EnteroMedics Enters Into $20.0 Million "At-the-Market" Equity Distribution Agreement With Canaccord Genuity

EnteroMedics Inc.

, the developer of medical devices using neuroblocking technology to treat obesity, metabolic diseases and other gastrointestinal disorders, today announced that it has entered into an "at-the-market" (ATM) equity distribution agreement with Canaccord Genuity Inc. acting as sole agent. Under the terms of the distribution agreement, the Company may, from time to time, sell shares of its common stock having an aggregate offering value of up to $20.0 million through Canaccord Genuity. The Company will determine, at its sole discretion, the timing and number of shares to be sold under this ATM facility. The ATM facility is intended to replace the Company's $45.0 million equity financing facility with Terrapin Opportunity, L.P., which has been discontinued. "With $23.3 million in current cash and equivalents, and the ability to sell shares under our new ATM facility, EnteroMedics will have the necessary resources to continue executing on its pivotal regulatory strategy and commercialization activities into 2014," said Greg S. Lea, Senior Vice President, Chief Financial Officer and Chief Operating Officer. A shelf registration statement (SEC File No. 333-183313) relating to these securities was declared effective by the Securities and Exchange Commission on August 29, 2012. The securities may be offered only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. When available, copies of the prospectus supplement and accompanying base prospectus related to the ATM offering may be obtained from the Securities and Exchange Commission's website at http://www.sec.gov or by contacting Canaccord Genuity Inc., Attention: Syndicate Department, 99 High Street, 12th Floor, Boston, Massachusetts 02110, by telephone at 617-371-3900 or by email at USecm@canaccordgenuity.com. This press release does not constitute an offer to sell or the solicitation of offers to buy any securities of the Company, and shall not constitute an offer, solicitation or sale of any security in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. About EnteroMedics Inc. EnteroMedics is a medical device company focused on the development and commercialization of its neuroscience based technology to treat obesity and metabolic diseases. EnteroMedics' proprietary technology, VBLOC® vagal blocking therapy, delivered by a pacemaker-like device called the Maestro® Rechargeable System, is designed to intermittently block the vagus nerves using high-frequency, low-energy, electrical impulses. VBLOC allows people with obesity to take a positive path towards weight loss, addressing the lifelong challenge of obesity and its comorbidities without sacrificing wellbeing or comfort. EnteroMedics' Maestro Rechargeable System has received CE Mark and is listed on the Australian Register of Therapeutic Goods.