EnteroMedics CEO: Don’t lump us in with failed Leptos Biomedical

ROSEVILLE, Minnesota — EnteroMedics Inc. already faces plenty of doubters on Wall Street. So not surprisingly, the company was not too happy with a recent story I wrote suggesting Leptos Biomedical Inc.’s demise had something to do with EnteroMedics’s problems with the Food and Drug Administration.

EnteroMedics and Leptos are both developing a device that uses electricity to treat obesity. But that’s where the similarities end, EnteroMedics CEO Mark Knudson told me in a quick phone call.

“I see no connection,” he said.

In the story, I wrote EnteroMedics’ problems with gaining FDA approval for its VBLOC therapy spelled bad news for companies like Leptos, who are far behind EnteroMedics in clinical development. I theorized EnteroMedics’ FDA woes spooked investors in the competition.

If EnteroMedics fails to win regulatory approval, companies following it will no doubt face a tough time raising money, Knudson said. But Leptos’ demise probably had a more simple reason: Its technology didn’t work, he said.

Leptos CEO Hans Neisz declined to tell me why the company folded, except to say it had nothing to do with raising money.

I should note that Knudson, who was gracious and friendly, invited me to visit his company next month. I gladly accepted.