Healthcare Industry News: Neurotech
News Release - November 14, 2007
NeuroMetrix Announces Strategic Alliance with Cyberkinetics
Investment of $2.5 Million and Agreement to Form Joint Venture to Develop Peripheral Nerve Injury ProductWALTHAM, Mass.--(HSMN NewsFeed)--NeuroMetrix, Inc. (Nasdaq: NURO ), 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 formed a strategic alliance with Cyberkinetics Neurotechnology Systems, Inc. (OTCBB:CYKN; Cyberkinetics). Cyberkinetics is a medical device company focused on the development of products for spinal cord injuries, neurological disorders and other conditions of the nervous system, including the Andara™ Oscillating Field Stimulator (OFS™) device for which Cyberkinetics has filed a Humanitarian Device Exemption application (HDE) with the FDA. As part of this strategic relationship, NeuroMetrix has made an investment of $2.5 million in Cyberkinetics common stock and the parties have agreed to negotiate a joint venture to develop and commercialize a therapeutic product for peripheral nerve injury based on the Andara OFS neurostimulation technology platform.
NeuroMetrix’ long term core mission is to develop and market products in three clinical areas related to the nervous system. The first is diagnosis and monitoring of neurological and neurovascular dysfunction. The second is the delivery of anesthetic and therapeutic agents to peripheral nerves and the spine. And the third, which we are launching through this strategic alliance, is neurostimulation to promote neural repair and regeneration. These areas have a common scientific theme which is the integration of nervous system stimulation, measurement, analysis and neuromodulation.
The primary goal of this relationship for NeuroMetrix is to broaden the company’s potential pipeline of products and further expand into the neurostimulation arena. NeuroMetrix has successfully commercialized a widely deployed neurodiagnostic product, the NC-stat® System, which has been used to test over 1 million patients by over 16,000 physicians. NeuroMetrix has additional products in development for the diagnosis, monitoring and treatment of nervous system diseases and pain, including the ADVANCE™ System for the diagnosis of neuropathies and a nerve localization system for the treatment of neuropathies and pain control. With the prospects of a joint venture for a peripheral nerve injury product, and with certain rights relating to commercialization of the Andara OFS device for acute spinal cord injury and acquisition of Cyberkinetics, this strategic relationship has the potential to diversify our business in a manner consistent with our long term goals.
Shai N. Gozani, M.D., Ph.D, NeuroMetrix's President and CEO said, “We are very excited about this strategic alliance with Cyberkinetics. The quality of the Cyberkinetics’ science, product development capabilities, people and the potential for the Andara OFS technology make this a very attractive investment and product development opportunity for our company.”
Timothy R. Surgenor, President and CEO of Cyberkinetics, commented: “This alliance offers us a tremendous opportunity to expand the potential of the Andara™ OFS™ Therapy by initiating development of a new indication – the treatment of peripheral nerve injuries - with a leading Neurotechnology partner. I believe that our combined expertise in the field of nerve growth targeted at the development of a new treatment for peripheral nerve injury offers new hope to patients.”
Cyberkinetic’s Andara OFS device, which provides stimulation via an oscillating electrical field to promote neural regeneration, has shown promising results in patients with acute spinal cord injuries and has led to Cyberkinetic’s filing of an HDE application with the FDA. We believe that this technology may also be suitable to assist in the repair of damage created by laceration, stretch and compression injuries to peripheral nerves in the arms, hands, face, legs and feet. These injuries can permanently impair sensory and motor function and result in disabilities. We believe that there are 800,000 peripheral nerve injuries per year in the US that may require surgical intervention and that at least 100,000 of these may benefit from nerve fiber growth repair treatment using an implantable neurostimulator.
The goal of the joint venture, which the companies will be finalizing over the next several months, is to utilize the Andara OFS technology to develop a product or series of products for peripheral nerve injuries. The proposed terms of the joint venture, which are subject to negotiation and finalization, are as follows:
- The two companies each own 50% of the joint venture;
- Cyberkinetics contributes intellectual property, know-how and scientific expertise to the joint venture;
- NeuroMetrix funds up to $2 million in spending for the first two years of the joint venture; the two companies share further development costs equally; and
- NeuroMetrix obtains an option to negotiate for exclusive rights to commercialize any products which are developed within the joint venture.
The investment of $2.5 million made by NeuroMetrix was for the purchase of 5.4 million shares of common stock of Cyberkinetics, or approximately 13% of the company’s currently issued and outstanding shares, at a price of $0.46 per share. NeuroMetrix also received a warrant to purchase up to 2.7 million shares, or 50% of the total shares purchased. The warrant is exercisable at $0.46 per share and has a term of five years but if Cyberkinetics receives FDA approval of the HDE for the Andara OFS device for acute spinal cord injuries NeuroMetrix will be required to exercise the warrant.
NeuroMetrix also received certain rights with this strategic investment, including a right of first negotiation for the acquisition of Cyberkinetics, or any other change of control transaction. NeuroMetrix also received a right of first negotiation for the commercialization of the Andara OFS device for the treatment of acute spinal cord injuries. These rights remain in effect through December 31, 2008. Cyberkinetics also appointed Dr. Gozani to its Board of Directors, as the Neurometrix designee.
Company to Host Live Conference Call and Webcast
The Company's management team will host a live conference call and webcast at 9:00 a.m. Eastern time on Wednesday, November 14, 2007 to discuss the Company’s strategic relationship with Cyberkinetics. In addition, the Company may answer questions concerning business and financial matters pertaining to this transaction. The conference call may be accessed in the United States by dialing 800-706-7741 and using the confirmation code 55208965. Internationally, the conference call may be accessed by dialing 617-614-3471, and using the same confirmation code. The webcast will be accessible from the Company's website at www.neurometrix.com under the "Investors" tab and a replay of the webcast will be available on the Company's website for three months. A replay of the conference call will be available starting two hours after the call by dialing 888-286-8010, domestically and 617-801-6888, internationally. The confirmation code to access the replay is 21143381. The replay will be available for three months following the conference call.
About NeuroMetrix
NeuroMetrix is 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. To date, our focus has been on the diagnosis of neuropathies and neurovascular disorders. Neuropathies are diseases of the peripheral nerves and parts of the spine that frequently are caused by or associated with diabetes, low back pain and carpal tunnel syndrome, as well as other clinical disorders. The NC-stat® System, the Company's neuropathy diagnostic 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. Diabetic retinopathy is a common neurovascular complication of diabetes and the leading cause of blindness among working age adults. The Company has exclusive rights in the U.S. physician office arena to market the DigiScope, which is a retinopathy detection system specifically designed for use by primary diabetes care physicians.
About Cyberkinetics
Cyberkinetics Neurotechnology Systems, Inc., a leader in the Neurotechnology industry, is developing neural stimulation, sensing and processing technology to improve the lives of those with severe paralysis resulting from spinal cord injuries, neurological disorders and other conditions of the nervous system. Cyberkinetics' product development pipeline includes: Andara™ Oscillating Field Stimulator (OFS™) System Therapy for acute spinal cord injury, an investigative device designed to stimulate nerve repair and restore sensation and motor function; the BrainGate System, an investigative device designed to provide communication and control of a computer, assistive devices, and, ultimately, limb movement; and a pilot program in the detection and prediction of seizures due to epilepsy. Additional information is available at Cyberkinetics' website at www.cyberkinetics.com.
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” 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 the Company. 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, risks associated with: the Company’s ability to increase its customer base and expand the market for its or its collaborators’ products; the ability to manage potential growth; obtaining necessary regulatory approvals; reliance on third party manufacturers and suppliers; compliance with applicable quality control and manufacturing standards; retaining key management, scientific or sales personnel; delays in the development of new products or to planned improvements to the Company’s or its collaborators’ products; effectiveness of the Company’s or its collaborators’ products compared to other medical device products; protection of the Company’s or its collaborators’ intellectual property and other proprietary rights; conflicts with the intellectual property of third parties; product liability lawsuits that may be brought against the Company or its collaborators; competition; dependence upon computer and communication infrastructure utilized by the Company’s products; potential future publication of articles or announcement of positions by physician associations or other organizations that are unfavorable to the Company’s or its collaborators’ products; the Company’s or its collaborators’ capital and financing needs; and any failure of the Company to successfully integrate acquired businesses or products. These factors are discussed in more detail in the Company’s 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.
Source: NeuroMetrix
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