If approved, EnteroMedics' ($ETRM) vagal nerve blocker would be the first new device to treat obesity in the U.S. in over a decade. But the FDA Gastroenterology and Urology Devices panel narrowly voted against its Maestro System on the crucial issue of efficacy in a 4-to-5 vote on June 17.
The microcap stock had been sinking going into the panel; posted panel documents showed that EnteroMedics had failed to meet either of its primary endpoints in a pivotal study of the Maestro System.
Trading was halted for EnteroMedics the day of the vote, but shares were up more than 15% in early trading during the morning after the panel. Shareholders were hopeful that the mixed panel results offered a glimmer of hope for approval.
Beyond the efficacy voting question, the panel also considered whether the relative benefits of the device outweigh the risks; the panel voted 6 to 2 in favor that they do. In addition, it also found the device to be safe in an 8-to-1 vote.
In the ReCharge Study, Maestro System-treated patients demonstrated excess weight loss at 12 months of 24.4%, sustained out to 18 months. The majority (52.5%) lost 20% or more of their excess weight, and almost a third of VBLOC Therapy treated patients lost 30% or more. Statistically significant improvements were observed in the treatment group in total cholesterol, LDL, triglycerides, systolic and diastolic blood pressure, heart rate and waist circumference.
But the 12-month data failed to demonstrate the FDA requirement of a 10% difference between therapy and placebo that is the agency's standard for obesity drug efficacy.
Major holders of EnteroMedics stock on March 31 included T. Rowe Price (4.1 million), Ardsley Advisory Partners (3.9 million), Wells Fargo (2.9 million), Royce & Associates (1.3 million), Vanguard Group (1.2 million), Iguana Healthcare Management (1.2 million), and MPM Asset Management (1.1 million).
A financing on the heels of the panel is already in the works. EnteroMedics filed with the SEC on June 13 to raise $25 million by selling shares through Cowen & Company.
- here is the EnteroMedics press release on the panel
- and the $25 million filing with the SEC