EnteroMedics Reports Third Quarter 2012 Financial Results

EnteroMedics Reports Third Quarter 2012 Financial Results 
Company to Host Conference Call Today, October 24, 2012, at 11:00 AM
ET 
ST. PAUL, MN -- (Marketwire) -- 10/24/12 --  EnteroMedics Inc.
(NASDAQ: ETRM), the developer of medical devices using neuroblocking
technology to treat obesity, metabolic diseases and other
gastrointestinal disorders, today announced financial results for the
three and nine months ended September 30, 2012.  
For the three months ended September 30, 2012, the Company reported a
net loss of $5.8 million, or $0.14 per share, including research and
development expenses of $2.6 million and general and administrative
expenses of $3.0 million. For the nine months ended September 30,
2012, the Company reported a net loss of $16.4 million, or $0.42 per
share. Operating expenses were primarily associated with the cost of
supporting the Company's multiple ongoing clinical trials, including
the ReCharge Study, international commercialization efforts, and the
continued development of VBLOC(R) vagal blocking therapy delivered
through the Company's Maestro(R) Rechargeable System. On September
30, 2012, the Company's cash, cash equivalents, restricted cash and
short-term investments totaled $27.4 million. 
"As 2012 draws to a close, we look forward to the unblinding of our
pivotal ReCharge Study and, following a thorough analysis of the
study data, to the announcement of results in the first quarter of
2013," said Greg S. Lea, Senior Vice President and Chief Financial
Officer. "As we take steps to prepare for anticipated US
pre-commercialization activities related to the Maestro System in
2013, the Company remains well funded, with cash and investments of
$27.4 million at the end of September and a $45.0 million committed
issuer managed equity financing facility available for draw, subject
to certain conditions, at our discretion. This gives us financial
flexibility as we approach these major milestones, seek US regulatory
approval and continue to develop our commercialization strategy in
markets around the world."  
Conference Call Details 
The third quarter conference call may be accessed by dialing (877)
280-7473 (U.S. and Canada) or (707) 287-9370 (international), and
entering passcode 47062909. A replay of the call will be avai
lable
from October 24, 2012 at 2:00 PM Eastern Time through January 24,
2013 at 11:59 PM Eastern Time by dialing (855) 859-2056 (U.S. and
Canada) or (404) 537-3406 (international) and entering passcode
47062909.  
To access the live webcast, visit the events page of the investor
relations section of EnteroMedics' website at www.enteromedics.com. A
replay of the webcast will be available immediately after the
conference call.  
About Maestro(R) Rechargeable (RC) System 
The Maestro RC System delivers VBLOC(R) vagal blocking therapy via
two small electrodes that are laparoscopically implanted and placed
in contact with the trunks of the vagus nerve just above the junction
between the esophagus and the stomach. The Maestro RC System is
powered by an internal, rechargeable battery. The battery is
recharged via an external mobile charger and transmit coil that the
patient uses for a short time each week. The Maestro RC System has
received CE Mark and has been listed on the Australian Register of
Therapeutic Goods. 
About VBLOC(R) Therapy 
EnteroMedics developed VBLOC(R) vagal blocking therapy to offer
bariatric surgeons and their patients a less invasive alternative to
existing surgical weight loss procedures that may present significant
risks and alter digestive system anatomy, lifestyle and food choices.
VBLOC(R) Therapy is delivered via the Maestro(R) System through
laparoscopically implanted leads to intermittently block the vagus
nerves using high-frequency, low-energy electrical impulses. VBLOC(R)
Therapy is designed to target the multiple digestive functions under
control of the vagus nerves and to affect the perception of hunger
and fullness. 
About EnteroMedics Inc.  
EnteroMedics is a medical device company focused on the development
and commercialization of its neuroscience based technology to treat
obesity and metabolic diseases. EnteroMedics' proprietary technology,
VBLOC(R) vagal blocking therapy, delivered by a pacemaker-like device
called the Maestro(R) Rechargeable System, is designed to
intermittently block the vagus nerves using high-frequency,
low-energy, electrical impulses. VBLOC allows people with obesity to
take a positive path towards weight loss, addressing the lifelong
challenge of obesity and its comorbidities without sacrificing
wellbeing or comfort. EnteroMedics' Maestro Rechargeable System has
received CE Mark and is listed on the Australian Register of
Therapeutic Goods.  
Forward-Looking Safe Harbor Statement:  
This press release contains forward-looking statements about
EnteroMedics Inc. Our actual results could differ materially from
those discussed due to known and unknown risks, uncertainties and
other factors including our limited history of operations; our losses
since inception and for the foreseeable future; our lack of
commercial regulatory approval for our Maestro(R) System for the
treatment of obesity in the United States or in any foreign market
other than Australia and the European Community; our preliminary
findings from our EMPOWER(TM) pivotal trial; our ability to comply
with the Nasdaq continued listing requirements; our ability to
commercialize our Maestro System; our dependence on third parties to
initiate and perform our clinical trials; the need to obtain
regulatory approval for any modifications to our Maestro System;
physician adoption of our Maestro System and VBLOC(R) vagal blocking
therapy; our ability to obtain third party coding, coverage or
payment levels; ongoing regulatory compliance; our dependence on
third party manufacturers and suppliers; the successful development
of our sales and marketing capabilities; our ability to raise
additional capital when needed; international commercialization and
operation; our ability to attract and retain management and other
personnel and to manage our growth effectively; potential product
liability claims; potential healthcare fraud and abuse claims;
healthcare legislative reform; and our ability to obtain and maintain
intellectual property protection for our technology and products.
These and additional risks and uncertainties are described more fully
in the Company's filings with the Securities and Exchange Commission,
particularly those factors identified as "risk factors" in the annual
report on Form 10-K filed March 15, 2012. We are providing this
information as of the date of this press release and do not undertake
any obligation to update any forward-looking statements contained in
this document as a result of new information, future events or
otherwise.  
Caution - Investigational device. Limited by Federal (United States)
law to investigational use.  
The implantation procedure and usage of the Maestro(R) System carry
some risks, such as the risks generally associated with laparoscopic
procedures and those related to treatment as described in the
ReCharge clinical trial informed consent.  
(See attached tables) 


 
                                                                            
                                                                            
                                                                            
                             ENTEROMEDICS INC.                              
                       (A Development Stage C
ompany)                        
        Condensed Consolidated Statements of Operations (unaudited)         
                   (in thousands, except per share data)                    
                                                                            
                                                                            
                               Three Months Ended       Nine Months Ended   
                                  September 30,           September 30,     
                             ----------------------  ---------------------- 
                                2012        2011        2012        2011    
                             ----------  ----------  ----------  ---------- 
                                                                            
Sales                        $        -  $        -  $      312  $        - 
Cost of goods sold                    -           -         232           - 
                             ----------  ----------  ----------  ---------- 
    Gross profit                      -           -          80           - 
                             ----------  ----------  ----------  ---------- 
                                                                            
Operating expenses:                                                         
  Research and development        2,581       4,779       7,521      10,882 
  Selling, general and                                                      
   administrative                 2,992       2,354       8,347       6,489 
                             ----------  ----------  ----------  ---------- 
    Total operating expenses      5,573       7,133      15,868      17,371 
                             ----------  ----------  ----------  ---------- 
                                                                            
Operating loss                   (5,573)     (7,133)    (15,788)    (17,371)
Other income (expense), net        (274)       (165)       (645)       (570)
                             ----------  ----------  ----------  ---------- 
    Net loss                 $   (5,847) $   (7,298) $  (16,433) $  (17,941)
                             ==========  ==========  ==========  ========== 
                                                                            
  Net loss per share - basic                                                
   and diluted               $    (0.14) $    (0.26) $    (0.42) $    (0.64)
                             ==========  ==========  ==========  ========== 
                                                                            
  Shares used to compute                                                    
   basic and diluted net                                                    
   loss per share                40,984      28,210      38,811      27,999 
                             ==========  ==========  ==========  ========== 
                                                                            
                                                                            
                                                                            
                              ENTEROMEDICS INC.                             
                        (A Development Stage Company)                       
              Condensed Consolidated Balance Sheets (unaudited)             
                               (in thousands)                               
                                                                            
                                                                            
                                                 September 30,  December 31,
                                                      2012          2011    
                                                 ------------- -------------
                     ASSETS                                                 
Cash, cash equivalents and short-term                                       
 investments                                     $      27,215 $      29,493
Restricted cash                                            200           200
Inventory                                                1,611         1,069
Prepaid expenses and other current assets                  611           805
Property and equipment, net                                630           630
Other assets                                               456           289
                                                 ------------- -------------
    Total assets                                 $      30,723 $      32,486
                                                 ============= =============
                                                                            
      LIABILITIES AND STOCKHOLDERS' EQUITY                                  
Liabilities:                                                                
  Accounts payable                               $         293 $         434
  Debt                                                   9,633         5,188
  Other liabilities                                      3,985         6,823
                                                 ------------- -------------
    Total liabilities                                   13,911        12,445
Stockholders' equity                                    16,812        20,041
                                                 ------------- -------------
    Total liabilities and stockholders' equity   $      30,723 $      32,486
                                                 ============= =============

  
Contact:
EnteroMedics Inc.
Greg S. Lea
(651) 789-2860
ir@enteromedics.com