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EnteroMedics Reports Second Quarter 2013 Financial Results

EnteroMedics Reports Second Quarter 2013 Financial Results 
Company to Host Conference Call Today, July 31, 2013, at 11:00 AM ET 
ST. PAUL, MN -- (Marketwired) -- 07/31/13 --   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 and six months ended June 30, 2013. 
For the three months ended June 30, 2013, the Company reported a net
loss of $6.3 million, or $0.11 per share, including $1.5 million of
stock based compensation expense. Research and development expenses
were $2.7 million and general and administrative expenses were $3.4
million. For the six months ended June 30, 2013, the Company reported
a net loss of $12.9 million, or $0.25 per share, including $2.8
million of stock based compensation expense. Operating expenses were
primarily associated with the cost of supporting multiple ongoing
clinical trials, including the ReCharge Study, the Company's
international commercialization efforts, the Company's Premarket
Approval (PMA) application for FDA approval of VBLOC(R) vagal
blocking therapy in obesity, and the continued development of VBLOC
Therapy delivered through the Company's Maestro(R) Rechargeable
System. On June 30, 2013, the Company's cash, cash equivalents,
restricted cash and short-term investments totaled $23.3 million. 
"In the second quarter, EnteroMedics successfully submitted its PMA
application to the FDA for commercialization of the Maestro
Rechargeable System in the United States and, as recently announced,
the PMA application has been accepted by the FDA for review and
filing," said Greg S. Lea, Senior Vice President, Chief Financial
Officer and Chief Operating Officer. "This key milestone puts us one
step closer to delivering an important new treatment option to
individuals with obesity."  
Conference Call Details 
The second quarter conference call may be accessed by dialing (877)
280-7473 (U.S. and Canada) or (707) 287-9370 (international), and
entering passcode 23024499. A replay of the call will be available
from July 31, 2013 at 2:00 PM Eastern Time through October 22, 2013
at 11:59 PM Eastern Time by dialing (855) 859-2056 (U.S. and Canada)
or (404) 537-3406 (international) and entering passcode 23024499. 
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 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 7, 2013. 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     Six Months Ended   
                                       June 30,              June 30,       
                                 --------------------  -------------------- 
                                    2013       2012       2013       2012   
                                 ---------  ---------  ---------  --------- 
                                                                            
Sales                            $      --  $     188  $      --  $     312 
Cost of goods sold                      --        146         --        232 
                                 ---------  ---------  ---------  --------- 
    Gross profit                        --         42         --         80 
                                 ---------  ---------  ---------  --------- 
                                                                            
Operating expenses:                                                         
  Research and development           2,712      2,230      5,445      4,940 
  Selling, general and                                                      
   administrative                    3,359      2,542      6,945      5,356 
                                 ---------  ---------  ---------  --------- 
    Total operating expenses         6,071      4,772     12,390     10,296 
                                 ---------  ---------  ---------  --------- 
                                                                            
Operating loss                      (6,071)    (4,730)   (12,390)   (10,216)
Other income (expense), net           (252)      (224)      (514)      (371)
                                 ---------  ---------  ---------  --------- 
    Net loss                     $  (6,323) $  (4,954) $ (12,904) $ (10,587)
                                 =========  =========  =========  ========= 
                                                                            
  Net loss per share - basic and                                            
   diluted                       $   (0.11) $   (0.13) $   (0.25) $   (0.28)
                                 =========  =========  =========  ========= 
                                                                            
  Shares used to compute basic                                              
   and diluted net loss per                                                 
   share                            55,618     38,668     51,281     37,712 
                                 ---------  ---------  ---------  --------- 
                                                                            
                                                                            
                              ENTEROMEDICS INC.                             
                        (A Development Stage Company)                       
              Condensed Consolidated Balance Sheets (unaudited)             
                               (in thousands)                               
                                                    June 30,    December 31,
                                                      2013          2012    
                                                 ------------- -------------
                                   ASSETS                                   
Cash, cash equivalents and short-term                                       
 investments                                     $      23,088 $      22,309
Restricted cash                                            200           200
Inventory                                                1,358         1,271
Prepaid expenses and other current assets                  624           624
Property and equipment, net                                564           610
Other assets                                             1,047         1,082
                                                 ------------- -------------
    Total assets                                 $      26,881 $      26,096
                                                 ============= =============
                                                                            
                    LIABILITIES AND STOCKHOLDERS' EQUITY                    
Liabilities:                                                                
  Accounts payable                               $         227 $         341
  Debt                                                   8,784         9,684
  Other liabilities                                      4,028         4,196
                                                 ------------- -------------
    Total liabilities                                   13,039        14,221
Stockholders' equity                                    13,842        11,875
                                                 ------------- -------------
    Total liabilities and stockholders' equity   $      26,881 $      26,096
                                                 ------------- -------------

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