ST. PAUL, Minn., March 7, 2017 /PRNewswire/ -- 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, 2016.
"2016 was an outstanding year for EnteroMedics marked by
substantial progress across multiple fronts as we continued to work
toward expanding the reach of vBloc® Therapy," said
Dan Gladney, Chief Executive Officer
of EnteroMedics. "Through our expanded agreement with Academy
Medical, LLC, the numerous first-hand commercial patient success
stories we've had the privilege of sharing, and the continued
publication of long-term data reinforcing the effectiveness and
safety of vBloc Therapy, we have entered 2017 with strong momentum
which will be crucial as we execute on our goal of achieving broad
reimbursement coverage for this cutting edge therapy. We look
forward to sharing our continued progress throughout the
year."
Scott Youngstrom, Chief Financial
Officer and Chief Operating Officer of EnteroMedics, added:
"Paramount to our continued success will be maintaining a strong
financial position. Since I joined the company in early October, we
have taken numerous steps to ensure such standing, including the
successful completion of a $19.0
million public offering, completion of the retirement of
$18.75 million of convertible notes,
and regaining compliance with the Nasdaq Capital Market listing
requirements. We believe that the simplified capital structure
we've cultivated in combination with careful expense management
leaves us well positioned for success in the coming year."
Recent Highlights
- Announced vBloc Therapy Available to U.S. Veterans at U.S.
Department of Veterans Affairs (VA) Medical Facilities through
Partnership with Academy Medical. In October 2016, the Company announced that vBloc
Therapy was added to Academy Medical's five-year sole source
agreement with the U.S. Department of Veterans Affairs that allows
any VA surgeon in the U.S. to purchase the vBloc System from
Academy Medical under a national contract. This is made possible
through the previously-announced EnteroMedics partnership with
Academy Medical, LLC, a certified Service-Disabled Veteran-Owned
Small Business specializing in the distribution of medical products
to VA and Department of Defense (DoD) facilities.
- Live Rescue Surgery Implanting vBloc Therapy for Failed
Gastric Sleeve Broadcasted at ObesityWeek 2016 Conference. In
November 2016, Sachin Kukreja, M.D., Director of Bariatric
Surgery, VA North Texas Health Care System, performed a live
adjunctive rescue surgery using the Company's vBloc Therapy on a
patient for whom past gastric sleeve surgery failed to sustain
weight loss benchmarks. The procedure was broadcasted to attendees
at ObesityWeek 2016.
- Announced Commercial Patient Success of vBloc Therapy in
Combination with vBloc Achieve. In December 2016, the Company announced an
assessment of real-world, clinical practice weight loss data in
patients using the Company's vBloc Therapy in combination with
vBloc Achieve, which confirmed previously reported positive results
from the ReCharge Pivotal Trial. These data show similar mean
percent total weight loss (TWL) through six (9%) and nine months
(10%) as compared to results from the rigorous ReCharge Pivotal
Trial (9% at 6 months; 10% at 9 months). The data were collected at
vBloc Institutes across the United States. vBloc Institutes
are facilities that have integrated vBloc Therapy and vBloc Achieve
into their practices.
- Expanded Availability of vBloc Therapy to Two Additional
vBloc Institutes. In January
2017, the Company announced the addition of two new vBloc
Institutes: MedStar Health in Maryland and Roper St. Francis in South Carolina. In order to qualify as a vBloc
Institute, a medical center or hospital system must have integrated
the Company's vBloc Therapy and its vBloc Achieve support program
into its practice. MedStar Health and Roper St. Francis are the
twelfth and thirteenth vBloc Institute programs to have integrated
vBloc Therapy and vBloc Achieve, a comprehensive, personalized
weight loss support program to help vBloc patients reach and
maintain health goals, into their practice.
- Announced Closing of $19.0
Million Underwritten Public Offering. In January 2017, the Company announced the closing
of an underwritten public offering of common stock and warrants for
gross proceeds of $19.0 million,
which includes the full exercise of the underwriters'
over-allotment option, prior to deducting approximately
$2.5 million of underwriting
discounts and commissions and offering expenses payable by
EnteroMedics.
- Announced Publication of Three-Year Data from vBloc Diabetic
Patient Study. In February 2017,
the Company announced the publication of three-year data from the
VBLOC DM2 Study of vBloc Therapy in obese patients with Type 2
diabetes. Results from the study demonstrate that after three
years, the average percentage excess weight loss (%EWL) was 21%
with reductions in hemoglobin A1c (HbA1c) of 0.6 percentage points
from a baseline of 7.8%. This clinically meaningful reduction in
HbA1c resulted in 39% of participants either reducing or stopping
their diabetes medications. Additionally, 71% of study participants
were at or below the American Diabetes Association target for HbA1c
for people with diabetes of 7%. Also at three years, mean estimated
fasting plasma glucose was significantly decreased by 18 mg/dL from
151 mg/dL at baseline. The publication, entitled "Vagal Nerve Block
for Improvements in Glycemic Control in Obese Patients with Type 2
Diabetes Mellitus: Three-Year Results of the VBLOC DM2 Study," was
published in the Journal of Diabetes and Obesity and is
available online here.
- Regained Compliance with Nasdaq Listing Requirement. In
February 2017, the Company announced
that Nasdaq issued a determination that the Company has evidenced
compliance with all requirements for continued listing on The
Nasdaq Capital Market and, accordingly, the listing qualifications
matter was closed. In December 2016,
the Company announced a 1-for-70 reverse stock split of its common
stock as well as the retirement of the last of its $18.75 million of Senior Amortizing Convertible
Notes, both of which events were vital in regaining
compliance.
Financial Results
For the three months ended December 31,
2016, the Company reported sales of $141,900, gross profits totaling $52,500, and a net loss of $4.4 million, or $2.65 per share, including selling, general and
administrative expenses of $2.9
million and research and development expenses of
$1.3 million. The $4.2 million of operating expenses compares to
$7.6 million for the comparable
quarter of 2015. This reflects the commitment made by the
Board and management to reduce expenses and make every effort to
maintain its Nasdaq compliance requirements.
For the full year ended December 31,
2016, the Company reported sales of $787,000 with gross profits totaling $355,000. For the full year ended
December 31, 2016, the Company
reported a net loss of $23.4 million,
or $37.53 per share.
On December 31, 2016, the
Company's cash, cash equivalents and short-term investments totaled
$3.3 million.
Conference Call Details
The Company will host a conference call today, Tuesday, March 7, 2017 at 11:00 AM Eastern Time. The conference call may be
accessed by dialing (877) 280-7473 (U.S. and Canada) or (707) 287-9370 (international), and
entering passcode 75853218. A replay of the call will be available
from March 7, 2017 at 2:00 PM Eastern Time through March 14, 2017 at 3:00 PM
Eastern Time by dialing (855) 859-2056 (U.S. and
Canada) or (404) 537-3406
(international) and entering passcode 75853218.
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.
vBloc® Neurometabolic Therapy, delivered by a
pacemaker-like device called the vBloc® System, is
designed to intermittently block the vagus nerves using
high-frequency, low-energy, electrical impulses. EnteroMedics'
vBloc® System has received U.S. Food and Drug
Administration approval and CE Mark.
Information about the Maestro® Rechargeable System
and vBloc® Neurometabolic Therapy
You should not have an implanted vBloc® System
if you have cirrhosis of the liver, high blood pressure in the
veins of the liver, enlarged veins in your esophagus or a
significant hiatal hernia of the stomach; if you need magnetic
resonance imaging (MRI); if you have a permanently implanted,
electrical medical device; or if you need a diathermy procedure
using heat. The most common related adverse events that were
experienced during clinical study of the vBloc System included
pain, heartburn, nausea, difficulty swallowing, belching, wound
redness or irritation, and constipation.
Talk with your doctor about the full risks and benefits of vBloc
Therapy and vBloc System. For additional prescribing information,
please visit www.enteromedics.com.
If you are interested in learning more about vBloc
Neurometabolic Therapy, please visit www.vbloc.com or
call 1-800-MY-VBLOC.
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 limited commercial sales experience with our
vBloc® System for the treatment of obesity in the
United States or in any foreign market other
than Australia and the European Community; our ability to
maintain compliance with the Nasdaq continued listing requirements;
our ability to commercialize our vBloc® System; our
dependence on third parties to initiate and perform our clinical
trials; the need to obtain regulatory approval for any
modifications to our vBloc® System; physician adoption
of our vBloc® System and vBloc®
Neurometabolic 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 28, 2016. 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.
(See attached tables)
ENTEROMEDICS
INC.
|
Consolidated
Statements of Operations (unaudited)
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
141,900
|
$
|
149,000
|
$
|
786,660
|
$
|
292,000
|
Cost of goods
sold
|
|
89,406
|
|
70,938
|
|
431,476
|
|
125,047
|
|
|
Gross profit
|
|
52,494
|
|
78,062
|
|
355,184
|
|
166,953
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
2,893,228
|
|
5,939,525
|
|
17,981,525
|
|
19,892,424
|
|
Research and
development
|
|
1,289,908
|
|
1,689,917
|
|
5,169,286
|
|
8,141,323
|
|
|
Total operating
expenses
|
|
4,183,136
|
|
7,629,442
|
|
23,150,811
|
|
28,033,747
|
|
|
Operating
loss
|
|
(4,130,642)
|
|
(7,551,380)
|
|
(22,795,627)
|
|
(27,866,794)
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
846
|
|
373
|
|
5,837
|
|
1,819
|
|
Interest
expense
|
|
(710,629)
|
|
(98,691)
|
|
(4,104,003)
|
|
(939,182)
|
|
Change in value of
warrant liability
|
|
182,562
|
|
879,093
|
|
3,512,816
|
|
3,295,536
|
|
Change in value of
convertible notes payable
|
|
200,004
|
|
—
|
|
—
|
|
—
|
|
Other, net
|
|
23,405
|
|
313
|
|
20,133
|
|
9,874
|
|
|
Net loss
|
$
|
(4,434,454)
|
$
|
(6,770,292)
|
$
|
(23,360,844)
|
$
|
(25,498,747)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share -
basic and diluted
|
$
|
(2.65)
|
$
|
(66.70)
|
$
|
(37.53)
|
$
|
(298.97)
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to
compute basic and diluted net loss
per share*
|
|
1,672,344
|
|
101,502
|
|
622,431
|
|
85,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Adjusted for 1:70
reverse stock split effective December 28, 2016
|
ENTEROMEDICS
INC.
|
Condensed
Consolidated Balance Sheets (unaudited)
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
2016
|
|
2015
|
ASSETS
|
Cash, cash
equivalents and short-term investments
|
$
|
3,311
|
$
|
7,927
|
Accounts
Receivable
|
|
144
|
|
58
|
Inventory
|
|
1,790
|
|
1,686
|
Prepaid expenses and
other current assets
|
|
476
|
|
831
|
Property and
equipment, net
|
|
201
|
|
326
|
Other
assets
|
|
1,119
|
|
759
|
|
|
Total
assets
|
$
|
7,041
|
$
|
11,587
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
1,312
|
$
|
172
|
|
Debt
|
|
-
|
|
1,267
|
|
Other
liabilities
|
|
2,790
|
|
6,475
|
|
|
Total
liabilities
|
|
4,102
|
|
7,914
|
Stockholders'
equity
|
|
2,939
|
|
3,673
|
|
|
Total liabilities and
stockholders' equity
|
$
|
7,041
|
$
|
11,587
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/enteromedics-reports-fourth-quarter-2016-financial-results-300418985.html
SOURCE EnteroMedics Inc.