EnteroMedics Inc. to Cut 40% of Employees

EnteroMedics Inc. will slash its work force by 40 percent by Nov. 15, according to the St. Paul, Minn., firm.

The news comes after results from a study completed by the firm on Oct. 2, which shows the company needs to reduce the work force and operating costs to streamline its operations.

“This initiative, while difficult, is necessary to ensure that we have the resources in place to support our ongoing clinical trials and that the company remains well-equipped to provide support for these studies as we continue our evaluation of the one year data from the EMPOWER trial and formulate our plan for VBLOC Therapy,” said President and CEO Mark B. Knudson, Ph.D. “We thank all of our employees for their hard work on behalf of EnteroMedics and wish those leaving the company all the best.”

The reduction in force is expected to result in approximately $3.2 million in reduced operating expenses in 2010. The company expects to incur a charge of approximately $0.5 million related to the workforce reduction in the fourth quarter of 2009.

EnteroMedics is a development-stage medical device company focused on the design and development of devices that use neuroblocking technology to treat obesity and other gastrointestinal disorders.