Company Update (NASDAQ:ETRM): EnteroMedics Inc Announces Closing of $16.0 Million Public Offering of Common Stock and Warrants

EnteroMedics Inc (NASDAQ:ETRM), a developer and manufacturer of devices that use neuroblocking technology to treat obesity, metabolic diseases, and other gastrointestinal disorders, today announced the closing of its previously announced public offering of 32,000,000 units (the “Offering”) generating net proceeds of approximately US$14.7 million, with each unit consisting of one share of common stock and one Series A warrant to purchase one share of common stock at a purchase price of $0.50 per unit. Investors whose purchase of units in the offering would result in them beneficially owning more than the initial beneficial ownership limitation to be included in the warrants following the consummation of the offering will have the opportunity to acquire units with Series C pre-funded warrants substituted for any common stock they would have otherwise acquired over the initial beneficial ownership limitation, paying the same price of $0.50 per unit. The Series A warrants will be exercisable immediately and will expire 42 months after their date of issuance at an exercise price of $0.60 per share. The pre-funded Series C warrants will be exercisable immediately and will expire five years following issuance.

Canaccord Genuity acted as sole book-running manager and Craig-Hallum Capital Group acted as co-manager for the offering. Northland Securities and Roth Capital Partners served as financial advisors to the Company in connection with this transaction.

Net proceeds from the offering are expected to be approximately $14.7 million, after deducting underwriting commissions and other expenses related to the offering. The company intends to use the net proceeds from the offering to continue its commercialization efforts, for clinical and product development activities and for other working capital and general corporate purposes. None of the investors in the offering elected to receive Series C warrants as part of the units. (Original Source)

Shares of Enteromedics opened today at $0.41 and are currently trading down at $0.3515. ETRM has a 1-year high of $2.05 and a 1-year low of $0.34. The stock’s 50-day moving average is $1.04 and its 200-day moving average is $1.12.

On the ratings front, Canaccord Genuity analyst William Plovanic reiterated a Buy rating on ETRM, with a price target of $4, in a report issued on April 8. The current price target represents a potential upside of 1042.9% from where the stock is currently trading. According to, Plovanic has a total average return of 13.7%, a 62.6% success rate, and is ranked #117 out of 3692 analysts.

EnteroMedics Inc is a medical device company. The Company is focused on the design and development of devices that use neuroblocking technology to treat obesity, metabolic diseases and other gastrointestinal disorders.

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