EnteroMedics, a medical device maker engaged in the development of an implantable therapeutic device to treat obesity, priced its offering of 5 million shares at $8, far below its originally proposed range of $14-$16. While the market opportunity for obesity treatments is huge, we believe investors were concerned about its product's lack of a long-term safety and efficacy profile, and the fact that commercialization is not expected before 2010. JP Morgan and Morgan Stanley acted as joint book-running manager for the offering, and the stock is expected to begin trading on the NASDAQ under the ticker symbol "ETRM" on Thursday.
