Thread: (ETRM) MCap $70 M /Mega Obesity Product near Approval =500% ++ Potential !!!

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  1. #1

    Default (ETRM) MCap $70 M /Mega Obesity Product near Approval =500% ++ Potential !!!

    Market Cap : $71 M
    Price : $1.28
    Shares Out : 55 M ( 35 M held by Investors )

    "EnteroMedics remains well funded to support our regulatory efforts for commercialization of the Maestro ReChargeable System in the United States, with a PMA application on track to be submitted to the Food and Drug Administration in the second quarter of 2013," said Greg S. Lea, Senior Vice President, Chief Financial Officer and Chief Operating Officer.
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    Obesity is not only a deadly disease it is also a pain on the bottom line of insurance companies. With the decline in Lap-Band sales over the last year amid negative publicity regarding the high risks, there is a nice potential niche market for ETRM. Right now the market is not reflecting that potential in shares of ETRM. Allergan (AGN), the maker of the Lap-Band, is looking to sell the Lap-Band business right now with annual sales of $132M. If ETRM were to gain FDA approval and grab this market, the market cap upside potential could be very large. VVUS expects annual sales this year of only $43m and trades in excess of $1 billion in market cap. ARNA has a $1.7 billion market cap. ETRM is currently trading at a market cap of $50m, with $34m of that in cash, giving it tremendous upside potential. As we have outlined in previous articles on bad news biotech stocks, the upside potential AFTER bad news drops can be very nice, especially when the trial data shows some positives. Also, the company is seeking FDA approval and plans to file for this approval in the second quarter. That news, from these depressed prices, could give investors some nice upside with minimal near term downside. Also, given the safety profile for the Maestro system, insurance coverage may be much easier to attain. Assuming ETRM is able to garner only half of the Lap-Band PEAK market sales of $250m, and ETRM is valued along the lines of ARNA and VVUS, we would be looking at a return to its 2009 price of $20 per share. This may sound outrageous but look at the lofty valuations for the other players in the obesity market. It's ETRM's turn to join the diet party--
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    nteroMedics has positioned its technology as an alternative to bariatric surgery. The company's treatment will cost in the low to mid $20,000 range, compared to the upper $20,000 range for surgery, Knudson said. He said the device also is safer than surgery, which should appeal to insurance companies. The company is now in discussions with insurers about covering Maestro.


    Global Obesity Epidemic

    Obesity is a disease that has been increasing at an alarming rate with significant medical repercussions and associated economic costs. Currently, as many as 500 million people worldwide are estimated to be obese and 1.5 billion adults are estimated to be overweight, according to the World Health Organization. At least 2.8 million adults die each year as a result of being overweight or obese. Many people with obesity also have severe and complex problems related to their disease, including metabolic and cardiovascular co-morbidities such as type 2 diabetes and hypertension. Forty four percent of the diabetes burden, 23 percent of the heart disease burden and between 7 percent and 41 percent of certain cancer burdens are attributable to overweight and obesity.
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    Up after hours, put this back on watch for a potential play tomorrow.
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    1.35 / 1.39 with 179 k in pre hours.

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