EnteroMedics Inc (NASDAQ:ETRM) Continues Its Monster Run

EnteroMedics Inc (NASDAQ:ETRM) Continues Its Monster Run

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EnteroMedics Inc (NASDAQ:ETRM) is a momentum play in the biotech space over the past few days. It’s suddenly on everyone’s radar given recent action. The stock has powered 350% higher since Wednesday, with the principal catalyst being a 1.6M share float subject to sudden news that the company’s vBloc Neurometabolic Therapy has now been implanted at two additional vBloc Institutes – MedStar Health in Maryland and Roper St. Francis in South Carolina.

According to the release, “in order to qualify as a vBloc Institute, a medical center or hospital system must have integrated the Company’s vBloc Therapy and its vBloc Achieve support program into its practice. MedStar Health and Roper St. Francis are the twelfth and thirteenth vBloc Institute programs to have integrated vBloc Therapy and the vBloc Achieve care delivery program into their practice to fight obesity. vBloc Institutes have previously been established at the following medical centers/hospital systems: VA North Texas Health Care System: Dallas VA Medical Center, NIX Medical (San Antonio), Hartford Hospital, Hackensack University Medical Center, South Florida Surgery and Bariatric Institute, University of Texas Medical Branch (UTMB), Smart Dimensions Weight Loss, Christiana Institute of Advanced Surgery (CHRIAS), Beltline Surgery Center, Winthrop University Hospital and Sky Ridge Medical Center.”

EnteroMedics Inc (NASDAQ:ETRM) trumpets itself as a medical device company that focuses on the design and development of devices that use neuroblocking technology to treat obesity, metabolic diseases, and other gastrointestinal disorders. Its proprietary neuroblocking technology is designed to intermittently block the vagus nerve using electrical impulses.

The company develops the Maestro Rechargeable System, which is used to limit the expansion of the stomach, control hunger sensations between meals, reduce the frequency and intensity of stomach contractions, and produce a feeling of early and prolonged fullness.

It has collaboration with Mayo Clinic for the development and testing of products for the treatment of obesity. The company was formerly known as Beta Medical, Inc. and changed its name to EnteroMedics Inc. in 2003. EnteroMedics Inc. was founded in 2002 and is headquartered in St. Paul, Minnesota.

According to company materials, “EnteroMedics is a medical device company focused on the development and commercialization of its neuroscience based technology to treat obesity and metabolic diseases. vBloc Neurometabolic Therapy, delivered by a pacemaker-like device called the vBloc System, is designed to intermittently block the vagus nerves using high-frequency, low-energy, electrical impulses. EnteroMedics’ vBloc System has received U.S. Food and Drug Administration approval and CE Mark.”

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As noted above, the company’s vBloc system is starting to gain an expanding footprint with two new clinics on board.

As described in the company’s release, vBloc Therapy works to control sensations of hunger using a pacemaker-like device that is implanted under the skin during a safe, minimally-invasive procedure that does not alter or remove any patient anatomy. This device can be adjusted to optimize patients’ therapy needs.  Patients feel the sensation of fullness, empowering them to eat less, control their appetite, make healthier choices and lose weight without the major lifestyle implications of traditional weight loss surgeries.

vBloc Achieve is a comprehensive, personalized weight loss support program to help vBloc patients reach and maintain health goals. While vBloc Therapy addresses hunger signals and cravings, vBloc Achieve provides emotional support and helps patients make positive lifestyle changes, including health, balanced eating and regular exercise that are essential to long-term weight-loss success.

Traders will note more than 17000% in gains during the past month in this wild move higher. In addition, the listing has benefitted from a jump in recent trading volume to the tune of more than 200% beyond what we have been seeing over the larger time frame.

Traders should note this as important with the stock trading on a float that is extremely small at just 1.6M shares. One is wise to respect the dynamic this may create — a restricted trading float and a jump in trading volume can crimp supply and push share prices higher.

Now commanding a market cap of $14.6M, ETRM has a significant war chest ($6.8M) of cash on the books, which is balanced by about $4.4M in total current liabilities. ETRM is pulling in trailing 12-month revenues of $794K. In addition, the company is seeing major top line growth, with y/y quarterly revenues growing at 363.7%. With strong news flow and a tiny float, the stock is obviously a momentum favorite. We will update the story again soon as developments transpire. For continuing coverage on shares of $ETRM stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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