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Roseville-based EnteroMedics cuts workforce 18%
The company, developing an implantable device to treat obesity, will eliminate 13 people's jobs.
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EnteroMedics Inc., considered one of the most promising local med-tech start-ups in recent years, said Monday it is laying off about 18 percent of its workforce.
The Roseville-based company, which is developing a pacemaker-like device to treat obesity, said the workforce reduction will help pare expenses and involves only positions that would have been underused in the next year or so.
Thirteen people will lose their jobs out of a workforce of 65 to 70 people, said Chief Financial Officer Greg Lea. "This is something we anticipated," he said.
Although the health care and med-tech sectors of the economy are often seen as recession-proof, this is the second layoff at a Twin Cities-area medical technology company in the past week. Eden Prairie-based SurModics last week said it was paring its workforce by 5 percent in a cost-cutting initiative.
EnteroMedics said the reduction announced Monday will lessen operating expenses about $2 million next year.
"This savings, together with our new credit facility, will put us in a position to permit our current capital to reach further in these challenging economic times, giving us more strategic flexibility as we reach key milestone dates over the next 12 months,'' said CEO Mark Knudson.
Last month, EnteroMedics closed on a $20 million loan to help fund a 300-patient clinical study testing its obesity-fighting device. The pivotal study is fully enrolled, and the results should be available by the third or fourth quarter of 2009. Submission of the company's application for approval by the Food and Drug Administration is expected shortly after that.
EnteroMedics went public in November 2007, raising about $40 million.
Janet Moore • 612-673-7752
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