Echo Therapeutics Retains PricewaterhouseCoopers LLP In Attempt To Stay Alive

October 3, 2014

By Riley McDermid, BioSpace.com Breaking News Staff

Echo Therapeutics announced Thursday that is has has retained PricewaterhouseCoopers LLP's Restructuring and Recovery Services Practice (PwC) to help it find a way to help it stay in business after announcing last week it had suspended operations.

The company said last week that it in able to “conserve its liquidity and capital resources” it had suspended its product development, research, manufacturing and clinical programs and operations, and that its cash on hand was insufficient to fund its needs beyond Sept. 30.

The retention of PWC is a sign the Philadelphia medical-device company may be attempting to stay a going concern, which is good news for its nearly four dozen employees.

Echo said such financial and strategic alternatives could include, but are not limited to, a sale of intellectual property and other assets, a merger, other business combination, a capital transaction and/or a voluntary petition for reorganization or liquidation pursuant to the U.S. Bankruptcy Code.

The company has been grappling with its its lead investor, activist investment firm Platinum Management, which has been pressing the firm to remove its “legacy” board members. Echo has even notified Platinum it will be returning its $5 million investment in the company under a clause in the terms of its December 2010 securities purchase agreement.

Echo has been attempting to develop a wireless and needle-free continuous glucose monitoring system called Symphony.

Echo’s Interim Chief Financial Officer Charles Bernhardt said last week that the company “deeply” regretted the decision to suspend operations.

“We do not have the financial resources to support our continued operations,” said Bernhardt, in a statement at the time.

“Reducing our workforce of dedicated employees and ceasing active development of Symphony are among the most difficult decisions we have made,” he said. “Our directors and management team have devoted substantial time and effort to identifying and reviewing potential opportunities to provide funding for Echo’s operations; however, that process did not yield a credible and sufficient financing transaction.”