EnteroMedics retools $35m follow-on

EnteroMedics (NSDQ:ETRM) yesterday said it’s retooling a follow-on offering it hoped would raise $35 million, after the NASDAQ exchange said it wouldn’t approve the deal.

St. Paul, Minn.-based EnteroMedics initially planned to float 40.2 million shares at 87¢ apiece, for gross proceeds of $35 million. The offering was to have consisted of 1 ETRM share, plus Series A and Series B warrants.

But the company was forced to cancel the issue “after the company was informed by the NASDAQ Capital Market that it was not willing to approve the transaction pursuant to its original terms,” EnteroMedics said.

Each share in the new offering, which has yet to price, is now slated to comprise 1 ETRM share plus Series A warrants, the company said. Canaccord Genuity is acting as sole book-running manager for the offering, EnteroMedics said; Craig-Hallum Capital Group was co-manager for the original flotation.

EnteroMedics won FDA approval for the Maestro device in January 2015, following a mixed vote last year after the device failed to meet its efficacy endpoint in a clinical trial. It’s designed to use what EnteroMedics calls “vBloc therapy,” in which electrical pulses are used to block intra-abdominal vagus nerve signaling between the brain and stomach using a pacemaker-like device.

The company has said it plans to use the funds to further the commercialization for its flagship Maestro anti-obesity implant, which saw its 1st commercial use in May.

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