ReShape Lifesciences 8K Regulation FD Disclosure | SEC 11 Aug 11

Canaccord Genuity Presentation

August 11, 2011

Exhibit 99.1

Safe Harbor Statement

This

presentation

contains

forward-looking

statements

about

EnteroMedics

Inc.

Our

actual

results

could

differ

materially

from

those

discussed

due

known

and

unknown

risks,

uncertainties

and

other

factors

including

our

limited

history

operations;

our

losses

since

inception

and

for

the

foreseeable

future;

our

lack

regulatory

approval

for

our

Maestro®

System

for

the

treatment

obesity;

our

preliminary

findings

from

our

EMPOWER™

pivotal

trial;

our

ability

comply

with

the

NASDAQ

continued

listing

requirements;

our

ability

commercialize

our

Maestro

System;

our

dependence

third

parties

initiate

and

perform

our

clinical

trials;

the

need

obtain

regulatory

approval

for

any

modifications

our

Maestro

System;

physician

adoption

our

Maestro

System

and

VBLOC®

vagal

blocking

therapy;

our

ability

obtain

third

party

coding,

coverage

payment

levels;

ongoing

regulatory

compliance;

our

dependence

third

party

manufacturers

and

suppliers;

the

successful

development

our

sales

and

marketing

capabilities;

our

ability

raise

additional

capital

when

needed;

international

commercialization

and

operation;

our

ability

attract

and

retain

management

and

other

personnel

and

manage

our

growth

effectively;

potential

product

liability

claims;

potential

healthcare

fraud

and

abuse

claims;

healthcare

legislative

reform;

and

our

ability

obtain

and

maintain

intellectual

property

protection

for

our

technology

and

products.

These

and

additional

risks

and

uncertainties

are

described

fully

the

Company's

filings

with

the

Securities

and

Exchange

Commission,

particularly

those

factors

identified

"risk

factors"

our

Annual

Report

Form

10-K

filed

with

the

Securities

and

Exchange

Commission

March

2011.

are

providing

this

information

the

date

this

presentation

and

not

undertake

any

obligation

update

any

forward-

looking

statements

contained

this

document

result

new

information,

future

events

otherwise.

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

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

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)

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

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

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

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%)

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)%

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

Study

Location

# Patients

~400 Overall

Study

Duration (yrs)

Efficacy

~ %EWL

First Generation Maestro RF System

VBLOC-1

OUS

0.5

14 (6

months)

VBLOC-RF2

OUS

23 (2 years)

(1)

EMPOWER

294

2/5

20 (2.5 years)

(2)

Second Generation Maestro RC System

VBLOC-RC1

OUS

1/5

26 (1 year)

VBLOC-DM2

OUS

1/5

25 (1.5 year)

(3)

ReCharge

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

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

Maestro System

Usage equals RESULTS

-40

-35

-30

-25

-20

-15

-10

-5

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

“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)

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

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

VBLOC –DM2 ENABLE Trial

%EWL Results

*N represents subjects using the device for 12 hours or more

-10

n=26

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

n=27

n=26

n=25

n=12

n=28

Change in HbA1c %

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

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= 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= 14

At all time points statistically significant with p=.04

Baseline=

100.1

2.4

mmHg

-20

-15

-10

-5

No Change in Blood Pressure in Normotensive

Patients

-10

-8

-6

-4

-2

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

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

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

Warrants

Options

2.0

million

Diluted

Outstanding

52.1

million

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

ReShape Lifesciences 8-KRegulation FD Disclosure