UPDATE 3-EnteroMedics shares soar on promise of obesity device

Tue Jun 22, 2010 5:46pm EDT

* Data shows significant weight loss in patients

* Shares rise 124 pct (Recasts; updates share movement)

June 22 (Reuters) - Shares of EnteroMedics Inc (ETRM.O) more than doubled in value after the company reported positive data from two studies of its device for treating obesity.

The company said obese patient with Type-2 diabetes, who were treated with its device Maestro System, showed sustained improvements in blood sugar, excess weight loss and blood pressure in a feasibility study called Enable.

The results from the study raised hopes about the development path for the Maestro System, which in October failed to meet its main goal. [ID:nBNG383656]

EnteroMedics also said additional results from the Empower study of Maestro System in obese patients showed sustained reduction in weight loss over 20 months.

The system continues to meet all of its safety goals, and no therapy-related serious adverse events were reported, the company said.

EnteroMedics' device is implanted laparoscopically to periodically block vagus nerves, which control multiple digestive functions, using high-frequency, low-energy electrical impulses.

The company said it continued to see a correlation between hours of daily device use and excess weight loss.

Shares of EnteroMedics, which earlier touched a high of $0.65, closed at $0.61 Tuesday on Nasdaq. (Reporting by Shailesh Kuber and Anand Basu in Bangalore; Editing by Roshni Menon and Don Sebastian)

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