Blog Coverage: EnteroMedics Acquires Gastric Vent System(TM); Expects the Device to be Accretive to Its vBloc System(TM)

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LONDON, UK / ACCESSWIRE / May 25, 2017 / Active Wall St. blog coverage looks at the headline from EnteroMedics Inc. (NASDAQ: ETRM) as the Company announced on May 23, 2017, that it has acquired the Gastric Vest System™, through its acquisition of BarioSurg, Inc. EnteroMedics is a leading developer of medical devices treating obesity, metabolic diseases, and other gastrointestinal disorders. BarioSurg, founded by Dr. Raj Nihalani in 2008, was a privately held medical device Company known for its Gastric Vent System™, used to treat obesity and related comorbidities. Register with us now for your free membership and blog access at:

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One of EnteroMedics’ competitors within the Medical Appliances & Equipment space, Steris PLC (NYSE: STE), announced on May 09, 2017, its financial results for Q4 FY17 ending March 31, 2017. AWS will be initiating a research report on Steris in the coming days.

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The Announcement

EnteroMedics expects the BarioSurg’s Gastric Vest to be accretive to its differentiated portfolio of medical devices for fighting obesity and related comorbidities, and to explore potential clinical opportunities to combine the Vest and vBloc Therapy. The Company is exploring new dimensions of comprehensive bariatric and metabolic continuum to effectively address unmet needs within these areas. Raj Nihalani, MD, provided an outlook on the ways under which Vest may be combined with vBloc Therapy to enhance patient outcomes. It would navigate the Company on a path towards potential FDA approval and eventual commercialization of the portfolio.

The consideration offered by EnteroMedics to BarioSurg consists of 1.38 million unregistered shares of EnteroMedics’ common stock, 1.0 million unregistered shares of conditional convertible preferred stock, and $2.0 million in cash. The net 1.0 million unregistered shares of conditional convertible preferred stock will be convertible into 5.0 million unregistered shares of common stock upon the receipt of approval of EnteroMedics’ stockholders.

Gastric Vest System™

The Gastric Vest is an investigational, minimally invasive, laparoscopically implanted medical device being studied for weight loss in morbidly obese patients. The device, which wraps around the stomach and emulates the effect of conventional weight loss surgery, enables gastric volume reduction without permanently changing patient anatomy. According to a pilot study, conducted outside the US, at 12 months, Vest patients reported a mean percent excess weight loss (%EWL) of 85%, an average drop in HbA1c (Hemoglobin A1c) of 2.1 points, and an average waist circumference reduction of 38 centimeters, or about 15 inches.

Based on early results, when comparing short-term %EWL, the Gastric Vest appears to perform as well as, and possibly better than, gastric bypass and sleeve gastrectomy procedures. If the Vest continues to yield similar results to those observed to date, it will be a game changer in the field of bariatrics according to Scott Shikora, Chief Medical Consultant at EnteroMedics.

EnteroMedics Growth Portfolio

EnteroMedics is a unique Company which uses neuroblocking technology to treat obesity, metabolic diseases, and other gastrointestinal disorders. The Company’s vBLoc System has received US Food and Drug Administration’s approval and CE mark. Vbloc Neurometabolic Therapy is delivered by a pacemaker-like device called the vBloc System and is designed to intermittently block the vagus nerves using high-frequency, low-energy electrical impulses.

Earnings Highlights

On May 16, 2017, the Company announced its Q1 FY17 results for the period ending March 31, 2017. For Q1 FY17, EnteroMedics reported a net loss of $7.4 million, or $1.27 per shares. The Company has been reducing costs to cut down on its loss, and recently, in Q4 FY16, EnteroMedics rebuilt its capital structure through expense reduction and resumed vBloc Therapy commercial operations with sales expected to pick up in the next three quarters of FY17.

Stock Performance

On Wednesday, May 24, 2017, EnteroMedics’ shares were marginally down 0.59%, finishing the day at $5.05 with volume of 722.70 thousand shares exchanging hands by the close of the trading session. In the last month and previous six months, shares of the Company have soared 21.69% and 59.96%, respectively. Moreover, the stock skyrocketed 152.50% since the start of the year. At Wednesday’s closing price, the stock’s net capitalization stands at $35.70 million.

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