EnteroMedics Doubles Sales But Loses $23.4M In 2016
Sales of EnteroMedics’ obesity treatment devices more than doubled in 2016, but did little to overcome its operating expenses for the year, leading to a $23.4 million loss.
The Roseville-based company posted $786,600 in sales in its fiscal 2016 year, compared to $292,000 the year prior. Sales during the last three months of 2016, however, fell year-over-year from $149,000 to $141,900.
EnteroMedics has struggled financially for years to break out of the red, despite its flagship vBloc System — a pacemaker-shaped device that uses neuromodulation technology to reduce a patient’s hunger level — proven to be clinically effective. Although a ramp-up of commercialization and marketing efforts helped push EnteroMedics to its best sales year ever, what continues to hurt the company is the vBloc System’s lack of coverage by any major insurer.
Currently, patients fitted with the device reportedly incur out-of-pocket expenses exceeding $18,000. While some insurance companies are said to cover portions of the cost, none offer full coverage or will pay the majority of the bill.
What most helped EnteroMedics improve upon its $25.5 million loss from last year was the trimming of operating expenses. Over the course of 2016, the company cut back on its general and administrative expenses and research and development expenses to the tune of $2 million and $3 million, respectively.
“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,” said Scott Youngstrom, who is both EnteroMedics’ chief financial officer and chief operating officer. “Paramount to our continued success will be maintaining a strong financial position.”
Youngstrom also cited recent activities, like completing a $19 million public offering round and regaining NASDAQ compliance, as measures the company has taken to improve its financial situation.
“We have entered 2017 with strong momentum which will be crucial as we execute on our goal of achieving broad reimbursement for [the vBloc System],” Dan Gladney, CEO of EnteroMedics, said in a statement.
Investors responded favorably to the company’s end of year report. EnteroMedics shares are up about 4 percent from its Tuesday close.