WALTHAM, Mass.--(BUSINESS WIRE)--NeuroMetrix, Inc. (Nasdaq: NURO), a medical device company advancing patient care through the development and marketing of innovative medical device products that aid physicians in the diagnosis and treatment of diseases of the nervous system and neurovascular disorders and that provide regional anesthesia and pain control, announced today that it is implementing a cost reduction program. Approximately 15% of the Company’s work force will be reduced and this will primarily impact the Company’s direct sales force. The direct sales force will be reduced by nearly 40% from 54 to 34 individuals. Certain headcount reductions have already occurred or will occur in other operating areas. Additional reductions in operating expenses will be implemented within sales, marketing, and other functional areas. These steps are being taken to reduce operating expenses given the decline in the Company’s revenues. This program is expected to be fully implemented in the second quarter of 2008 and we anticipate a reduction in the Company’s operating expenses of approximately $5.0 million on an annualized basis. A charge for severance and benefit costs of approximately $285,000 will be taken in the second quarter of 2008.
Shai Gozani, M.D., Ph.D., President and C.E.O, commented, “These cost reduction measures are being taken to increase operating efficiencies while maintaining a focused direct sales force to support our current customer base, to market our current products, including the NC-stat System and the DigiScope, and to support the launch of the ADVANCETM System.”
Dr Gozani continued, “While we are appropriately realigning our cost structure given the decline in revenues we have experienced, we will maintain our investments in product development, including improvements to our existing products, the development of new electrodes, and the development of our NAVIGATORTM System for regional anesthesia, pain control and the treatment of neuropathies such as carpal tunnel syndrome. We are proactively addressing the challenges our business is facing. At the same time, we remain committed to meeting our customers’ needs and investing in our future. We believe that this strategy will best serve our physician customers, their patients, our employees, and our shareholders.”
“We greatly appreciate the contributions to NeuroMetrix of those employees who are being adversely affected by this cost reduction program. We are implementing these changes for the overall health of the Company, but at the same time recognize the personal impact associated with this decision.”
About NeuroMetrix
NeuroMetrix is a science based medical device company advancing patient care through the development and marketing of innovative medical device products that aid physicians in the diagnosis and treatment of diseases of the nervous system and neurovascular disorders, and that provide regional anesthesia and pain control. To date, our focus has been on the assessment of neuropathies and neurovascular disorders. Neuropathies affect the peripheral nerves and parts of the spine and are frequently caused by or associated with carpal tunnel syndrome, diabetes, and low back and leg pain, as well as other clinical disorders. The NC-stat System, NeuroMetrix’s initial neuropathy evaluation system, has been on the market since May 1999 and is used in over 5,500 physician’s offices and clinics in the United States for performance of nerve conduction studies. The ADVANCE™ System, recently cleared by the FDA for marketing in the U.S., is a system for the performance of traditional nerve conduction studies and invasive electromyography procedures.
Diabetic retinopathy is a common neurovascular complication of diabetes and the leading cause of blindness among working age adults. Through the acquisition of EyeTel Imaging, NeuroMetrix markets the DigiScope™, which is a retinal imaging system designed for use at the point-of-care in physician offices and vision clinics.
Our product pipeline includes the NAVIGATOR™ System, a device designed to precisely deliver pharmacologic agents such as anesthetics and corticosteroids in close proximity to nerves (“perineurally”) for regional anesthesia, pain control and the treatment of focal neuropathies such as carpal tunnel syndrome. We are also developing a neurostimulation based product that promotes nerve fiber regeneration for the treatment of acute nerve injuries such as due to lacerations and other forms of trauma.
The statements contained in this press release include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, statements regarding the Company’s or its management’s expectations, hopes, beliefs, intentions or strategies regarding the future. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “plan,” “hope” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements contained in this press release are based on the Company’s current expectations and beliefs concerning future developments and their potential effects on it. There can be no assurance that future developments affecting the Company will be those that the Company has anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the Company’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the Company’s failure to realize the anticipated cost reductions from its cost reduction program as a result of future changes in the Company’s business, unanticipated increases in costs resulting from realignment of employee responsibilities, the Company’s continued ability to attract and retain well-qualified sales and other personnel and other unanticipated costs relating to the cost reduction program and other factors described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007 and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should any of the Company’s assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Contacts
NeuroMetrix, Inc. Bradford Smith, 781-314-2741 Chief Financial Officer neurometrix.ir@neurometrix.com
