EnteroMedics Nets $27.6M From Public Offering
EnteroMedics, Inc., said Tuesday that it netted about $27.6 million from its recently closed public stock offering.
The Roseville-based medical device startup said that it closed its offering of 17.02 million shares of common stock-which were priced at $1.75 per share.
EnteroMedics intends to use its net proceeds to continue working to gain U.S. regulatory approval of its Maestro RC System-and for international commercialization, clinical and product development, and other working capital and “general corporate purposes.”
The Maestro System intermittently blocks the vagus nerve-which tells the brain when the stomach is empty-by using high-frequency, low-energy electrical impulses. It was designed to control hunger and project feelings of fullness by blocking the impulses that make people overeat.
In October 2009, the company said that preliminary results of a Maestro System study showed that patients treated with the device lost about the same amount of weight as those treated with a placebo, news that sent its stock down 75 percent and prompted the company to cut employees. But a month later, EnteroMedics said that additional information found that the device works but that its effectiveness is directly tied to duration of use-a correlation that still held true following more recent studies, the company said in June.
In August, the company got approval from the U.S. Food and Drug Administration to conduct a new trial for the second-generation Maestro System. EnteroMedics plans to start the trial in the second half of 2011.
Shares of EnteroMedics have varied greatly in price over the past year, ranging between $1.52 and $8.64. Shares were trading down 2.7 percent at $2.51 on Thursday morning.
EnteroMedics, which became public in 2007, was launched in 2002. The company reported a $32 million net loss, or $1.07 per share, in 2009.