EnteroMedics Cuts 13 Positions

EnteroMedics Inc. has reduced its workforce by 13 positions, primarily among clinical and development department professionals and their support staff.

Several objectives in clinical affairs and development have recently been met, reducing the need for certain functions within the affected departments. EnteroMedics remains fully staffed to provide clinical support activities for the ongoing trials, including the EMPOWER pivotal clinical trial for US approval of VBLOC Therapy for the treatment of obesity, and to continue to pursue the development of VBLOC Therapy in diabetes and hypertension.

“We appreciate the many contributions these employees have made to EnteroMedics,” said President and CEO Mark B. Knudson, Ph.D. “With the achievement of a number of our key objectives in clinical affairs and development, certain functions within these departments would have been underutilized over next 12 to 18 months. By undertaking this reduction in force, we expect to reduce our expenses. This savings, together with our new credit facility, will put us in a position to permit our current capital to reach further in these challenging economic times, giving us more strategic flexibility as we reach key milestone dates over the next 12 months.”

Individuals subject to the workforce reduction have been offered benefits and other services to assist them. The Company estimates that the reduction will result in approximately $2 million in reduced operating expenses in 2009.

EnteroMedics recently announced that it has secured a $20 million working capital loan to supplement its $28.6 million in cash, cash equivalents and short-term investments as of Sept. 30, 2008.