This Cooperation Agreement involves
Title: EnteroMedics Reports Third Quarter 2010 Financial Results Signs Cooperation Agreement with Australian Institute of Weight Control (AIWC)
Industry: Medical Equipment and Supplies Sector: Healthcare
Greg S. Lea
EnteroMedics Reports Third Quarter 2010 Financial Results
Signs Cooperation Agreement with Australian Institute of Weight Control (AIWC)
ST. PAUL, Minnesota, October 21, 2010 – EnteroMedics Inc., (NASDAQ: ETRM), the developer of medical devices using neuroblocking technology to treat obesity and other gastrointestinal disorders, today announced financial results for the three and nine months ended September 30, 2010.
For the three months ended September 30, 2010, the Company reported a net loss of $4.4 million, or $0.59 per share, including research and development expenses of $2.3 million and general and administrative expenses of $1.8 million. For the nine months ended September 30, 2010, the Company reported a net loss of $13.4 million, or $1.81 per share. Operating expenses were primarily associated with the cost of supporting the Company’s multiple, ongoing clinical trials and the continued development of VBLOC® vagal blocking therapy delivered through the Company’s Maestro® System. On September 30, 2010, the Company’s cash, cash equivalents and short-term investments together with the remaining proceeds from the Series A Non-Voting Convertible Preferred Stock offering received shortly after September 30, 2010 totaled $13.3 million.
The Company also announced today that it has entered into a cooperation agreement with the Australian Institute of Weight Control (AIWC), a network of bariatric clinics specializing in laparoscopic weight loss surgery and clinical research for the morbidly obese. AIWC will be the first clinics in Australia to implant the Maestro System when it has received approval by the Australian Therapeutic Goods Administration (TGA). In addition to clinical use of the Maestro System, the agreement includes objectives related to support of the commercialization of VBLOC Therapy and the Maestro Rechargeable (RC) System in Australia and worldwide through cooperation in training, accreditation and research.
“The third quarter was an important period for EnteroMedics, as we achieved key financial, regulatory and commercialization objectives in our effort to deliver a safe and effective surgical treatment option for obesity,” said President and Chief Executive Officer Mark B. Knudson, Ph.D. “Clinical data continues to validate our approach, demonstrating VBLOC Therapy’s ability to achieve clinically meaningful weight loss and significant improvements in hypertension and diabetes with no therapy
related serious adverse events. Our agreement with the AIWC, Australia’s largest network of bariatric surgical clinics, marks an important step toward the successful commercialization of the Maestro System in a major international market. We remain focused on our commercialization strategy within this market while developing a clinical pathway toward regulatory approval in the U.S.”
Greg S. Lea, Senior Vice President and Chief Financial Officer, added “EnteroMedics recently completed a $6.3 million Series A Non-Voting Convertible Preferred Stock offering, bringing our available cash to $13.3 million. This capital provides us with the continued ability to support multiple ongoing clinical studies and explore commercialization of the Maestro System in key international markets.”
AIWC Cooperation Agreement
Under the cooperation agreement, EnteroMedics has designated AIWC and AIWC Member Clinics as authorized training and implantation centers for EnteroMedics products. The AIWC will work with EnteroMedics to provide research, communications, training and accreditation support related to the Maestro RC System in Australia and other international territories. Further, the two organizations will work toward Australian Therapeutic Goods Administration (TGA) approval of the Maestro RC System and collaborate on subsequent marketing and distribution efforts within this territory. The AIWC will also support EnteroMedics’ efforts in gaining reimbursement for the private sector through the Medical Services Advisory Committee (MSAC) in Australia.
On August 2, 2010, EnteroMedics announced its plans to commercialize the Maestro RC System in Australia and its plans to file an application for approval and listing with the Australian Therapeutic Goods Administration upon receipt of CE Mark certification for the Maestro RC System. EnteroMedics hopes to receive TGA approval during the second half of 2011. The Company continues to explore commercialization opportunities in other markets outside of the United States.
About the AIWC
The AIWC is a network of multi disciplinary weight loss surgical clinics specializing in laparoscopic weight loss surgery for the morbidly obese. It consists of three partner clinics in Adelaide, Perth and Sydney, with expansion plans for other centers in Australia. The AIWC works with public and private organizations to develop treatment platforms for the morbidly obese, striving for continual clinical improvement through leadership research and training programs. The AIWC performed more than 1,250 bariatric procedures in 2009 and has a base of over 7,000 patients. The bariatric surgeons of the AIWC were among the first in the world to implant the Maestro System and have participated in all of EnteroMedics’ clinical studies to date.
About Obesity in Australia
According to the Australian Bureau of Statistics, in 2008 sixty-two percent of all adults in Australia were either overweight (BMI > 25) or obese (BMI > 30). It is estimated that by 2025, 7.2 million Australians could be obese. The Australian Federal Minister has declared obesity a national priority, with obesity related costs exceeding $21 billion annually. Approximately 13,900 bariatric surgeries were performed in Australia in 2008.
About EnteroMedics Inc.
EnteroMedics is a development stage medical device company focused on the design and development of devices that use neuroblocking technology to treat obesity and other gastrointestinal disorders. EnteroMedics’ proprietary neuroblocking te