EnteroMedics' Weighty Financing for Obesity
This article was originally published in Start Up
EnteroMedics recently earned the distinction of closing the second-largest financing for a private medical device company in 2006. Its success was undoubtedly due to the company's attractive position at the junction of two of the device industry's hottest markets: obesity and neuromodulation. EnteroMedics is developing an implantable impulse generator that it hopes will address multiple mechanisms in obesity.
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The merger of Accuray and TomoTherapy would combine two of the 11 medical device companies that went public in 2007, a class of companies that has produced mixed results.
In early October, EnteroMedics announced the preliminary results of its pivotaltrial on its vagal nerve blocking approach to obesity. The verdict: the study did not meet primary or secondary end points. This was the second neuromodulation company working in obesity (Medtronic was the first) to experience a disappointment in pivotal clinical trials after early results looked so good. Several neurostimulation companies are still targeting obesity. Should their investors be worried? Is this troubling news for the field of neuromodulation at large? Not surprisingly, executives from two neurostimulation companies--IntraPace and Leptos Biomedical--answer the questions simply: no and no.
While device companies didn't raise as much in venture capital over the course of 2006 as their biopharma counterparts did, they did close the gap considerably.