Obalon Therapeutics, Inc. (NASDAQ: OBLN), a vertically integrated
medical technology company with the first and only FDA-approved
swallowable, gas-filled intragastric balloon system for the
treatment of obesity, today announced its financial results
for the fourth quarter and full year ended December 31, 2019.
“2019 was an eventful year for Obalon as we recapitalized and
repositioned the business to efficiently leverage our FDA-approved
weight loss system through our new retail treatment center business
model,” said Bill Plovanic, President and Chief Executive Officer.
“We are very pleased with the opening and initial operations of our
first treatment center in San Diego California, in addition to the
recent opening of our second treatment center in Orange County,
California. Our priorities in 2020 are focused on expanding our
retail treatment center footprint, raising awareness of the Obalon
Centers for Weight Loss™ brand, and working to create shareholder
value by building a standardized, repeatable business using the
Company-owned or managed retail treatment center model.”
Key Accomplishments in 2019:
- Opened the first Obalon-managed retail treatment center in San
Diego
- Commercialized Obalon Navigation System and Obalon Touch
Inflation Dispenser
- Streamlined operations and spend to support new commercial
strategy
- Repaid all outstanding long-term debt
- Promoted Bill Plovanic from Chief Financial Officer to
President and Chief Executive Officer
- Appointed Bob MacDonald as Chief Retail Officer to establish
and grow our network of Obalon Centers for Weight Loss
facilities
- Promoted Nooshin Hussainy from Vice President of Finance to
Chief Financial Officer
- Engaged Helmuth T. Billy, MD as Medical Director for
Company-managed California retail treatment centers
- Entered into one-year distribution agreement with distributor
for Qatar
- Announced clinical data presentation at ASMBS annual meeting at
Obesity Week 2019 demonstrating clinically meaningful weight loss
for patients treated with the Obalon Balloon System with no serious
adverse events reported
Fourth Quarter 2019 Results:
The Company reported revenue of $0.8 million for the fourth
quarter of 2019, compared to $2.0 million for the fourth quarter of
2018. U.S. revenue of $0.5 million represented 62% of revenue as
compared to $0.8 million and 41% of revenue in the fourth quarter
of 2018. International revenue of $0.3 million represented 38% of
revenue in the fourth quarter of 2019, compared to $1.2 million and
59% of revenue in the fourth quarter of 2018.
Cost of revenue was $0.6 million during the three months ended
December 31, 2019, down from $1.5 million for the prior-year
comparable period. Gross profit for the fourth quarter of 2019 was
$0.2 million, resulting in a gross margin of 20%, compared to a
gross profit of $0.5 million and gross margin of 26% for the fourth
quarter of 2018.
Research and development expense for the fourth quarter of 2019
totaled $1.5 million, down from $2.3 million in the fourth quarter
of 2018. Selling, general and administrative expense decreased to
$3.6 million for the fourth quarter of 2019, compared to $6.9
million in the fourth quarter of 2018.
Operating loss for the fourth quarter of 2019 was $5.0 million,
compared to an operating loss of $8.7 million for the fourth
quarter of 2018.
Net loss in the fourth quarter of 2019 was $4.9 million,
compared to a net loss of $8.8 million in the fourth quarter of
2018. The net loss per share was $0.64 for the fourth quarter of
2019 as compared to the net loss per share of $3.87 for the fourth
quarter of 2018.
As of December 31, 2019, Obalon had cash and cash equivalents of
$14.1 million and no outstanding debt.
Full Year 2019 Results:
Obalon reported full year 2019 revenue of $3.3 million, as
compared to $9.1 million for the full year 2018. U.S. revenue of
$2.4 million represented 73% of full year 2019 revenue, decreasing
from $4.7 million or 52% of full year 2018 revenue. International
revenue of $0.9 million in 2019 equated to 27% of full year 2019
revenue as compared to $4.4 million of international revenue in
2018 which equated to 48% of full year 2018 revenue.
Gross profit for the full year 2019 was $0.3 million, resulting
in a gross margin of 10%, as compared to $3.7 million for the full
year 2018 and a gross margin of 40%.Research and development
expense totaled $6.9 million for the full year 2019, as compared to
$10.7 million for the full year 2018. Selling, general and
administrative expense decreased to $16.7 million for the full year
2019, as compared to $29.9 million for the full year 2018.
Operating loss for the full year 2019 was $23.2 million,
compared to an operating loss of $37.0 million for the full year
2018.
Net loss was reported at $23.7 million for the full year 2019
compared to a net loss of $37.4 million for the full year 2018. The
net loss per share was $5.03 for the full year 2019, as compared to
the net loss per share of $19.64 for the full year 2018.
Call Information
A conference call to discuss fourth quarter and full year 2019
financial results is scheduled for today, February 27, 2020, at
8:30 AM Eastern Time (5:30 AM Pacific Time). Interested parties may
access the conference call by dialing (844) 889-7791 (U.S.) or
(661) 378-9934 (international) using passcode 6573298. Media
and individuals will be in a listen-only mode. Participants are
asked to dial in a few minutes prior to the call to register for
the event. The conference call will also be webcast live
at: https://edge.media-server.com/mmc/p/c8zmkz5x.An archive of
the webcast will be available for twelve months following the event
on the Obalon Therapeutics, Inc. website located
at http://investor.obalon.com in the “News & Events”
section.
Cautionary Statement Regarding Forward Looking
Statements
This press release contains forward-looking statements that are
not purely historical regarding Obalon’s or its management’s
intentions, beliefs, expectations and strategies for the future,
including those related to new products and their potential
benefits. All forward-looking statements and reasons why results
might differ included in this press release are made as of the date
of this release, based on information currently available to
Obalon, deal with future events, are subject to various risks and
uncertainties, and actual results could differ materially from
those anticipated in those forward looking statements. The risks
and uncertainties that may cause actual results to differ
materially from Obalon’s current expectations are more fully
described in Obalon’s annual report on Form 10-K for the period
ended December 31, 2019, as filed with the Securities and Exchange
Commission on February 27, 2020, and its other reports, each as
filed with the Securities and Exchange Commission. Except as
required by law, Obalon assumes no obligation to update any such
forward-looking statement after the date of this report or to
conform these forward-looking statements to actual results.
About Obalon Therapeutics, Inc. Obalon
Therapeutics, Inc. (NASDAQ:OBLN) is a San Diego-based company
focused on developing and commercializing novel technologies for
weight loss. For more information, please
visit www.obalon.com.
For Obalon Therapeutics, Inc.
Investor Contact: William Plovanic President &
Chief Executive Officer Obalon Therapeutics, Inc.
Office: +1 760 607 5103 wplovanic@obalon.com
OBALON THERAPEUTICS, INC. |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS |
(in thousands, except shares and per share data) |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
Revenue |
$ |
787 |
|
|
$ |
2,036 |
|
|
$ |
3,281 |
|
|
$ |
9,101 |
|
Cost of revenue |
627 |
|
|
1,504 |
|
|
2,950 |
|
|
5,423 |
|
Gross profit |
160 |
|
|
532 |
|
|
331 |
|
|
3,678 |
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development |
1,492 |
|
|
2,338 |
|
|
6,893 |
|
|
10,697 |
|
Selling, general and administrative |
3,643 |
|
|
6,854 |
|
|
16,668 |
|
|
29,946 |
|
Total operating expenses |
5,135 |
|
|
9,192 |
|
|
23,561 |
|
|
40,643 |
|
Loss from operations |
(4,975 |
) |
|
(8,660 |
) |
|
(23,230 |
) |
|
(36,965 |
) |
Interest income (expense),
net |
63 |
|
|
(62 |
) |
|
(385 |
) |
|
(226 |
) |
Other expense |
(1 |
) |
|
(34 |
) |
|
(61 |
) |
|
(189 |
) |
Net loss |
(4,913 |
) |
|
(8,756 |
) |
|
(23,676 |
) |
|
(37,380 |
) |
Other comprehensive income |
— |
|
|
2 |
|
|
— |
|
|
5 |
|
Net loss and comprehensive
loss |
$ |
(4,913 |
) |
|
$ |
(8,754 |
) |
|
$ |
(23,676 |
) |
|
$ |
(37,375 |
) |
Net loss per share, basic and
diluted |
$ |
(0.64 |
) |
|
$ |
(3.87 |
) |
|
$ |
(5.03 |
) |
|
$ |
(19.64 |
) |
Weighted-average common shares
outstanding, basic and diluted |
7,692,673 |
|
|
2,259,645 |
|
|
4,706,775 |
|
|
1,903,734 |
|
|
|
|
|
|
|
|
|
|
|
|
|
OBALON THERAPEUTICS, INC. |
CONSOLIDATED BALANCE SHEETS |
(in thousands, except shares and par value data) |
|
|
December 31, |
|
2019 |
|
2018 |
Assets |
|
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
14,055 |
|
|
$ |
21,187 |
|
Short-term investments |
— |
|
|
2,548 |
|
Accounts receivable, net |
285 |
|
|
870 |
|
Inventory |
1,936 |
|
|
1,580 |
|
Other current assets |
1,959 |
|
|
2,462 |
|
Total current assets |
18,235 |
|
|
28,647 |
|
Lease right-of-use assets |
1,077 |
|
|
— |
|
Property and equipment, net |
1,081 |
|
|
1,739 |
|
Total assets |
$ |
20,393 |
|
|
$ |
30,386 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable |
$ |
648 |
|
|
$ |
1,159 |
|
Accrued compensation |
820 |
|
|
3,805 |
|
Deferred revenue |
424 |
|
|
352 |
|
Other current liabilities |
1,524 |
|
|
1,985 |
|
Current portion of lease liabilities |
561 |
|
|
— |
|
Current portion of long-term loan |
— |
|
|
9,930 |
|
Total current liabilities |
3,977 |
|
|
17,231 |
|
Lease liabilities long term |
567 |
|
|
— |
|
Other long-term liabilities |
— |
|
|
48 |
|
Total liabilities |
4,544 |
|
|
17,279 |
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
Common stock, $0.001 par value; 100,000,000 shares authorized at
December 31, 2019 and December 31, 2018; 7,724,100 and 2,351,333
shares issued and outstanding at December 31, 2019 and December 31,
2018, respectively |
8 |
|
|
2 |
|
Additional paid-in capital |
188,271 |
|
|
161,859 |
|
Accumulated deficit |
(172,430 |
) |
|
(148,754 |
) |
Total stockholders’ equity |
15,849 |
|
|
13,107 |
|
Total liabilities and stockholders’ equity |
$ |
20,393 |
|
|
$ |
30,386 |
|
|
|
|
|
|
|
|
|
OBALON THERAPEUTICS, INC. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(in thousands) |
|
|
|
Year Ended December 31, |
|
2019 |
|
2018 |
|
|
|
|
|
|
Operating
activities: |
|
|
|
Net loss |
$ |
(23,676 |
) |
|
$ |
(37,380 |
) |
Adjustments to reconcile net loss
to net cash used in operating activities: |
|
|
|
Depreciation |
479 |
|
|
581 |
|
Stock-based compensation |
2,983 |
|
|
4,693 |
|
Amortization of right-of-use asset |
415 |
|
|
— |
|
Loss on disposal of fixed assets |
128 |
|
|
107 |
|
Accretion of investment discount, net |
(2 |
) |
|
(50 |
) |
Amortization of debt discount |
70 |
|
|
37 |
|
Change in operating assets and liabilities: |
|
|
|
Accounts receivable, net |
585 |
|
|
3,353 |
|
Inventory |
12 |
|
|
(162 |
) |
Other current assets |
411 |
|
|
98 |
|
Accounts payable |
(543 |
) |
|
70 |
|
Accrued compensation |
(2,985 |
) |
|
(689 |
) |
Deferred revenue |
72 |
|
|
(158 |
) |
Lease liabilities, net |
(364 |
) |
|
— |
|
Other current and long term liabilities |
(451 |
) |
|
68 |
|
Net cash used in operating activities |
(22,866 |
) |
|
(29,432 |
) |
Investing
activities: |
|
|
|
Purchases of short-term
investments |
— |
|
|
(9,102 |
) |
Maturities of short-term
investments |
2,550 |
|
|
29,901 |
|
Purchases of property and
equipment |
(194 |
) |
|
(1,282 |
) |
Net cash provided by investing activities |
2,323 |
|
|
19,517 |
|
Financing
activities: |
|
|
|
Proceeds from issuance of common
stock and warrants, net of issuance costs |
23,377 |
|
|
9,823 |
|
Proceeds from long-term loan, net
of issuance costs |
10,000 |
|
|
— |
|
Fees paid in connection with loan
amendment |
— |
|
|
(30 |
) |
Repayments of long-term
loans |
(20,000 |
) |
|
— |
|
Proceeds from common stock issued
under employee stock purchase plan |
— |
|
|
148 |
|
Proceeds from sale of common
stock upon exercise of stock options |
1 |
|
|
53 |
|
Net cash provided by financing activities |
13,378 |
|
|
9,994 |
|
Net (decrease) increase in cash and cash equivalents |
(7,132 |
) |
|
79 |
|
Cash and cash equivalents at
beginning of period |
21,187 |
|
|
21,108 |
|
Cash and cash equivalents at end
of period |
$ |
14,055 |
|
|
$ |
21,187 |
|
Supplemental cash flow
information: |
|
|
|
Interest paid |
$ |
719 |
|
|
$ |
642 |
|
Income taxes paid |
$ |
— |
|
|
$ |
7 |
|
Property and equipment in
accounts payable |
$ |
32 |
|
|
$ |
201 |
|
Unpaid issuance costs |
$ |
— |
|
|
$ |
250 |
|
Fair value of commitment shares
issued |
$ |
— |
|
|
$ |
595 |
|
|
|
|
|
|
|
|
|
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