Transdermal medical device company Echo Therapeutics Inc. is all set to graduate from Over-the-Counter status to the NASDAQ Capital Market today. The company will trade under the ticker symbol "ECTE."
The Philadelphia, Pennsylvania-based Echo has an expertise in advanced skin permeation technology. The most-advanced product in the company's medical device pipeline is Prelude SkinPrep System designed for enhanced skin permeation that will enable both needle-free drug delivery and *analyte extraction ( *removing a chemical or biological substance from the body for analysis).
Prelude is being developed by Echo in partnership with Ferndale Pharma Group Inc., under a license agreement signed in May 2009. As per the terms of the agreement, Ferndale has a license in North America and the United Kingdom to develop, assemble, use, market, sell and export Prelude. In November 2010, Echo filed 510(k) submission seeking market clearance from the FDA for its Prelude SkinPrep System and 4% lidocaine cream.
In a clinical trial, Prelude SkinPrep System has been successful in ablating the skin prior to the application of OTC 4% lidocaine cream for faster-acting local dermal anesthesia. If things pan out the way as expected, the company expects securing additional strategic partner licensing arrangements and the planned launch of Prelude to happen in the second half of 2011. Upon FDA clearance of Prelude, Echo will receive a $750,000 milestone payment and a double digit royalty on product sales from Ferndale.
According to Echo, the use of Prelude for local dermal anesthesia represents the best near-term revenue opportunity for it. The topical anesthetic market is said to exceed $200 million annually, and the company expects Prelude, with demonstrably faster activity, has the potential to grow it significantly. Prelude SkinPrep System is also believed to have a wide range of therapeutic applications.
Echo believes that 2011 will be a transformative year as it expects Prelude to receive market clearance and to generate revenues in the third quarter of 2011.
Another product under development is Symphony tCGM System, a non-invasive, wireless, transdermal continuous glucose monitoring system for use in hospital critical care units and for patients with diabetes. A new design of the Symphony system is currently undergoing its final functionality testing and the company expects the updated version to be ready for demonstration in the very near-term after which it will be tested in a final series of clinical trials shortly thereafter.
Echo inked a license agreement with Handok Pharmaceuticals Co., Ltd. in June 2009, pursuant to which Handok was granted a license to develop, use, market, sell and import Symphony for continuous glucose monitoring for use by medical facilities and/or individual consumers in South Korea.
According to Echo, the addressable market for needle-free, continuous wireless glucose monitoring in the hospital critical care setting exceeds $1 billion annually and the global glucose monitoring market exceeds $12 billion annually.
In addition to the medical device pipeline, the company also has a specialty pharmaceuticals pipeline, based on its proprietary AzoneTS transdermal drug reformulation technology, which enhances nontoxic, nonirritating skin penetration of FDA-approved topical medications. Durhalieve is the most advanced drug candidate in the company's specialty pharmaceuticals pipeline for treatment of corticosteroid-responsive dermatoses. The product candidate has successfully completed phase III studies and the company is working to satisfy the FDA's remaining manufacturing and clinical study requirements necessary to secure approval of Durhalieve.
A quick look at the company's balance sheet...
The company has generated limited revenue, primarily from licensing agreements, and has had operating losses since inception. As of March 31, 2011, Echo had an accumulated deficit of approximately $76 million and cash and cash equivalents of $5 million.
The company has currently 34.02 million shares outstanding, and insiders own approximately 26.23% of the outstanding shares. (Data sourced from Yahoo Finance).
Shares of Echo Therapeutics, which have a 52-week range of $0.85 to $4.98, closed Tuesday's trading at $4.54, gaining 10.46%.
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