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NeuroMetrix Completes the Acquisition of the Assets of EyeTel Imaging; Looks to Expand Market Opportunity for the DigiScope into Optometry Clinics

WALTHAM, Mass.--(BUSINESS WIRE)--Dec. 26, 2007--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 acquired substantially all of the assets of EyeTel Imaging, Inc. ("EyeTel") and has assumed certain specified liabilities in connection with the acquisition. The purchase price consisted of 1,050,295 newly issued shares of common stock of NeuroMetrix, with a value of approximately $9.9 million as of the closing of the acquisition, and $175,000 in cash. NeuroMetrix originally obtained an exclusive license to commercialize EyeTel's DigiScope(R) throughout the physician office market in October 2006 and has been marketing the product since early 2007. With this acquisition, NeuroMetrix will own all EyeTel intellectual property, including an exclusive worldwide license with Johns Hopkins University, for the DigiScope. Furthermore, the acquisition secures all commercialization rights to the DigiScope which includes both the physician office market and an expanded opportunity in the eye specialist market, comprised primarily of vision centers supervised by optometrists. It is anticipated that the acquisition of EyeTel will provide an opportunity to significantly improve the gross margins realized by NeuroMetrix on sales of the DigiScope.

The DigiScope is based on patented technology developed at the Wilmer Eye Institute of Johns Hopkins University and commercialized under an exclusive licensing agreement with Johns Hopkins University. The DigiScope is an FDA 510(k) cleared diagnostic device that physicians and optometrists can use for the early detection of diabetic retinopathy and other eye diseases. DigiScope operations will continue to be run primarily out of the EyeTel facility and reading center located in Columbia, Maryland. Approximately twenty EyeTel employees and consultants will transition to NeuroMetrix. It is estimated by the American Diabetes Association ("ADA") that 21 million people in the United States have diabetes. Diabetic retinopathy, a major complication of diabetes, is a silent, progressive and debilitating condition which is the leading cause of blindness among working-age Americans. Virtually all patients with diabetes will develop some level of diabetic retinopathy during the course of their lives. Fortunately, blindness due to diabetic retinopathy can be prevented in the vast majority of patients through early diagnosis by annual dilated eye examinations and appropriate interventions such as laser procedures. For this reason, the ADA recommends that patients with diabetes receive annual dilated eye exams. Despite this recommendation, less than 50% of patients with diabetes have the recommended annual eye exams. The DigiScope addresses this clinical problem by providing physicians and optometrists with gold standard technology at the point of care. The DigiScope may also be useful in the evaluation of other common retinal and optic nerve disorders, such as age related macular degeneration and glaucoma.

Shai N. Gozani, M.D., Ph.D., NeuroMetrix President and Chief Executive Officer, commented: "We believe that the acquisition of EyeTel is consistent with the long-term vision of our Company. The DigiScope represents an important diagnostic tool for physicians and optometrists in that it enables them to increase compliance with annual eye exams among patients with diabetes. This effort to detect diabetic retinopathy in physician offices and vision centers addresses a critical need among patients with diabetes and has the potential to help reduce diabetes related blindness through earlier detection." Dr. Gozani continued: "We have been marketing the DigiScope for nearly a year and believe that this product represents a very good fit with our neurotechnology oriented clinical mission and within our product development and sales and marketing organizations. A strong and impressive foundation has been built by the dedicated EyeTel employees. With their leadership, we expect to advance the DigiScope platform from a technical and scientific perspective, and to expand its market presence. We believe that office based assessments of retinal and optic nerve pathology represent a significant market opportunity."

Gary L. Gregory, NeuroMetrix Chief Operating Officer, added: "In addition to our existing efforts in the physician office arena, we look to bring the DigiScope platform to the optometry, or eye specialist, arena. This represents an additional market of approximately 20,000 practices which is well aligned to our present business, marketing and sales approach. This will allow NeuroMetrix to deliver this advanced technology to an even broader market - while capitalizing upon our proven, existing marketing and sales organization."

Kevin Quinn, founder and Vice President of Business Development at EyeTel stated: "We are very excited to be joining forces with NeuroMetrix in our effort to further penetrate and expand the market for the DigiScope. We entered into our initial partnership with NeuroMetrix as a result of their strong presence in the physician office market and we are pleased with the progress to date. The NeuroMetrix team has proven that it can successfully commercialize medical device products through its highly capable team, including its sales force. I personally look forward to carrying out the mission of helping physicians and optometrists preserve the vision of their patients as we combine our strengths with those of NeuroMetrix."

The DigiScope is specifically designed for ease of use by primary diabetes care physicians and optometrists. It has been shown to be equivalent to 7-field stereo color fundus photography, the current gold standard for detection of diabetic retinopathy. The DigiScope works by capturing digital images of a patient's retina through a dilated pupil and sending images via the internet to the EyeTel Reading Center. The Reading Center then processes the images and sends the results back to the physician within 2 business days. Those patients identified as having diabetic retinopathy are then referred to an ophthalmologist for appropriate care.

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. Through the Company's acquisition of EyeTel Imaging, NeuroMetrix has exclusive worldwide commercial rights to the DigiScope, which is a retinal imaging system specifically designed for use at the point-of-care in physician offices and vision clinics.

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; meeting certain of the Company's financial projections, including those relating to gross margins; 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.

CONTACT: NeuroMetrix, Inc.
Brad Smith, 781-890-9989
neurometrix.ir@neurometrix.com

SOURCE: NeuroMetrix, Inc.

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