NeuroMetrix's New Strategy

Nerve testing devices maker, NeuroMetrix (NURO - Snapshot Report) recently modified its operational focus in favor of diabetes, in particular the diagnosis and monitoring of diabetic neuropathy. In addition, NeuroMetrix will maintain its ongoing sustenance for its neurodiagnostic business. 

According to the company, diabetes is the most significant opportunity for its in-house knowledge. Globally, there is a growing effort to combat the increased incidence of type II diabetes. Neuropathy is a serious complication arising from diabetes, which may cause ulcers in the foot thereby requiring amputation of the limb. The company plans to launch the NC-stat-SL, around June-July 2011, which is designed to measure diabetic neuropathy at the point-of-care.     

In addition, NeuroMetrix elaborated on its goals for its neurodiagnostic segment, which has languished in recent times due to reimbursement policies. The company’s main interest will be in preserving product support for its live installed base of almost 3,900 medical practitioners.  It plans to shift these accounts to its ADVANCE technology, which accounts for about a quarter of the tests performed utilizing the company’s technology. Furthermore, NeuroMetrix will discontinue its general use NC-stat device after 2011.  

NeuroMetrix upholds that a sales channel using the variable cost model is preferable during the transition phase. Consequently, it will dismantle its direct sales force and acquire new clients through third party distribution. The company stated that its international operations, which utilize the ADVANCE know-how and deal via a network of independent distributors, will not be affected by the planned organizational changes.   

NeuroMetrix provided preliminary financial results for the year ended December 31, 2010. Total revenues were $3 million and $13.9 million in the fourth quarter and fiscal year, respectively. Its cash balance declined by roughly $1.9 million during the quarter to around $17 million at year end. NeuroMetrix competes with Medtronic (MDT - Analyst Report) among others.

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