EnteroMedics Reports Fourth Quarter 2012 Financial Results

EnteroMedics Reports Fourth Quarter 2012 Financial Results 
ST. PAUL, MN -- (Marketwire) -- 02/13/13 --   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 months and full year ended December 31, 2012.  
For the full year ended December 31, 2012, the Company reported a net
loss of $23.5 million, or $0.59 per share. For the three months ended
December 31, 2012, the Company reported a net loss of $7.0 million,
or $0.17 per share, including research and development expenses of
$3.1 million and selling, general and administrative expenses of $3.6
million. 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) System. On December 31,
2012, the Company's cash, cash equivalents, restricted cash and
short-term investments totaled $22.5 million. 
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) and ReCharge pivotal trials; 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 Company)                        
        Condensed Consolidated Statements of Operations (unaudited)         
                   (in thousands, except per share data)                    
                                                                            
                                                                            
                                                                            
                                  Three Months Ended        Year Ended      
                                     December 31,          December 31,     
                       
          --------------------  -------------------- 
                                    2012       2011       2012       2011   
                                 ---------  ---------  ---------  --------- 
                                                                            
Sales                            $       -  $       -  $     312  $       - 
Cost of goods sold                       -          -        232          - 
                                 ---------  ---------  ---------  --------- 
    Gross profit                         -          -         80          - 
                                 ---------  ---------  ---------  --------- 
                                                                            
Operating expenses:                                                         
  Research and development           3,147      5,791     10,668     16,673 
  Selling, general and                                                      
   administrative                    3,614      2,094     11,961      8,583 
                                 ---------  ---------  ---------  --------- 
    Total operating expenses         6,761      7,885     22,629     25,256 
                                 ---------  ---------  ---------  --------- 
                                                                            
Operating loss                      (6,761)    (7,885)   (22,549)   (25,256)
Other income (expense), net           (266)      (171)      (911)      (741)
                                 ---------  ---------  ---------  --------- 
    Net loss                     $  (7,027) $  (8,056) $ (23,460) $ (25,997)
                                 =========  =========  =========  ========= 
                                                                            
  Net loss per share - basic and                                            
   diluted                       $   (0.17) $   (0.22) $   (0.59) $   (0.86)
                                 =========  =========  =========  ========= 
                                                                            
Shares used to compute basic and                                            
 diluted net loss per share         41,698     36,751     39,537     30,205 
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
                                                                            
                              ENTEROMEDICS INC.                             
                        (A Development Stage Company)                       
              Condensed Consolidated Balance Sheets (unaudited)             
                               (in thousands)                               
                                                                            
                                                                            
                                                   December 31, December 31,
                                                       2012         2011    
                                                   ------------ ------------
                       ASSETS                                               
Cash, cash equivalents and short-term investments  $     22,309 $     29,493
Restricted cash                                             200          200
Inventory                                                 1,271        1,069
Prepaid expenses and other current assets                   624          805
Property and equipment, net                                 610          630
Other assets                                              1,082          289
                                                   ------------ ------------
    Total assets                                   $     26,096 $     32,486
                                                   ============ ============
                                                                            
        LIABILITIES AND STOCKHOLDERS' EQUITY                                
Liabilities:                                                                
  Accounts payable                                 $        341 $        434
  Debt                                                    9,684        5,188
  Other liabilities                                       4,196        6,823
                                                   ------------ ------------
    Total liabilities                                    14,221       12,445
Stockholders' equity                                     11,875       20,041
                                                   ------------ ------------
    Total liabilities and stockholders' equity     $     26,096 $     32,486
                                                   ============ ============

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