NEW YORK (AP) -- Shares of EnteroMedics Inc. plunged Friday after the company reported disappointing clinical trial results for its Maestro system, which is designed use nerve stimulation to help obese people lose weight.
THE SPARK: The St. Paul, Minn., company said patients implanted with the Maestro device lost 24.4 percent of their excess body weight on average. That was significantly better than patients who were implanted with a sham device, but it wasn't as good as EnteroMedics had hoped. The company said 52.5 percent of the Maestro patients lost at least 20 percent of their excess weight and 38.3 percent lost at least 25 percent of that weight. Both totals were lower than the company expected.
The study involved 233 patients.
However EnteroMedics said it still plans to file for marketing clearance with the Food and Drug Administration during the second quarter.
THE BIG PICTURE: The company compares the rechargeable Maestro system to a pacemaker. It is an implant designed to deliver intermittent electrical stimulation to the vagus nerve, making patients feel less hungry and more satisfied. EnteroMedics said the device's two electrodes are implanted through laparoscopic surgeries, which could make the device system a less invasive alternative to other weight-loss surgeries. The device has an external battery that needs to be recharged weekly.
The system is approved in Europe and Australia, but not in the U.S.
SHARE ACTION: Shares of EnteroMedics dropped $1.58, or 55.6 percent, to $1.26 in afternoon trading. Earlier the shares reached an all-time low of $1.19.