Canaccord Genuity Presentation August 11, 2011 Exhibit 99.1 |
Safe Harbor Statement 2 This presentation contains forward-looking statements about EnteroMedics Inc. Our actual results could differ materially from those discussed due to known and unknown risks, uncertainties and other factors including our limited history of operations; our losses since inception and for the foreseeable future; our lack of regulatory approval for our Maestro® System for the treatment of obesity; our preliminary findings from our EMPOWER™ pivotal trial; our ability to comply with the NASDAQ continued listing requirements; our ability to commercialize our Maestro System; our dependence on third parties to initiate and perform our clinical trials; the need to obtain regulatory approval for any modifications to our Maestro System; physician adoption of our Maestro System and VBLOC® vagal blocking therapy; our ability to obtain third party coding, coverage or payment levels; ongoing regulatory compliance; our dependence on third party manufacturers and suppliers; the successful development of our sales and marketing capabilities; our ability to raise additional capital when needed; international commercialization and operation; our ability to attract and retain management and other personnel and to manage our growth effectively; potential product liability claims; potential healthcare fraud and abuse claims; healthcare legislative reform; and our ability to obtain and maintain intellectual property protection for our technology and products. These and additional risks and uncertainties are described more fully in the Company's filings with the Securities and Exchange Commission, particularly those factors identified as "risk factors" in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 7, 2011. We are providing this information as of the date of this presentation and do not undertake any obligation to update any forward- looking statements contained in this document as a result of new information, future events or otherwise. |
EnteroMedics 3 Leader in neuroblocking with strong IP Data in >400 patients support VBLOC therapy as safe and effective in obesity. Promising results in type 2 diabetes – Clinically significant weight loss – Improvement in glycemic control – Reduction in blood pressure in hypertensive patients – Excellent safety, including cardiac ReCharge Pivotal Trial underway and enrolling – FDA encouragement to file IDE – High investigator enthusiasm Commercialization process started in Europe and Australia – CE Mark |
The Obesity Epidemic in the US 1/3 of US adults are obese – More than 72 million people in the US (Body Mass Index “BMI” >30) – 1 in 8 deaths in the US are caused by an overweight/obesity related illness – CDC estimates an overall economic cost of obesity of approximately $150 billion Approximately 26 million surgical candidates in the US (BMI>35) About 1% of eligible patients seek surgery – 220,000 bariatric procedures completed in the US in 2010 • Bypass accounts for about 55% of these procedures High priority for US government and major strategic players 4 |
Current Treatments Less Invasive More Invasive Pharmaceuticals Bariatric Surgery Serious safety concerns, esp. cardiac Adverse side-effects Less effective for morbid obesity – Limited weight loss – Unsustained effect Duration of use restrictions Bypass & sleeve surgery irreversible and risky All result in long-term complications and major lifestyle changes, e.g., dietary restrictions and nutritional deficiencies Adjustable gastric bands have added long-term follow-up burdens (e.g. vomiting, quarterly adjustments) 5 |
Role of the Vagus Nerve Vagus nerve controls: – Sensation of hunger – Expansion, fullness and emptying of stomach – Digestive enzyme secretion Severing the vagus nerve (vagotomy) causes: – Reduced appetite – Delayed stomach emptying – Prevention of weight gain The effects of vagotomy are not sustainable – The problem — accommodation, or “work around”, of permanent interruption – The solution — EnteroMedics’ proprietary intermittent block 6 80% of vagus nerve fibers send messages to the brain 20% of vagus nerve fibers send instructions from the brain |
VBLOC Therapy Delivered via the Maestro System VBLOC Therapy – First in class – non-punitive; direct effect on mechanism of metabolic disease – Intermittent neuroblocking technology blocks vagus nerve signals, therefore reducing hunger feelings and promoting earlier fullness – Subcutaneously implanted, pacemaker-like device with leads placed laparoscopically on the intra-abdominal vagal trunks 7 RC Commercial Device The implantation procedure and usage of the Maestro System carry some risks, such as the risk generally associated with laparoscopic procedures and those related to treatment as described in the EMPOWER clinical study informed consent. |
Protein Carbohydrates Fat 0 250 500 750 1000 1250 1500 1750 2000 2250 Pre-implant (n=10) 4 weeks (n=10) 12 weeks (n=8) 6 months (n=9) 20% 43% 37% 20% 44% 36% 23% 41% 22% 40% 38% Reduced Portion Size (40%) (35%) (30%) (25%) (20%) (15%) (10%) (5%) 0% 5% 10% 15% 20% 25% 30% % EWL from Implant Calories (kcal %) Reduced Calories Pre-implant 4 weeks 12 weeks 6 months 36% Source: VBLOC-I Sub-study., Flinders UMC, Adelaide, Australia Compelling Proof of Concept Earlier Fullness and Less Hunger (90)% (60)% (30)% 0% 30% 60% 90% Reduced hunger Therapy Initiation 4 weeks 12 weeks 6 months Earlier fullness Significant impact on hunger and fullness drives successful weight loss 8 |
Study Location # Patients ~400 Overall Study Duration (yrs) Efficacy ~ %EWL First Generation Maestro RF System VBLOC-1 OUS 31 0.5 14 (6 months) VBLOC-RF2 OUS 38 3 23 (2 years) (1) EMPOWER US 294 2/5 20 (2.5 years) (2) Second Generation Maestro RC System VBLOC-RC1 OUS 5 1/5 26 (1 year) VBLOC-DM2 OUS 28 1/5 25 (1.5 year) (3) ReCharge US 234 1/5 Enrolling Note: Conducted gastric function study as well in 12 patients 1) 18 patients 2) 107 patients 3) 22 patients Safety No therapy related SAEs; Low overall SAE rate Positive safety profile, including CV Efficacy Clinically significant weight-loss Control of major co-morbidities – Diabetes and hypertension Broad acceptance by surgeons and patients The Maestro System Clinical Experience 9 |
Pivotal Trials EMPOWER – 294 subjects Double blind, placebo controlled randomized trial BMI range 35 to 39.9 with co-morbidity; 40 to 45 with or without – Endpoints Primary efficacy: Greater efficacy in treated arm versus control arm Secondary efficacy: Greater proportion of treated subjects versus control reach >25% EWL Safety: Estimate procedure and safety adverse events ReCharge – Approximately 234 Subjects – Currently enrolling, completion 4Q11 10 |
Maestro System Usage equals RESULTS -40 -35 -30 -25 -20 -15 -10 -5 0 Implant 4 weeks 3 months 6 months 9 months 12 months More treatment = More weight loss < 6hr (n = 25) 6 - 9hr (n = 61) 9 - 12hr (n = 63) >12hr (n = 16) EMPOWER Trial Outcome Mean Excess Weight Loss (EWL) by Hours of Use in Treatment Group 11 “Dose Effect” shows clear correlation between average EWL and the number of hours of device use – Demonstrates efficacy – Important to FDA Placebo group result was nearly identical due to unanticipated therapeutic effect |
EMPOWER Trial Summary Both groups experienced significant, dose-dependent Excess Weight Loss (EWL) – EWL greater than 20% in the prescribed use group of both arms – An unanticipated therapeutic effect was seen in the placebo arm Safety endpoint met – No deaths, low 1-yr surgical revision rate and low serious adverse event rate – No therapy related serious adverse events – Excellent cardiac safety Long-term follow-up data continue to demonstrate that VBLOC Therapy works – At 24 months, > 9 hours daily use patients have an average EWL of ~23% (n=71) – Over two-thirds of patients remained in trial at two years – At 30 month, all patients, irrespective of hours of device use, have reached an average EWL of ~20% (n=107) FDA subsequently approved a second pivotal trial (ReCharge) 12 |
US RECHARGE Trial Pivotal Trial for US Approval Use next generation implantable device – More convenient – Hours of use controlled by device Placebo group receives non-active device – No charge delivered Approximately 234 morbidly obese subjects – 2:1 randomization – Treated group “on” for ~12 hrs per day Key trial end points at 12 months – Efficacy – Safety Enrolling 13 |
VBLOC –DM2 ENABLE Trial Diabetes and Hypertension Design: prospective, open-label, multi-center, 12 month trial Cohort: 28 patients with obesity and type 2 diabetes, 18 with hypertension Inclusion criteria: – BMI 30 to 40 kg/m – NIDDM, <12 yrs duration – HbA1c levels >7% to <10% – Absence of significant diabetic complications (e.g., gastroparesis). Data collection: weight loss (EWL), glycemic (FPG, HbA1c) and blood pressure control Analysis: weeks 1, 4 and 12; and 6, 12 and 18 months 14 2 |
VBLOC –DM2 ENABLE Trial %EWL Results 15 *N represents subjects using the device for 12 hours or more 35 25 20 15 -10 5 0 n=26 n=24 n=24 n=22 Implant 3 Months - - - - - 6 Months 12 Months 18 Months -30 |
Change in Fasting Glucose Week 1 Week 4 Week 12 6 Months 12 Months 18 Months At all time points, changes are significant with p<0.01 Baseline = 151.4 ± 6.5 mg/dl -60 -50 -40 -30 -20 -10 0 * n=27 * n=26 * n=25 * n=25 * n=12 * n=28 |
Change in HbA1c % 17 Week 1 Week 4 Week 12 6 Months 12 Months 18 Months |
Change in Diastolic Blood Pressure in Patients with Elevated DBP -20 -15 -10 -5 0 1 Wk 4 Wk 6 Mo 12 Mo 18 Mo At all time points statistically significant with p<.01 Baseline = 87.5 ± 2.2 mmHg Week 1 Week 4 6 Months 12 Months 18 Months n= 12 n= 12 n= 10 n= 10 n= 11 |
Change in Mean Arterial Pressure in Patients with Hypertension Week 1 Week 12 6 Months 12 Months 18 Months n= 15 n= 14 n= 13 n= 13 n= 14 At all time points statistically significant with p=.04 Baseline= 100.1 ± 2.4 mmHg -20 -15 -10 -5 0 |
No Change in Blood Pressure in Normotensive Patients -10 -8 -6 -4 -2 0 2 4 6 8 10 Week 1 Week 4 Week 12 6 Months 12 Months Baseline MAP = 89.0 ±1.1 mmHg -1.0 n=10 0.5 n=10 -1.8 n=10 -3.2 n=10 3.2 n=4 Week 1 Week 4 Week 12 6 Months 12 Months |
Significant Promise in Treatment of Metabolic Disease Diabetes and Hypertension Clinically significant effect of VBLOC on two major co-morbidities – Type 2 Diabetes Mellitus • About 26 million people in US and more than 220 million people worldwide have diabetes – Cardiovascular / blood pressure • About 74 million people in the US and 1 billion worldwide are effected by hypertension Improvements were immediate and sustained – Diabetes: • HbA1c reduced to below 7.0% Diabetes control level set by the American Diabetes Association – Blood pressure: • ~10mmHg reduction in mean arterial pressure and diastolic blood pressure • Durable through 18 months Excellent cardiovascular safety – Heart rate reduction – Blood pressure 21 |
Commercialization in Europe and Australia Australia – Historical leadership with new obesity treatments – Extensive clinical experience with the Maestro System • Australian Institute of Weight Control (AIWC) – Device Technologies Australia • Distributor • Regulatory and reimbursement support – TGA approval and first revenue targeted for 2H 2011 Europe – Clinical experience in two European centers – CE Mark approval for RC System – Commercialization activities are progressing in select European markets 22 |
Financial Summary Balance Sheet Data As of June 30, 2011 Cash and cash equivalents $27.4 million Total invested capital $171 million NASDAQ: ETRM Diluted Shares Outstanding As of June 30, 2011 Common Shares Warrants Options 2.0 million Diluted Shares Outstanding 52.1 million 23 27.9 million 22.2 million |
EnteroMedics Leader in neuroblocking with strong IP Data in >400 patients support VBLOC therapy as safe and effective in obesity. Promising results in type 2 diabetes – Clinically significant weight loss – Improvement in glycemic control – Reduction in blood pressure in hypertensive patients – Excellent safety, including cardiac ReCharge Pivotal Trial underway and enrolling – FDA encouragement to file IDE – High investigator enthusiasm Commercialization process started in Europe and Australia – CE Mark 24 |