Dec 28 2007
NeuroMetrix, Inc., a medical device company advancing patient care through the development and marketing of innovative products used to diagnose and treat diseases of the nervous system, neurovascular disorders, and pain, announced today that it has acquired substantially all of the assets of EyeTel Imaging, Inc. and has assumed certain specified liabilities in connection with the acquisition.
The purchase price consisted of 1,050,295 newly issued shares of common stock of NeuroMetrix, with a value of approximately $9.9 million as of the closing of the acquisition, and $175,000 in cash. NeuroMetrix originally obtained an exclusive license to commercialize EyeTel's DigiScope(R) throughout the physician office market in October 2006 and has been marketing the product since early 2007. With this acquisition, NeuroMetrix will own all EyeTel intellectual property, including an exclusive worldwide license with Johns Hopkins University, for the DigiScope.
Furthermore, the acquisition secures all commercialization rights to the DigiScope which includes both the physician office market and an expanded opportunity in the eye specialist market, comprised primarily of vision centers supervised by optometrists. It is anticipated that the acquisition of EyeTel will provide an opportunity to significantly improve the gross margins realized by NeuroMetrix on sales of the DigiScope.
The DigiScope is based on patented technology developed at the Wilmer Eye Institute of Johns Hopkins University and commercialized under an exclusive licensing agreement with Johns Hopkins University. The DigiScope is an FDA 510(k) cleared diagnostic device that physicians and optometrists can use for the early detection of diabetic retinopathy and other eye diseases.
DigiScope operations will continue to be run primarily out of the EyeTel facility and reading center located in Columbia, Maryland. Approximately twenty EyeTel employees and consultants will transition to NeuroMetrix. It is estimated by the American Diabetes Association ("ADA") that 21 million people in the United States have diabetes. Diabetic retinopathy, a major complication of diabetes, is a silent, progressive and debilitating condition which is the leading cause of blindness among working-age Americans.
Virtually all patients with diabetes will develop some level of diabetic retinopathy during the course of their lives. Fortunately, blindness due to diabetic retinopathy can be prevented in the vast majority of patients through early diagnosis by annual dilated eye examinations and appropriate interventions such as laser procedures. For this reason, the ADA recommends that patients with diabetes receive annual dilated eye exams. Despite this recommendation, less than 50% of patients with diabetes have the recommended annual eye exams.
The DigiScope addresses this clinical problem by providing physicians and optometrists with gold standard technology at the point of care. The DigiScope may also be useful in the evaluation of other common retinal and optic nerve disorders, such as age related macular degeneration and glaucoma.
Shai N. Gozani, M.D., Ph.D., NeuroMetrix President and Chief Executive Officer, commented: "We believe that the acquisition of EyeTel is consistent with the long-term vision of our Company. The DigiScope represents an important diagnostic tool for physicians and optometrists in that it enables them to increase compliance with annual eye exams among patients with diabetes.
This effort to detect diabetic retinopathy in physician offices and vision centers addresses a critical need among patients with diabetes and has the potential to help reduce diabetes related blindness through earlier detection." Dr. Gozani continued: "We have been marketing the DigiScope for nearly a year and believe that this product represents a very good fit with our neurotechnology oriented clinical mission and within our product development and sales and marketing organizations. A strong and impressive foundation has been built by the dedicated EyeTel employees.
With their leadership, we expect to advance the DigiScope platform from a technical and scientific perspective, and to expand its market presence. We believe that office based assessments of retinal and optic nerve pathology represent a significant market opportunity."
Gary L. Gregory, NeuroMetrix Chief Operating Officer, added: "In addition to our existing efforts in the physician office arena, we look to bring the DigiScope platform to the optometry, or eye specialist, arena. This represents an additional market of approximately 20,000 practices which is well aligned to our present business, marketing and sales approach. This will allow NeuroMetrix to deliver this advanced technology to an even broader market - while capitalizing upon our proven, existing marketing and sales organization."
Kevin Quinn, founder and Vice President of Business Development at EyeTel stated: "We are very excited to be joining forces with NeuroMetrix in our effort to further penetrate and expand the market for the DigiScope. We entered into our initial partnership with NeuroMetrix as a result of their strong presence in the physician office market and we are pleased with the progress to date.
The NeuroMetrix team has proven that it can successfully commercialize medical device products through its highly capable team, including its sales force. I personally look forward to carrying out the mission of helping physicians and optometrists preserve the vision of their patients as we combine our strengths with those of NeuroMetrix."
The DigiScope is specifically designed for ease of use by primary diabetes care physicians and optometrists. It has been shown to be equivalent to 7-field stereo color fundus photography, the current gold standard for detection of diabetic retinopathy. The DigiScope works by capturing digital images of a patient's retina through a dilated pupil and sending images via the internet to the EyeTel Reading Center. The Reading Center then processes the images and sends the results back to the physician within 2 business days. Those patients identified as having diabetic retinopathy are then referred to an ophthalmologist for appropriate care.