The BarioSurg device is designed to be implanted via laparoscopy to wrap the stomach and emulate the effects of conventional bariatric surgery by temporarily reducing the stomach’s volume.
St. Paul, Minn.-based EnteroMedics said it paid 1.38 million shares (worth $6.3 million at yesterday’s $4.59 closing price), plus 1 million convertible shares that can be changed into 5 million shares if shareholders approve and $2 million in cash. The shares issued in the deal amount to about 20% of EnteroMedics shares, the company said.
“We are excited to both incorporate BarioSurg’s gastric vest into our now further differentiated portfolio of medical devices for fighting obesity and related comorbidities, and to explore potential clinical opportunities to combine the vest and vBloc therapy,” EnteroMedics chairman, president & CEO Dan Gladney said in prepared remarks. “As we move toward building a comprehensive bariatric and metabolic continuum of care platform to effectively address unmet needs within these areas, we believe that the strong foundation we’ve built at EnteroMedics will maximize the potential for a successful approval and the subsequent commercialization of this device.”
“EnteroMedics is a leader in minimally-invasive, sustainable weight loss treatment with vBloc Therapy. I look forward to joining the company and navigating a path toward potential FDA approval and eventual commercialization, while at the same time exploring ways in which the vest may be able to be combined with vBloc therapy to enhance patient outcomes,” added BarioSurg founder & CEO Dr. Raj Nihalani, who was named chief technology officer at EnteroMedics as part of the deal.
News of the deal sent ETRM shares up 29.9% to $5.96 apiece today ahead of the market’s open.