EnteroMedics Acquires Medical Device Producer BarioSurg
Recently, EnteroMedics (ETRM) announced that it had acquired California medical device maker BarioSurg Incorporated. The strategic acquisition was due to BarioSurg's medical device that helps to treat obesity, called the Gastric Vest System. Enteromedics offers a similar device, known as vBloc and explained that through the acquisition, the Vest System and its vBloc product can be combined.
The Gastric Vest System is an alternative to weight loss instead of bariatric surgery. Bariatric surgery involves reducing the size of the stomach through the use of a gastric band which in turn encourages weight loss. In addition, there are times when a portion of the stomach can be removed as well.
To acquire BarioSurg, EnteroMedics will pay up to $2 million. Around 1.38 mil will be in in EnteroMedics common shares, and up to 1 million in convertible preferred shares. It is worth noting that the Gastric Vest System has not been FDA approved yet. Therefore, more testing will be needed before this milestone can be achieved. If it is eventually approved, then EnteroMedics can work on combining both products to improve patient outcomes with weight loss.
Disclosure: No position in any stocks mentioned