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Echo Therapeutics shareholder proposes deal with China partner

5:25 pm by | 0 Comments

symphony-tcgm-system-largeIt’s been a stormy week for Echo Therapeutics (NASDAQ: ECTE), a medical device company with a wireless, painfree continuous glucose monitoring system in the late stages of development.  CEO Dr. Patrick Mooney took an immediate leave of absence Monday. Today Platinum-Montaur Life Sciences, the company’s largest shareholder with a 20 percent stake in the business, issued a public statement demanding the board’s response to a list of changes including the replacement of two board members and proposing a deal with a manufacturing partner in China.

In the letter from Michael Goldberg, a portfolio manager with Platinum-Montaur, he said the investment manager had identified a China partner for the development and manufacture of Echo’s continuous glucose monitor. He pointed out that a partner in China would cover development costs and take responsibility for manufacturing, marketing and selling the device in China.

“Regrettably, endless months of Board inaction force us to publicly announce a multi-point plan carefully targeted to address the shortfalls in leadership, strategy, product partnering and financing that have plagued Echo and punished its shareholders through dilution and rampant loss of market value.”

Platinum-Montaur has threatened “further action” if the board does not respond to its proposal before 5pm on September 4.

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In the past year the company’s share price has fallen from a high of $18.51 to $2 since the start of the year from $13 in January to $2.44 today.

In June the company initiated a multi-center clinical trial as part of its effort to seek CE Mark approval for its device in Europe. Earlier this month, Echo Therapeutics announced Platinum-Montaur would provide up to $20 million credit to help it commercialize its Symphony continuous glucose monitor.

The news attracted some reaction on Twitter:

 

Echo’s Symphony glucose monitor is designed to give a continuous read of a patient’s blood-glucose levels. A second component, Prelude, is a skin preparation system that measures the electrical conductivity of the skin region where the monitoring takes place. Although its lead indication is for hospital settings, it could also be used by diabetics.

[Photo credit: Ohmega1982]

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Stephanie Baum

By Stephanie Baum

Stephanie Baum is the East Coast Innovation Reporter for MedCityNews.com. She enjoys covering healthcare startups across health IT, drug development and medical devices and innovations deployed to improve medical care. She graduated from Franklin & Marshall College in Pennsylvania and has worked across radio, print and video. She's written for The Christian Science Monitor, Dow Jones & Co. and United Business Media.
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