ST. PAUL, Minn., Oct. 3, 2017 /PRNewswire/ -- EnteroMedics
Inc. (NASDAQ:ETRM), a developer of minimally invasive medical
devices to treat obesity, metabolic diseases and other
gastrointestinal disorders, today announced that it has acquired
ReShape Medical, Inc., a privately-held medical technology company
that develops, manufactures and markets the ReShape Dual Weight
Loss Balloon®, an FDA-approved, minimally invasive intragastric
balloon designed to treat obesity patients with a body mass index
(BMI) between 30 and 40, with one or more related comorbid
conditions.
"We are pleased to announce this significant transaction, which
adds a new minimally invasive, revenue-generating technology to the
EnteroMedics portfolio," said Dan Gladney, President, Chief
Executive Officer and Chairman of the Board
of EnteroMedics. "The acquisition of the ReShape Dual
Weight Loss Balloon, which complements our existing products with a
non-surgical weight loss solution, expands our addressable market
and gives us yet another touch point along the continuum of care in
obesity."
"EnteroMedics and ReShape Medical are two innovative companies
that share a strong strategic focus on providing proprietary,
patient-friendly technologies to address the global obesity
epidemic," continued Gladney. "We look forward to combining the
complementary expertise and capabilities of both companies for the
benefit of our customers, patients, employees and
stockholders."
Under the terms of the agreement, the consideration paid by
EnteroMedics for ReShape Medical consists of 2,356,729 shares of
common stock, 187,772 shares of series C convertible preferred
stock (which will be convertible into 18,777,200 shares of common
stock upon the receipt of the required approval of EnteroMedics'
stockholders under NASDAQ rules), and approximately $5.0 million in cash, which amount will be
immediately used to pay ReShape Medical's outstanding senior
secured indebtedness and certain transaction expenses of ReShape
Medical. EnteroMedics agreed to hold a special meeting of its
stockholders by December 31, 2017 to
seek the required approval of the conversion of the series C
convertible preferred stock into shares of common stock.
Dan Gladney will continue as
President, Chief Executive Officer and Chairman of the Board of
EnteroMedics. EnteroMedics has agreed to add two designees of
ReShape Medical to the Board of Directors of EnteroMedics.
Michael Y. Mashaal, M.D. has joined
the Board effective as of the closing of the acquisition and one
additional ReShape Medical designee will be added at a later
date.
Conference Call and Webcast
EnteroMedics' management
team will host a conference call beginning today at 11:00am ET to discuss its acquisition of ReShape
Medical. Individuals interested in listening to the conference call
may do so by dialing 1-800-860-2442 for domestic callers or
1-412-858-4600 for international callers. To listen to a live
webcast or a replay, please visit the investor relations section of
the EnteroMedics website at www.enteromedics.com.
About EnteroMedics Inc.
EnteroMedics is a medical
device company focused on the development and commercialization of
technology to treat obesity and metabolic diseases. vBloc®
Neurometabolic Therapy, delivered by an FDA-approved pacemaker-like
device called the vBloc® System, is designed to help patients feel
full and eat less by intermittently blocking hunger signals on the
vagus nerve. EnteroMedics acquired the Gastric Vest System™ through
its acquisition of BarioSurg, Inc. in May
2017.
About ReShape Medical Inc.
Driven by a passion to
address the worldwide obesity epidemic, ReShape Medical developed
the first and only gastric balloon of its kind to be approved by
the U.S. Food and Drug Administration. The ReShape Integrated Dual
Balloon System involves a non-surgical weight loss procedure that
uses advanced balloon technology designed to help people with a
30-40 Body Mass Index (BMI), and at least one co-morbidity, lose
weight. The ReShape Procedure provides a new option for individuals
who have not succeeded at diet and exercise alone, and do not want
or do not qualify for bariatric surgery. Two connected balloons are
placed into the stomach during a short, outpatient endoscopic
procedure. The balloons remain in the stomach for six months and
are then removed. During balloon treatment, and for six more months
following removal of the balloons, the patient receives nutritional
counseling and access to exclusive tools to help them achieve their
weight loss goals. The ReShape Procedure was approved by the U.S.
Food and Drug Administration in July of 2015 and has been available
in Europe since 2011.
Important Information
EnteroMedics intends to
file a proxy statement and other relevant materials with
the Securities and Exchange Commission (the "SEC") to
obtain approval from EnteroMedics' stockholders of the
conversion of the series C convertible preferred stock issued in
connection with the acquisition of ReShape Medical into shares
of EnteroMedics common stock (the "Stockholder
Approval"). INVESTORS AND SECURITY HOLDERS ARE URGED TO READ
THE PROXY STATEMENT AND OTHER RELEVANT MATERIALS FILED WITH THE SEC
CAREFULLY IN THEIR ENTIRETY AS THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE STOCKHOLDER
APPROVAL. The proxy statement, any amendments or supplements
to the proxy statement and other relevant documents filed
by EnteroMedics with the SEC will be available
free of charge through the web site maintained by
the SEC at www.sec.gov or by calling
the SEC at telephone number 1-800-SEC-0330. Free copies
of these documents may also be obtained
from EnteroMedics' website
at www.enteromedics.com or by writing
to: EnteroMedics Inc., 2800 Patton Road, St. Paul,
Minnesota 55113, Attention: Investor Relations.
EnteroMedics and its directors and executive officers are
deemed to be participants in the solicitation of proxies from the
stockholders of EnteroMedics in connection with the
Stockholder Approval. Information
regarding EnteroMedics' directors and executive officers
is included in EnteroMedics' definitive proxy statement
for its 2017 annual meeting of stockholders held on June 1,
2017, which was filed with the SEC on April 27,
2017.
Other information regarding the participants in such proxy
solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be included in
the proxy statement to be filed in connection with the Stockholder
Approval.
Forward-Looking Safe Harbor Statement:
This press
release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements generally can be identified by the use
of words such as expect," "plan," "anticipate," "could," "may,"
"intend," "will," "continue," "future," other words of similar
meaning and the use of future dates. Forward-looking statements in
this release include statements about the benefits of the
acquisition and the combined company's plans, objectives,
expectations and intentions with respect to future operations,
products and services. These forward-looking statements are based
on the current expectations of our management and involve known and
unknown risks and uncertainties that may cause our actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by
the forward-looking statements. Applicable risks and uncertainties
related to the acquisition include, but are not limited to, the
following: the acquisition may involve unexpected costs or
liabilities; the ability to recognize benefits of the acquisition;
and risks that the merger disrupts current plans and operations.
Additional risks and uncertainties include, among others: 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; the competitive industry in which we operate;
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;
the cost and management time of operating a public company;
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 Exhibit
99.3 of our current report on Form 8-K filed July 26, 2017. 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.
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SOURCE EnteroMedics Inc.