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American Medical Association Adopts New Category III CPT Codes for Vagus Nerve Blocking Therapy

Mon, 03/12/2012 - 4:45am
The Associated Press

EnteroMedics Inc., (NASDAQ: ETRM), the developer of medical devices

using neuroblocking technology to treat obesity, metabolic diseases

and other gastrointestinal disorders, today announced that it has been

notified by the American Medical Association that its Current

Procedural Terminology (CPT) Committee has approved an application for

six new Category III codes for vagal blocking therapy employed by

EnteroMedics' VBLOC@ vagal blocking therapy. The change in the CPT

code book will take effect with the publication of the July 2012

edition.

Category III CPT codes are a set of temporary tracking codes that

allow data collection for new and emerging technologies like VBLOC

Therapy. These codes will provide the opportunity for reimbursement

rates to be negotiated with health plans following Food and Drug

Administration (FDA) approval of the Company's anticipated Premarket

Approval (PMA) application for the Maestro@ System, and ultimately

could result in permanent Category I CPT codes.

"The approval of these Category III codes by the AMA's CPT Committee

is another marker of progress for VBLOC Therapy and shows the support

from multiple medical societies for the potential of our therapy based

upon our published clinical data," said Mark B. Knudson, Ph.D.,

EnteroMedics' President and Chief Executive Officer. "These codes will

help us build a broad experiential data base, from physicians and

patients in the ReCharge Study and other clinical trials, to support

an eventual application for a Category I CPT Payment Code pending an

approval by the FDA of VBLOC Therapy. In the coming months these codes

will also assist us in our effort to collect data and educate payors

and providers about the potential for neuroblocking therapy to treat

obesity and certain co-morbid conditions, such as diabetes."

About EnteroMedics Inc.

EnteroMedics is a development stage medical device company focused on

the design and development of devices that use neuroblocking

technology to treat obesity, metabolic diseases and other

gastrointestinal disorders. EnteroMedics' proprietary neuroblocking

technology, VBLOC@ vagal blocking therapy, is designed to

intermittently block the vagus nerves using high-frequency,

low-energy, electrical impulses. These electrical impulses are

delivered by a neuroregulator, EnteroMedics' Maestro@ System, which is

powered by an integrated rechargeable battery. For more information,

visit www.enteromedics.com(http://www.enteromedics.com/).

About VBLOC Therapy

EnteroMedics developed VBLOC@ vagal blocking therapy to offer

bariatric surgeons and their patients a less invasive alternative to

existing surgical weight loss procedures that may present significant

risks and alter digestive system anatomy, lifestyle and food choices.

VBLOC Therapy is delivered via the Maestro@ System through

laparoscopically implanted leads to intermittently block the vagus

nerves using high-frequency, low-energy electrical impulses. VBLOC

Therapy is designed to target the multiple digestive functions under

control of the vagus nerves and to affect the perception of hunger and

fullness.

About the ReCharge Study

The ReCharge Pivotal Trial is a randomized, double-blind,

parallel-group, multicenter pivotal clinical trial in 233 patients at

10 sites testing the effectiveness and safety of VBLOC@ vagal blocking

therapy in EnteroMedics' second generation Maestro@ Rechargeable (RC)

System. All patients in the study received an implanted device and

were randomized in a 2:1 allocation to treatment or control groups.

The control group received a non-functional device during the study

period. All patients are expected to participate in a weight

management counseling program.

Forward-Looking Safe Harbor Statement:

This press release contains forward-looking statements about

EnteroMedics Inc. Our actual results could differ materially from

those discussed due to known and unknown risks, uncertainties and

other factors including our limited history of operations; our losses

since inception and for the foreseeable future; our lack of commercial

regulatory approval for our Maestro@ System for the treatment of

obesity in the United States or in any foreign market other than

Australia and the European Community; our preliminary findings from

our EMPOWER pivotal trial; our ability to comply with the Nasdaq

continued listing requirements; our ability to commercialize our

Maestro System; our dependence on third parties to initiate and

perform our clinical trials; the need to obtain regulatory approval

for any modifications to our Maestro System; physician adoption of our

Maestro System and VBLOC@ vagal blocking therapy; our ability to

obtain third party coding, coverage or payment levels; ongoing

regulatory compliance; our dependence on third party manufacturers and

suppliers; the successful development of our sales and marketing

capabilities; our ability to raise additional capital when needed;

international commercialization and operation; our ability to attract

and retain management and other personnel and to manage our growth

effectively; potential product liability claims; potential healthcare

fraud and abuse claims; healthcare legislative reform; and our ability

to obtain and maintain intellectual property protection for our

technology and products. These and additional risks and uncertainties

are described more fully in the Company's filings with the Securities

and Exchange Commission, particularly those factors identified as

"risk factors" in the current report on Form 8-K filed September 28,

2011. We are providing this information as of the date of this press

release and do not undertake any obligation to update any

forward-looking statements contained in this document as a result of

new information, future events or otherwise.

Caution - Investigational device. Limited by Federal (United States)

law to investigational use.

The implantation procedure and usage of the Maestro@ System carry some

risks, such as the risks generally associated with laparoscopic

procedures and those related to treatment as described in the ReCharge

clinical trial informed consent.

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