMATION:
-d- The Company is developing a needle free continuous glucose meter. The Company's Prelude SkinPrep System safely removes the outermost layer of skin, prepping it for the application of the Company's Symphony CGM System which continuously reads the patients glucose levels. Other glucose meters on the market are more invasive and only achieve intermittent sporadic monitoring. The Company believes that while this has been very profitable for other companies, it has not been very beneficial for patients. The Company believes that it has a marketable product that better serves the patient and reduces the amount of time and money hospitals spend monitoring glucose levels with products currently available.
-1- When is the last time ECTE raised cash through an offering (diluted)?
-a- On January 31, 2013 the Company announced that it had agreed to sell 13,333,333 shares at .75 a share. Underwriters were given a 45 day option to purchase an additional 2,000,000 shares to cover over-allotments. The Company estimated that it would raise about $10,000,000 prior to deducting fees.
-b- On February 6, 2013 the Company announced that that the offering priced on January 31, 2013 had closed. The full over-allotment option was exercised by the underwriters and gross proceeds prior to deducting fees totaled $11.76 million.
-2- How much cash (not cash equivalents) does ECTE have?
-c- On March 31, 2013 the Company reported cash and cash equivalents at $5,170,251.
-3- What and approximately when is the next known catalyst?
Upcoming Catalysts in Europe:
-d- Initiation of CE Mark trial (European trial). No specific start date was given. However, according to the Company's CEO, Patrick T. Mooney, MD, the trial is expected to begin very shortly and is not expected to take very long.
-d- The Company expects that upon completion of the CE Mark Trial, it will file for European approval (CE Mark Technical File). At that point there is typically a 90 day review window. According to the Company's CEO, the product could theoretically be approved in the third or fourth quarter of 2013. The company would then plan a product launch in Europe.
Upcoming Catalysts in the United States:
-d- Either later this quarter or in the summer, the company plans to meet with the FDA. The company plans to submit a Pre-Submission. Afterward, the Company will schedule a teleconference or a face to face with the FDA.
-d- Shortly after the European clinical trial concludes and the Company applies for European approval, the Company anticipates initiating the US study. The anticipated steps to follow are to file for US approval, gain US approval, and a product launch in 2014.
Additional Potential Catalyst:
-d- According the the Company's CEO, “... there will be and there has been and there will continue to be an uptick in interest in potential partners...”
-4- What is ECTE's quarterly cash burn?
-e- For the three months ending 03/31/2013, total operating expenses were $5,519,170. For the same period in 2011, total operating expenses were $3,251,049.
-f- Total Operating Expenses (by year)
2012.............$15,045,139
2011.............$ 8,701,884
2010.............$ 5,338,914
-5- Does ECTE have an existing line of credit and if so how much can they draw against it?
-g- On August 31, 2012 the Company entered into a Loan Agreement with Platinum-Montaur Life Sciences. Under the terms of the Loan Agreement, the Company received $5,000,000. If certain clinical and regulatory milestones are met, the Company will be able to draw up to a maximum of $20,000,000 from the Loan Agreement.
-g- LOAN TERMS: Maturity Date: 5 years from closing date. Interest Rate: 10%
-g- Payments: “The Company is required to make interest payments on the principal amount due in connection with each draw on the first business day of each month until the Maturity Date.”
-g- “The Company is required to make interest payments on the principal amount due in connection with each draw on the first business day of each month until the Maturity Date. The Company is also required to make a mandatory prepayment on each interest payment date of an amount equal to one-third of its total revenue for the then prior fiscal quarter, up to the maximum amount outstanding under the Note at that time. The Company is not, however, required to make such interest payment or mandatory prepayment if doing so would reduce the Company’s cash and cash equivalents to less than $5,000,000.”
Additional points of interest:
-h- Stock holders approved an amendment allowing the company to effect a reverse split any time before December 31, 2013. It effected, the reverse split cannot be less than 1-for-2 and not more than 1-for-10.
A complete archive of this and additional #IRQ research and IR responses can be found athttp://www.biotechduediligence.com/ir-questions.html.
RESOURCES:
-a- ECTE PR 01/31/2013 http://www.echotx.com/press-releases.shtml?id=108
-b- ECTE PR 02/06/2013 http://www.echotx.com/press-releases.shtml?id=109
-c- Page 1, ECTE 10-Q 05/13/2013 http://ecte.ir.edgar-online.com/fetchFilingFrameset.aspx?FilingID=9285573&HTML
-d- ECTE Presentation 05/23/2013 http://discovervideo.com/events/echo/20130522/
-e- Page 2, ECTE 10-Q 05/13/2013 http://ecte.ir.edgar-online.com/fetchFilingFrameset.aspx?FilingID=9285573&HTML
-f- Page 29, ECTE 10-K 03/18/13 http://ecte.ir.edgar-online.com/fetchFilingFrameset.aspx?FilingID=9167619&HTML
-g- Page 12, ECTE 10-Q 05/13/2013 http://ecte.ir.edgar-online.com/fetchFilingFrameset.aspx?FilingID=9285573&HTML
-h- ECTE PR 05/23/2013 http://www.echotx.com/press-releases.shtml?id=117
GENERAL INFORMATION:
-d- The Company is developing a needle free continuous glucose meter. The Company's Prelude SkinPrep System safely removes the outermost layer of skin, prepping it for the application of the Company's Symphony CGM System which continuously reads the patients glucose levels. Other glucose meters on the market are more invasive and only achieve intermittent sporadic monitoring. The Company believes that while this has been very profitable for other companies, it has not been very beneficial for patients. The Company believes that it has a marketable product that better serves the patient and reduces the amount of time and money hospitals spend monitoring glucose levels with products currently available.
-1- When is the last time ECTE raised cash through an offering (diluted)?
-a- On January 31, 2013 the Company announced that it had agreed to sell 13,333,333 shares at .75 a share. Underwriters were given a 45 day option to purchase an additional 2,000,000 shares to cover over-allotments. The Company estimated that it would raise about $10,000,000 prior to deducting fees.
-b- On February 6, 2013 the Company announced that that the offering priced on January 31, 2013 had closed. The full over-allotment option was exercised by the underwriters and gross proceeds prior to deducting fees totaled $11.76 million.
-2- How much cash (not cash equivalents) does ECTE have?
-c- On March 31, 2013 the Company reported cash and cash equivalents at $5,170,251.
-3- What and approximately when is the next known catalyst?
Upcoming Catalysts in Europe:
-d- Initiation of CE Mark trial (European trial). No specific start date was given. However, according to the Company's CEO, Patrick T. Mooney, MD, the trial is expected to begin very shortly and is not expected to take very long.
-d- The Company expects that upon completion of the CE Mark Trial, it will file for European approval (CE Mark Technical File). At that point there is typically a 90 day review window. According to the Company's CEO, the product could theoretically be approved in the third or fourth quarter of 2013. The company would then plan a product launch in Europe.
Upcoming Catalysts in the United States:
-d- Either later this quarter or in the summer, the company plans to meet with the FDA. The company plans to submit a Pre-Submission. Afterward, the Company will schedule a teleconference or a face to face with the FDA.
-d- Shortly after the European clinical trial concludes and the Company applies for European approval, the Company anticipates initiating the US study. The anticipated steps to follow are to file for US approval, gain US approval, and a product launch in 2014.
Additional Potential Catalyst:
-d- According the the Company's CEO, “... there will be and there has been and there will continue to be an uptick in interest in potential partners...”
-4- What is ECTE's quarterly cash burn?
-e- For the three months ending 03/31/2013, total operating expenses were $5,519,170. For the same period in 2011, total operating expenses were $3,251,049.
-f- Total Operating Expenses (by year)
2012.............$15,045,139
2011.............$ 8,701,884
2010.............$ 5,338,914
-5- Does ECTE have an existing line of credit and if so how much can they draw against it?
-g- On August 31, 2012 the Company entered into a Loan Agreement with Platinum-Montaur Life Sciences. Under the terms of the Loan Agreement, the Company received $5,000,000. If certain clinical and regulatory milestones are met, the Company will be able to draw up to a maximum of $20,000,000 from the Loan Agreement.
-g- LOAN TERMS: Maturity Date: 5 years from closing date. Interest Rate: 10%
-g- Payments: “The Company is required to make interest payments on the principal amount due in connection with each draw on the first business day of each month until the Maturity Date.”
-g- “The Company is required to make interest payments on the principal amount due in connection with each draw on the first business day of each month until the Maturity Date. The Company is also required to make a mandatory prepayment on each interest payment date of an amount equal to one-third of its total revenue for the then prior fiscal quarter, up to the maximum amount outstanding under the Note at that time. The Company is not, however, required to make such interest payment or mandatory prepayment if doing so would reduce the Company’s cash and cash equivalents to less than $5,000,000.”
Additional points of interest:
-h- Stock holders approved an amendment allowing the company to effect a reverse split any time before December 31, 2013. It effected, the reverse split cannot be less than 1-for-2 and not more than 1-for-10.
A complete archive of this and additional #IRQ research and IR responses can be found athttp://www.biotechduediligence.com/ir-questions.html.
RESOURCES:
-a- ECTE PR 01/31/2013 http://www.echotx.com/press-releases.shtml?id=108
-b- ECTE PR 02/06/2013 http://www.echotx.com/press-releases.shtml?id=109
-c- Page 1, ECTE 10-Q 05/13/2013 http://ecte.ir.edgar-online.com/fetchFilingFrameset.aspx?FilingID=9285573&HTML
-d- ECTE Presentation 05/23/2013 http://discovervideo.com/events/echo/20130522/
-e- Page 2, ECTE 10-Q 05/13/2013 http://ecte.ir.edgar-online.com/fetchFilingFrameset.aspx?FilingID=9285573&HTML
-f- Page 29, ECTE 10-K 03/18/13 http://ecte.ir.edgar-online.com/fetchFilingFrameset.aspx?FilingID=9167619&HTML
-g- Page 12, ECTE 10-Q 05/13/2013 http://ecte.ir.edgar-online.com/fetchFilingFrameset.aspx?FilingID=9285573&HTML
-h- ECTE PR 05/23/2013 http://www.echotx.com/press-releases.shtml?id=117