EnteroMedics Reports Fourth Quarter 2013 Financial Results

EnteroMedics Reports Fourth Quarter 2013 Financial Results 
ST. PAUL, MN -- (Marketwired) -- 02/12/14 --  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 twelve months ended December 31, 2013. 
For the full year ended December 31, 2013, the Company reported a net
loss of $25.8 million, or $0.47 per share. For the three months ended
December 31, 2013, the Company reported a net loss of $6.6 million,
or $0.11 per share, including research and development expenses of
$2.9 million and selling, general and administrative expenses of $3.5
million. Operating expenses were primarily associated with the cost
of supporting multiple ongoing clinical trials, including the
ReCharge Study, the Company's VBLOC(R) vagal blocking therapy
Premarket Approval (PMA) application, and the continued development
of VBLOC Therapy delivered through the Company's Maestro(R)
Rechargeable System. On December 31, 2013, the Company's cash, cash
equivalents and short-term investments totaled $23.3 million, which
includes approximately $11.0 million raised through the Company's
"at-the-market" (ATM) equity facility. As of February 11, 2014 the
Company has raised a total of approximately $13.5 million under its
$20.0 million ATM equity facility. 
"As we announced early today, the U.S. FDA has scheduled an Advisory
Panel meeting for May 29, 2014 to review our PMA application for
approval of the Maestro System," said Greg S. Lea, Senior Vice
President, Chief Financial Officer and Chief Operating Officer. "Our
primary focus remains on the regulatory process for VBLOC Therapy and
preparing for a positive approval decision by FDA shortly after the
Advisory Panel meeting." 
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.  
About the ReCharge Pivotal Study 
The ReCharge Pivotal Study is a randomized, double-blind,
sham-controlled, multicenter pivotal clinical study in 239 randomized
patients (233 implanted) at 10 sites testing the effectiveness and
safety of VBLOC(R) vagal blocking therapy utilizing EnteroMedics'
second generation Maestro(R) Rechargeable (RC) System. All patients
in the study received an implanted device and were randomized in a
2:1 allocation to treatment or control groups. The control group
received a non-functional device during the study period. In February
2013, EnteroMedics announced that its ReCharge Study demonstrated a
statistically significant and clinically meaningful excess weight
loss (EWL) outcome and excellent safety profile. This included an
average EWL of approximately 25% for VBLOC Therapy-treated patients,
with over 50% of those patients achieving at least a 20% EWL. While
the results demonstrated an excellent safety profile that met the
pre-specified study measures, with both a positive benefit-risk
equation and a medically meaningful and clinically significant effect
over the control group, the results did not meet the study's
predefined super-superiority efficacy endpoints. 
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 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
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 Maestro(R) System 
The Maestro(R) 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.  
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 studies; 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 studies; 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 study 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,     
                                                                            
                                 --------------------  -------------------- 
                                    2013       2012       2013       2012   
                                 ---------  ---------  ---------  --------- 
                                                                            
Sales                            $       -  $       -  $       -  $     312 
Cost of goods sold                       -          -          -        232 
                                 ---------  ---------  ---------  --------- 
      Gross profit                       -          -          -         80 
                                 ---------  ---------  ---------  --------- 
                                                                            
Operating expenses:                                                         
  Research and development           2,868      3,147     11,075     10,668 
  Selling, general and                                                      
   administrative                    3,506      3,614     13,659     11,961 
                                 ---------  ---------  ---------  --------- 
      Total operating expenses       6,374      6,761     24,734     22,629 
                                 ---------  ---------  ---------  --------- 
                                                                            
Operating loss                      (6,374)    (6,761)   (24,734)   (22,549)
Other income (expense), net           (199)      (266)    (1,047)      (911)
                                 ---------  ---------  ---------  --------- 
      Net loss                   $  (6,573) $  (7,027) $ (25,781) $ (23,460)
                                 =========  =========  =========  ========= 
                                                                            
  Net loss per share - basic and                                            
   diluted                       $   (0.11) $   (0.17) $   (0.47) $   (0.59)
                                 =========  =========  =========  ========= 
                                                                            
  Shares used to compute basic                                              
   and diluted net loss per                                                 
   share                            61,378     41,698     55,010     39,537 
                                 =========  =========  =========  ========= 
                                                                            
                                                                            

 
                              ENTEROMEDICS INC.                             
                        (A Development Stage Company)                       
              Condensed Consolidated Balance Sheets (unaudited)             
                               (in thousands)                               
                                                                            
                                                                            
                                                  December 31,  December 31,
                                                      2013          2012    
                                                 ------------- -------------
                                   ASSETS                                   
Cash, cash equivalents and short-term                                       
 investments                                     $      23,297 $      22,309
Restricted cash                                              0           200
Inventory                                                1,128         1,271
Prepaid expenses and other current assets                  564           624
Property and equipment, net                                577           610
Other assets                                               822         1,082
                                                  ------------  ------------
      Total assets                               $      26,388 $      26,096
                                                  ============  ============
                                                                            
                    LIABILITIES AND STOCKHOLDERS' EQUITY                    
Liabilities:                                                                
  Accounts payable                               $         127 $         341
  Debt                                                   6,868         9,684
  Other liabilities                                      4,714         4,196
                                                  ------------  ------------
      Total liabilities                                 11,709        14,221
Stockholders' equity                                    14,679        11,875
                                                  ------------  ------------
      Total liabilities and stockholders' equity $      26,388 $      26,096
                                                  ============  ============

  
Contact: 
EnteroMedics Inc. 
Greg S. Lea 
(651) 789-2860 
ir@enteromedics.com 
 
 
Press spacebar to pause and continue. Press esc to stop.