EnteroMedics Sales, Profits Fall Sharply in Q2
Weight-loss device maker EnteroMedics Inc. reported a $6.8 million loss for its second quarter on Tuesday.
Sales of the company’s products, including its vBloc device, a pacemaker-shaped unit designed to curb hunger by manipulating nerve signals between the brain and body, fell sharply during the April to June period. Altogether, its revenues were $93,060 for the quarter, roughly one-third of the $276,000 it posted a year ago.
With an uptick in expenses, Roseville-based EnteroMedics’ net loss increased by 37 percent. Compared to the year-ago quarter, it lost nearly $5 million.
The company’s flagship vBloc device has struggled to take off, despite receiving FDA approval and showing success in clinical trials. That can largely be attributed to one reason: a lack of coverage from major insurers.
Because of that, patients fitted with the vBloc System can incur out-of-pocket expenses of $19,000, which is the approximate list price of the device before hospital fees. Certain insurance companies have opted to cover none or a portion of the bill.
In an effort to boost company sales down the road, EnteroMedics made a strategic acquisition in May for BarioSurg Inc. Investors responded favorably to the move, which netted EnteroMedics the Gastric Vest System, a complementary weight loss device that has shown strong clinical results but has yet to receive FDA approval.
“I am incredibly proud of what we have accomplished at EnteroMedics in these past few months,” president and CEO Dan Gladney said in a statement. “The programs we have put into place combined with the strategic and operational progress at the company position EnteroMedics to become a premier provider of products to address the continuum of care in obesity.”
Shares of EnteroMedics were down about 4 percent on Tuesday.