EnteroMedics slips as FDA reviews obesity system
EnteroMedics declines as FDA asks questions about obesity-treating Maestro system
NEW YORK (AP) -- Shares of EnteroMedics declined Tuesday on concerns about its Maestro system, which is designed to treat obesity by blocking nerves with electrical impulses.
THE SPARK: EnteroMedics said the Food and Drug Administration is asking additional questions about the Maestro Rechargeable System. The St. Paul, Minn., company said regulators want more information about device testing and clinical data, including training programs for users and a study of the device after it is approved. EnteroMedics said the response was standard and that it will respond to the FDA's questions within the coming weeks.
EnteroMedics said it expects an FDA panel to review the Maestro system late in the fourth quarter of 2013 or early in the first quarter, and it expects the FDA to make a decision in the first half of 2014.
THE BIG PICTURE: The Maestro system is an implant designed to deliver intermittent electrical stimulation to the vagus nerve, making patients feel less hungry and more satisfied. EnteroMedics said the device's two electrodes are implanted in laparoscopic surgical procedures, which could make the device system a less invasive alternative to other weight-loss surgeries. The device has an external battery that needs to be recharged weekly. EnteroMedics Inc. compares it to a pacemaker.
The system is approved in Europe and Australia, but not the U.S. EnteroMedics describes Maestro as its first product. The company's shares tumbled in February after EnteroMedics reported disappointing clinical trial results. It said patients who were implanted with the Maestro device lost more weight than patients who received a sham device, but the weight loss totals were not as good as it had hoped.
THE ANALYSIS: Roth Capital Partners analyst Chris Lewis said the review process is "on track" and that the FDA didn't put up any major obstacles to the Maestro system. He rates EnteroMedics shares "Buy."
SHARE ACTION: EnteroMedics shares lost 3 cents, or 2.5 percent, to $1.18 in afternoon trading. The stock has fallen 57.4 percent since Feb. 7.
