FRANKLIN, Mass., Jan. 6, 2011 /PRNewswire/ -- Echo Therapeutics, Inc. (OTC Bulletin Board: ECTE), a company developing its needle-free Symphony™ tCGM System as a non-invasive, wireless, transdermal continuous glucose monitoring system and its Prelude™ SkinPrep System for transdermal drug delivery, today announced that it has raised approximately $2.5 million through a series of private placements of the Company's stock and warrants, and it has received a binding commitment for an additional $3 million. The funding was led by the Company's largest shareholder, Platinum Montaur Life Sciences, LLC ("Montaur"). Current investors and other select institutional and accredited investors also participated in the financings. Echo expects to use the net proceeds for product development, clinical studies, working capital and general corporate purposes.
Echo conducted a private placement of common stock and warrants with aggregate proceeds of approximately $2.5 million through a series of closings held from November 2010 through January 2011. Investors purchased units, or partial units, at a price per unit of $25,000, consisting of (i) 25,000 shares of Echo common stock, (ii) Series 1 warrants to purchase 12,500 shares of Echo common stock with an exercise price of $1.50 per share, and (iii) Series 2 warrants to purchase 12,500 shares of Echo common stock with an exercise price of $2.50 per share.
On January 5, 2011, Echo also received a $3 million funding commitment from Montaur. Montaur will advance $1 million of the committed funds to Echo pursuant to a bridge note, which is intended to convert into convertible preferred stock no later than February 1, 2011. Montaur has agreed to invest an additional $2 million through the purchase of convertible preferred stock in monthly installments from February through May 2011. The financial terms of Montaur's funding commitment are substantially similar to those of the private placement of common stock with regards to the per share purchase price, warrant coverage and terms of the warrants issued to each purchaser.
"The completion of this financing is a watershed event for the Company as we believe that we now have sufficient funds to substantially complete the product development, clinical studies and manufacturing of both our Prelude SkinPrep System, our skin permeation platform technology, and our Symphony tCGM System, our needle-free continuous glucose monitoring system," stated Patrick T. Mooney, M.D., Chairman and CEO of Echo Therapeutics. "We are now fully prepared to support the near-term commercialization of Prelude for the topical delivery of 4% lidocaine cream through our partner, Ferndale Pharma Group. Additionally, over the coming months we are now able to aggressively finalize the Symphony tCGM biosensor and complete the clinical validation necessary for FDA clearance of the product. This funding enhances the Company's competitive position for Symphony in the glucose monitoring market, a $12 billion-plus annual market opportunity. We look forward to testing our commercially-ready Symphony tCGM System in a clinical trial in the near term and ultimately filing for FDA approval."
The securities issued in the financing have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States in the absence of an effective registration statement or an exemption from the registration requirements under the Securities Act. This notice does not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state.
About Echo TherapeuticsEcho is developing the Symphony tCGM System as a non-invasive, wireless, transdermal continuous glucose monitoring system for patients with diabetes and for use in hospital critical care units. Echo is also developing its needle-free Prelude SkinPrep System as a platform technology for enhanced skin permeation for delivery of topical pharmaceuticals.
Cautionary Statement Regarding Forward Looking StatementsThe statements in this press release that are not historical facts may constitute forward-looking statements that are based on current expectations and are subject to risks and uncertainties that could cause actual future results to differ materially from those expressed or implied by such statements. Those risks and uncertainties include, but are not limited to, risks related to regulatory approvals and the success of Echo's and its partners' ongoing studies, including the efficacy of Echo's Symphony tCGM and Prelude SkinPrep Systems, the failure of future development and preliminary marketing efforts related to Echo's Symphony tCGM and Prelude SkinPrep Systems, Echo's ability to secure additional commercial partnering arrangements, risks and uncertainties relating to Echo's and its partners' ability to develop, market and sell diagnostic and transdermal drug delivery products based on its skin permeation platform technologies, including the Symphony tCGM and Prelude SkinPrep Systems, the availability of substantial additional equity or debt capital to support its research, development and product commercialization activities, and the success of its research, development, regulatory approval, marketing and distribution plans and strategies, including those plans and strategies related to its Symphony tCGM and Prelude SkinPrep Systems. These and other risks and uncertainties are identified and described in more detail in Echo's filings with the Securities and Exchange Commission, including, without limitation, its annual report on Form 10-K for the year ended December 31, 2009, its quarterly reports on Form 10-Q, and its current reports on Form 8-K. Echo undertakes no obligation to publicly update or revise any forward-looking statements.For More Information:Patrick T. Mooney, M.D.
Media: Richard SternChairman and Chief Executive Officer
Stern & Co.(508) 530-0329
|SOURCE Echo Therapeutics, Inc.|
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