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EnteroMedics secures $20 million loan for study
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A Roseville company that is developing a unique medical device to treat obesity has closed on a $20 million loan to help fund a clinical study testing the device.
EnteroMedics Inc. said Friday that the new loan, extended by Silicon Valley Bank, Western Technology Investment and Horizon Technology Management, will replace an existing debt agreement.
The loan will supplement $28.6 million in cash on the company's balance sheet to repay the existing working capital loan and fund an ongoing 300-patient clinical trial of its anti-obesity device, in addition to general corporate purposes.
EnteroMedics is developing a pacemaker-like device, implanted in the chest, that blocks electrical impulses to the vagus nerve, which tells the brain when the stomach is empty.
The pivotal study is fully enrolled, and the results should be available by the third or fourth quarter of 2009, according to Greg Lea, chief financial officer. Submission of the company's application for approval by the Food and Drug Administration will come shortly after that, he said.
EnteroMedics went public in November 2007, raising approximately $40 million. For the quarter ended Sept. 30, the company reported a net loss of $10.2 million.
CEO Mark Knudson said in a news release that the new financing "comes at a time of unprecedented market uncertainty" and is "a meaningful vote of confidence in the company and its technology."
EnteroMedics' stock closed up 26 cents, or 16 percent, at $1.86 on Friday.
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