Echo Therapeutics (ECTE)

Echo Announces Very Strong Symphony^® tCGM Results in Critical Care
Final Feasibility Data Expected This Quarter at ADA Conference
Prelude^® SkinPrep Program to Refocus on Ex-US Markets

Download Full 7-Page Note with Important Disclosures: Morning Note 05-02-12 ECTE

Echo Therapeutics announced very strong results for their Symphony^® tCGM (transdermal continuous glucose monitoring) system from the Feasibility 3A study in Critical Care patients (their lead indication) conducted at Tufts Medical Center in Boston. Results from the ongoing 3B study site are expected to be announced at the American Diabetes Association 72nd Scientific Sessions conference June 8th-12th in Philadelphia.

Investors should note three key takeaways from the Feasibility 3A (Tufts) results:

1.) The Feasibility 3A data indicates that the new Symphony^® tCGM System can successfully monitor Critical Care patients, which is their lead indication. The CG-EGA was 99.6% clinically accurate with 0% benign errors for a combined A+B of 99.6%. These are the best results seen thus far during feasibility testing. In addition, the MARD remained in range at 12.3%.

2.) The Feasibility 3A data agreed with the data seen in the previous Feasibility studies in both healthy and diabetic patients using Prelude^® microabrasion. The Symphony tCGM results appear to be accurate and consistent. The data also indicates that Echo’s non-invasive transdermal biosensor and skin microabrasion technology is equivalent to the competition’s invasive sensor wire systems.

3.) The Symphony^® tCGM System appears safe as there were no adverse events reported.

MARD: Mean Absolute Relative Difference – Error calculated as the average relative difference between Symphony and the reference measurements

CG-EGA A: Continuous Glucose-Error Grid Analysis A – the clinically accurate A zone of the Clarke error grid

CG-EGA A+B: includes the clinically relevant B zone benign errors of the Clarke error grid

FEASIBILITY 3 (Tufts)
Study Design: The study was performed at Tufts Medical Center and enrolled 15 adult patients scheduled for elective cardiac surgery. The skin of each patient was prepared using Prelude and a Symphony tCGM biosensor was applied to the skin site prior to surgery. Reference blood samples were taken from arterial line catheters at 30-minute intervals and measured on a YSI 2300 STAT Plus Glucose Analyzer. The data collected by Symphony was blinded to study subjects and Tufts clinical staff. At the conclusion of the study period, the test skin sites were inspected for redness or other undesirable effects.

Study Results: Using over 540 Symphony tCGM glucose readings from 15 study subjects paired with reference blood glucose measurements, CG-EGA showed that 99.6% of the readings were clinically accurate and 0% were benign errors with a combined A+B of 99.6%. The MARD for the study was 12.3%. There were no adverse events reported from the Prelude skin preparation or the Symphony tCGM biosensor.

FEASIBILITY 2
Study Design: 20 adult subjects with Type 1 or Type 2 diabetes were evaluated. The skin of each subject was prepared using Prelude and a Symphony tCGM biosensor was applied to the skin site. Venous reference blood samples were taken from intravenous lines at 15-minute intervals for 24 hours and measured on a YSI 2300 STAT Plus Glucose Analyzer. The study data was blinded to study subjects and study personnel. At the conclusion of the 24-hour study period, the test skin sites were inspected for redness or other undesirable effects.

Study Results: Using over 2,600 Symphony tCGM glucose readings from the 20 study subjects paired with reference blood glucose measurements, CG-EGA showed that 94.4% of the readings were clinically accurate and 2.5% were benign errors with a combined A+B of 96.9%. The MARD for the study was 12.6%. Values for blood glucose measurements ranged from 38 to 399 mg/dL. There were no adverse events reported from the Prelude skin permeation or the Symphony tCGM biosensor.

FEASIBILITY 1
Study Design: 12 adult subjects without a history of diabetes were evaluated. The skin of each subject was prepared using Prelude and a Symphony tCGM biosensor was applied to the skin site. Venous reference blood samples were taken from intravenous lines at 15-minute intervals for 24 hours and measured on a YSI 2300 STAT Plus Glucose Analyzer and a commercially available, professional-use glucometer. The study data was blinded to study subjects and study personnel. At the conclusion of the 24-hour study period, the test skin sites were inspected for redness or other undesirable effects.

Study Results: Using over 1,600 Symphony tCGM glucose readings from the 12 study subjects paired with reference blood glucose measurements, CG-EGA showed that 98.3% of the readings were clinically accurate and 1.2% were benign errors with a combined A+B of 99.5%. The MARD for the study was 10.5%. Values for blood glucose measurements ranged from 64 to 212 mg/dL. There were no adverse events reported from the Prelude skin permeation or the Symphony tCGM biosensor.

Download Full 7-Page Note with Important Disclosures: Morning Note 05-02-12 ECTE

Prelude Patents Strengthen Ex-US Position – Symphony Adds US Patent
Symphony tCGM Data Expected This Quarter in Critical Care Patients
Prelude SkinPrep Program to Refocus on Ex-US Markets

Download Full 5-Page Note with Important Disclosures: Morning Note 04-05-12 ECTE

Echo Therapeutics announced the issuance of patents covering its Prelude SkinPrep system and a notice of allowance for a U.S. patent covering its Symphony tCGM System.

The international patents covering the Prelude SkinPrep system,”Skin Permeation Device for Analyte Sensing or Transdermal Drug Delivery” were granted in 34 European countries, Australia, Hong Kong, New Zealand and Russia. Specifically, the patents cover the Prelude SkinPrep and how it prepares the skin in a controlled, dermabrasive manner to permit either drug delivery or analyte extraction. These patents will expire in 2028. Investors should note that these patents pave the way for Echo Therapeutics, which retains the rights to continental Europe and Australia, to shift the Prelude focus to these markets.

Additionally, Echo Therapeutics received a notice of allowance for U.S. Patent Application No. 11/223,971, entitled “System and Method for Analyte Sampling and Analysis with Hydrogel”. The claims in this application cover certain aspects of the biosensor in the Symphony tCGM System. The patent, when issued, is expected to expire in 2026.

Finally, we expect data from Echo Therapeutics Symphony tCGM Feasibility 3 study in critical care patients (the intended first indication for Symphony) during this quarter. We expect this to be a significant catalyst for Echo which sets the stage for their pivotal PMA registration program. The prior feasibility study data in both healthy and diabetic patients has been very promising. 12 healthy patients with 1,600 Symphony tCGM glucose readings showed CG-EGA of 98.3% clinical accuracy with 1.2% benign errors having a combined A+B of 99.5% and MARD of 10.5%. 20 diabetic patients with over 2,600 Symphony tCGM glucose readings showed CG-EGA of 94.4% clinical accuracy with 2.5% benign errors having a combined A+B of 96.9% and MARD of 12.6%. There have been no adverse events reported from the Prelude skin permeation or the Symphony tCGM biosensor in either study.

Download Full 5-Page Note with Important Disclosures: Morning Note 04-05-12 ECTE

Symphony Data This Quarter in Critical Care Patients
$9 Million in Bank for Symphony Pivotal Program
Prelude SkinPrep Program Refocus to Ex-US Markets

Download Full 22-Page Report with Important Disclosures: ECTE Update 04-02-12

1.) Data This Quarter in Critical Care Patients: We expect data from Echo Therapeutics Symphony tCGM Feasibility 3 study in critical care patients (the intended first indication for Symphony) during this quarter. We expect this to be a significant catalyst for Echo which sets the stage for their pivotal PMA registration program.

2.) Symphony Shows Solid Results in Healthy & Diabetic Patients: The feasibility study data in both healthy and diabetic patients has been very promising. 12 healthy patients with 1,600 Symphony tCGM glucose readings showed CG-EGA of 98.3% clinical accuracy with 1.2% benign errors having a combined A+B of 99.5% and MARD of 10.5%. 20 diabetic patients with over 2,600 Symphony tCGM glucose readings showed CG-EGA of 94.4% clinical accuracy with 2.5% benign errors having a combined A+B of 96.9% and MARD of 12.6%. There have been no adverse events reported from the Prelude skin permeation or the Symphony tCGM biosensor in either study. (see Clinical Trials: Results of Feasibility 1 (Healthy) & Feasibility 2 (Diabetic))

3.) FDA Regulatory Environment Hampering Ferndale and Prelude: Ferndale Pharma has been in discussions with the FDA regarding the final labeling/packaging needed for approval of their 510(k) submission of the Prelude™ SkinPrep for use with lidocaine. However, the FDA has now taken the position that it falls under the jurisdiction of the FDA Office of Combination Products as a drug/device combination. Due to the unknown costs and time of this new regulatory burden we have removed U.S. Prelude royalties from our financial model. This is partially offset by our belief that Echo Therapeutics, which retains the rights to continental Europe and Australia, will shift the Prelude focus to these markets which we have added to our financial model.

4.) Clear Market Opportunity: We also remind investors that the Symphony system could become the first non-invasive, wireless, transdermal continuous glucose monitoring (tCGM) system for use in the rapidly emerging hospital critical care market. In addition, Medicare’s “no-pay” guideline for complications associated with hypo- and hyperglycemic glucose levels increases the possibility for a future addition of tighter glycemic controls to the list of Hospital Acquired Conditions (HAC), specifically under Manifestations of Poor Glycemic Control. We further note that currently, ICU nurses spend up to two hours per day for tight glycemic control of a patient which could be essentially eliminated by use of the Symphony tCGM system.

5.) We are maintaining a Strong Speculative Buy with a Price Target of $5.00: Although we have reduced our 12-18 month price target to $5.00 (from $6.00) due to the regulatory obstacles for Ferndale Pharma in the U.S., we believe a shift to ex-U.S. markets along with Echo Therapeutics progressing into their pivotal registration program for the Symphony tCGM system makes Echo shares attractive. Our target prices is based on 35x projected 2014 EPS and discounted 35% for risk resulting in a market capitalization of approximately $200 million. This is a significant discount to DexCom (Nasdaq:DXCM) (see Competition), the only pure-play comparable, which has FDA approval for their invasive, implantable biosensors with a market capitalization of approximately $700 million.

Download Full 22-Page Report with Important Disclosures: ECTE Update 04-02-12

Echo Begins Symphony® tCGM in Critical Care Patients – Results Soon
Promising Results for Symphony® tCGM in Diabetic Patients
Non-Invasive Symphony® tCGM Equivalent to Existing Invasive Wire Systems

Download Full 6-Page Note with Important Disclosures: Morning Note 01-24-12 ECTE

Echo Therapeutics announced that it is initiating clinical studies of its Symphony® tCGM System in critical care patients. Management expects to complete and announce the results of the studies in the near term.

Investors should note that critical care patients are Echo’s lead indication. Even in non-diabetic patients, hyperglycemia is common in critically ill patients. Frequent glucose monitoring with intensive insulin therapy has been shown to reduce patient morbidity and mortality. Currently, intensive insulin therapy is time-consuming for healthcare professionals to monitor blood glucose and adjust insulin to avoid hypoglycemia. The potential benefits of a transdermal continuous glucose monitoring system in critical care would be significant.

Feasibility 3 Study Design: The study will enroll up to 30 critical care patients and will compare data obtained from its Symphony® tCGM System with the YSI 2300 STAT® Plus Glucose Analyzer. The studies are expected to collect more than 1,000 data pairs to be used in the analyses by taking frequent reference glucose measurements for 24 hours. The data from the studies will be blinded to study subjects and study personnel. A comparison of the data relative to the blood glucose values will be used to assess the accuracy of Symphony.

Echo Therapeutics has previously announced successful results from the clinical trial of their Symphony® tCGM System in both Type I and Type II diabetic patients (see Feasibility 2 Results) and in healthy patients (see Feasibility 1 Results).

Download Full 6-Page Note with Important Disclosures: Morning Note 01-24-12 ECTE

Promising Results for Symphony® tCGM in Diabetics – Critical Care Next
Non-Invasive Symphony® tCGM Equivalent to Existing Invasive Wire Systems
Echo Raises Approximately $5.4M to Fund Symphony® tCGM Development

Download Full 6-Page Note with Important Disclosures: Morning Note 12-06-11 ECTE

Echo Therapeutics announced successful results from the clinical trial of their Symphony^® tCGM System in both Type I and Type II diabetic patients (see Feasibility 2 below). Echo now plans to conduct a study in critical care patients.

Echo also announced a registered direct equity financing with current, institutional and strategic investors of approximately $5.4M by issuing 2.4M units at a price of $2.25 per unit. The unit consists of 1 share of common stock and a 3-year warrant to purchase 0.4 of a share of common stock at an exercise price of $3.00 (exercisable 6 months after issuance). The offering is expected to close on or about December 7, 2011.

Investors should note three key takeaways from the Feasibility 2 results:
1.) The Feasibility 2 data indicates that the new Symphony^® tCGM System can monitor a broader range of blood glucose values found in diabetic patients (from 38 to 399 mg/dL) whereas the previous Feasibility 1 study in healthy patients had a narrower range from (64 to 212 mg/dL).

2.) The Feasibility 2 data agreed with the data seen in their Prototype Pilot 3 trial in diabetic patients using Prelude® microabrasion. The data also indicates that Echo’s non-invasive transdermal biosensor and skin microabrasion technology is equivalent to the competition’s invasive sensor wire systems.

3.) The Symphony^® tCGM System appears safe as there were no adverse events reported.

Definitions
MARD: Mean Absolute Relative Difference – Error calculated as the average relative difference between Symphony and the reference measurements

CG-EGA A: Continuous Glucose-Error Grid Analysis A – the clinically accurate A zone of the Clarke error grid

CG-EGA A+B: includes the clinically relevant B zone benign errors of the Clarke error grid

FEASIBILITY 2
Study Design: 20 adult subjects with Type 1 or Type 2 diabetes were evaluated. The skin of each subject was prepared using Prelude and a Symphony tCGM biosensor was applied to the skin site. Venous reference blood samples were taken from intravenous lines at 15-minute intervals for 24 hours and measured on a YSI 2300 STAT Plus Glucose Analyzer. The study data was blinded to study subjects and study personnel. At the conclusion of the 24-hour study period, the test skin sites were inspected for redness or other undesirable effects.

Study Results: Using over 2,600 Symphony tCGM glucose readings from the 20 study subjects paired with reference blood glucose measurements, CG-EGA showed that 94.4% of the readings were clinically accurate and 2.5% were benign errors with a combined A+B of 96.9%. The MARD for the study was 12.6%. Values for blood glucose measurements ranged from 38 to 399 mg/dL. There were no adverse events reported from the Prelude skin permeation or the Symphony tCGM biosensor.

FEASIBILITY 1
Study Design: 12 adult subjects without a history of diabetes were evaluated. The skin of each subject was prepared using Prelude and a Symphony tCGM biosensor was applied to the skin site. Venous reference blood samples were taken from intravenous lines at 15-minute intervals for 24 hours and measured on a YSI 2300 STAT Plus Glucose Analyzer and a commercially available, professional-use glucometer. The study data was blinded to study subjects and study personnel. At the conclusion of the 24-hour study period, the test skin sites were inspected for redness or other undesirable effects.

Study Results: Using over 1,600 Symphony tCGM glucose readings from the 12 study subjects paired with reference blood glucose measurements, CG-EGA showed that 98.3% of the readings were clinically accurate and 1.2% were benign errors with a combined A+B of 99.5%. The MARD for the study was 10.5%. Values for blood glucose measurements ranged from 64 to 212 mg/dL. There were no adverse events reported from the Prelude skin permeation or the Symphony tCGM biosensor.

Download Full 6-Page Note with Important Disclosures: Morning Note 12-06-11 ECTE