Echo Therapeutics Delisted From Nasdaq, Shares Plummet

Shares of Echo Therapeutics Inc. (NASDAQ:ECTE) plunged 17.3% to close at $1.48 on Jul 11, after the company announced that it has received a delisting notice from the Nasdaq stock market. The company announced that it expects to start trading on the OTCQB Venture Market, operated by the OTC Markets Group Inc. under its current trading symbol "ECTE” from Jul 12.

The delisting resulted from Echo Therapeutics’ failure to comply with Nasdaq’s minimum shareholder equity requirement. Previously, the company had been granted an extension by the Nasdaq Hearing Panel to show compliance with the requirement of a minimum $2.5 million in stockholders' equity by Jul 5. However, the company failed to meet the terms that resulted in its delisting.

Echo Therapeutics is a medical device company currently focusing on developing non-invasive continuous glucose monitoring (CGM) system. The company recently started testing of its NextGen CGM system and also selected a Clinical Research Organization (CRO) to initiate the clinical and regulatory process towards product approval.

Per Echo Therapeutics “NextGen CGM system is more consumer-friendly and substantially less expensive than the prior version. The new streamlined design includes a self-use exfoliator, a new exfoliator tip, a more sensitive sensor element with increased consistency, and a reusable transmitter and battery. Transmitted glucose information is displayed on a new CGM App using Echo's API technology.”

Recently, Echo Therapeutics announced the receipt of Institutional Review Board’s approval for a new clinical protocol, which allows expanded testing of its CGM system. Based on the approval, the company now can recruit both pediatric and adult subjects for its internal and external studies.

Echo Therapeutics also received a new patent granted by Japan, which covers its system and methods for transdermal monitoring of analytes, including glucose and other substances. The new patent cover will help the company aggressively pursue business development opportunities in the country.

Nevertheless, we believe that the delisting from the Nasdaq will overshadow all these positive developments at least in the near-term. The delisting hurts Echo Therapeutics credibility among investors, which can eventually dry-up capital funding sources that will put the company’s operations into jeopardy.

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