EnteroMedics (NASDAQ: ETRM) has received conditional approval from the FDA for its IDE application outlining plans for studying the safety and efficacy of its obesity treatment. The announcement sent the company's stock price up 47 percent to $2.70 per share, according to the Minneapolis/St. Paul Business Journal.
The company has developed the VBLOC vagal blocking therapy to offer doctors a less invasive alternative to existing surgical weight loss procedures. VBLOC therapy is delivered by the Maestro System through laparoscopically implanted leads to intermittently block the vagus nerves using high-frequency, low-energy electrical impulses, according to a company statement.
Morningstar analyst Debbie Wang says although the company has cleared the first hurdle with the FDA's nod, it would need money to move forward, Reuters notes. As of June 30, the company had $10 million in cash, cash equivalents and short-term investments.
The company also has announced plans to commercialize the Maestro RC System in Australia and expects to file an application for approval and listing with the country's Therapeutic Goods Administration (TGA) upon receiving CE Mark certification. EnteroMedics hopes to receive TGA approval during the second half of 2011 and will explore commercialization opportunities in other markets outside of the U.S.