Obalon Announces Third Quarter 2019 Financial Results
November 08 2019 - 07:15AM
Obalon Therapeutics, Inc. (NASDAQ:OBLN), a weight loss solutions
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 third
quarter ended September 30, 2019.
Third Quarter 2019 highlights:
- Announced the opening of the first Company-owned retail
treatment center, the Obalon Center for Weight Loss in San Diego,
CA., and initial patient treatments
- Further streamlined operations and expenses to support the new
commercial strategy
- Raised $16.6 million in gross proceeds from an equity
offering
- Extinguished long-term debt facility by making the final $5
million payment
- Promoted William J. Plovanic to President and Chief Executive
Officer
- Promoted Nooshin Hussainy to Chief Financial Officer
"During the third quarter, we opened the first Obalon Center for
Weight Loss and began to lay the foundation for our new commercial
strategy of developing Company-owned retail treatment centers,
which we believe will make our proven, FDA-approved gastric balloon
weight loss system more accessible to patients,” said William J
Plovanic, President and Chief Executive Officer. “Our key
accomplishments in the period included creating the required
corporate structure, engaging a professional medical corporation to
oversee medical care, hiring the necessary staff to run day-to-day
operations, entering into the lease and building out the physical
space for our first Company-owned retail weight loss treatment
center, which resulted in opening the site and initiating first
patient treatments.”
Mr. Plovanic continued, “There continues to be strong interest
in the Obalon Balloon System from individuals with obesity who are
frustrated with not being able to lose weight with diet and
exercise-alone and those who are not interested in, or candidates
for, surgery. I look forward to providing more detail on our
commercial strategy on our earnings call today.”
Revenue for the third quarter of 2019 was $0.3 million, compared
to $3.0 million for the third quarter of 2018. The decrease was
largely attributable to the Company restructuring its operations,
eliminating its direct field sales force in April 2019, and
transitioning to its new strategy and business model. Net loss for
the third quarter of 2019 was $3.7 million, compared to $6.7
million for the third quarter of 2018. Net loss per share for the
third quarter of 2019 was $0.61, compared to $3.47 for the third
quarter of 2018.
Cost of revenue was $0.4 million for the third quarter of 2019,
down from $1.4 million for the third quarter of 2018. Gross deficit
for the third quarter of 2019 was $0.1 million, compared to a gross
profit of $1.6 million for the third quarter of 2018.
Research and development expense for the third quarter of 2019
totaled $1.2 million, down from $2.4 million for the third quarter
of 2018. Selling, general and administrative expense decreased to
$2.5 million for the third quarter of 2019, compared to $5.8
million for the third quarter of 2018.
Operating loss for the third quarter of 2019 was $3.7 million,
down from a loss of $6.6 million for the third quarter of 2018.
As of September 30, 2019, the Company had cash and cash
equivalents of $19.4 million and no debt.
Call Information
A conference call to discuss third quarter 2019 financial
results is scheduled for today, November 8, 2019, at 9:00 AM
Eastern Time (6:00 AM Pacific Time). Interested parties may access
the conference call by dialing (844) 889-7791 (U.S.) or (661)
378-9934 (international) and using passcode 4987828. 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: http://edge.media-server.com/mmc/p/htzhm89b
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.
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 http://www.obalon.com.
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, 2018, its quarterly report on Form 10-Q for the
period ended June 30, 2019 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.
For Obalon Therapeutics, Inc.
Investor Contact: William Plovanic President and
Chief Executive Officer Obalon Therapeutics, Inc.
Office: +1 760 607 5103 wplovanic@obalon.com
OBALON THERAPEUTICS,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS(in thousands, except
shares and per share data)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
(Unaudited) |
Revenue |
$ |
333 |
|
|
$ |
2,987 |
|
|
$ |
2,494 |
|
|
$ |
7,065 |
|
Cost of revenue |
412 |
|
|
1,418 |
|
|
2,323 |
|
|
3,919 |
|
Gross (deficit) profit |
(79 |
) |
|
1,569 |
|
|
171 |
|
|
3,146 |
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development |
1,174 |
|
|
2,368 |
|
|
5,401 |
|
|
8,359 |
|
Selling, general and administrative |
2,489 |
|
|
5,836 |
|
|
13,025 |
|
|
23,092 |
|
Total operating expenses |
3,663 |
|
|
8,204 |
|
|
18,426 |
|
|
31,451 |
|
Loss from operations |
(3,742 |
) |
|
(6,635 |
) |
|
(18,255 |
) |
|
(28,305 |
) |
Interest income (expense),
net |
37 |
|
|
(70 |
) |
|
(448 |
) |
|
(164 |
) |
Other expense, net |
(1 |
) |
|
(40 |
) |
|
(60 |
) |
|
(155 |
) |
Net loss |
(3,706 |
) |
|
(6,745 |
) |
|
(18,763 |
) |
|
(28,624 |
) |
Other comprehensive income
(loss) |
— |
|
|
(3 |
) |
|
— |
|
|
3 |
|
Net loss and comprehensive
loss |
$ |
(3,706 |
) |
|
$ |
(6,748 |
) |
|
$ |
(18,763 |
) |
|
$ |
(28,621 |
) |
Net loss per share, basic and
diluted |
$ |
(0.61 |
) |
|
$ |
(3.47 |
) |
|
$ |
(5.07 |
) |
|
$ |
(16.05 |
) |
Weighted-average common shares
outstanding, basic and diluted |
6,061,248 |
|
|
1,945,864 |
|
|
3,700,538 |
|
|
1,783,793 |
|
OBALON THERAPEUTICS,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands, except shares and par value data)
|
September 30, 2019 |
|
December 31, 2018 |
Assets |
(Unaudited) |
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
19,380 |
|
|
$ |
21,187 |
|
Short-term investments |
— |
|
|
2,548 |
|
Accounts receivable, net of allowance of $508 and $665,
respectively |
238 |
|
|
870 |
|
Inventory |
2,048 |
|
|
1,580 |
|
Other current assets |
683 |
|
|
2,462 |
|
Total current assets |
22,349 |
|
|
28,647 |
|
Property and equipment, net |
1,117 |
|
|
1,739 |
|
Lease right-of-use assets |
1,191 |
|
|
— |
|
Total assets |
$ |
24,657 |
|
|
$ |
30,386 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable |
$ |
732 |
|
|
$ |
1,159 |
|
Accrued compensation |
724 |
|
|
3,805 |
|
Deferred revenue |
283 |
|
|
352 |
|
Other current liabilities |
1,609 |
|
|
1,985 |
|
Current portion of lease liabilities |
557 |
|
|
— |
|
Current portion of long-term loan |
— |
|
|
9,930 |
|
Total current liabilities |
3,905 |
|
|
17,231 |
|
Lease liabilities long-term |
687 |
|
|
— |
|
Other long-term liabilities |
— |
|
|
48 |
|
Total long-term liabilities |
687 |
|
|
48 |
|
Total liabilities |
4,592 |
|
|
17,279 |
|
Commitments and
contingencies |
|
|
|
Stockholders’
equity: |
|
|
|
Common stock, $0.001 par value; 100,000,000 shares authorized as of
September 30, 2019 and December 31, 2018; 7,724,100 and 2,351,333
shares issued and outstanding as of September 30, 2019 and December
31, 2018, respectively |
8 |
|
|
2 |
|
Additional paid-in capital |
187,574 |
|
|
161,859 |
|
Accumulated deficit |
(167,517 |
) |
|
(148,754 |
) |
Total stockholders’ equity |
20,065 |
|
|
13,107 |
|
Total liabilities and stockholders’ equity |
$ |
24,657 |
|
|
$ |
30,386 |
|
|
|
|
|
OBALON THERAPEUTICS,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (in thousands)
|
Nine Months Ended September 30, |
|
2019 |
|
2018 |
|
(Unaudited) |
Operating
activities: |
|
|
|
Net loss |
$ |
(18,763 |
) |
|
$ |
(28,624 |
) |
Adjustments to reconcile net loss
to net cash used in operating activities: |
|
|
|
Depreciation |
361 |
|
|
428 |
|
Stock-based compensation |
2,300 |
|
|
3,610 |
|
Loss on disposal of fixed assets |
128 |
|
|
107 |
|
Amortization of right-of-use asset |
301 |
|
|
— |
|
Accretion of investment discount, net |
(2 |
) |
|
(20 |
) |
Amortization of debt discount |
70 |
|
|
29 |
|
Change in operating assets and liabilities: |
|
|
|
Accounts receivable, net |
632 |
|
|
1,448 |
|
Inventory |
(117 |
) |
|
(537 |
) |
Other current assets |
1,604 |
|
|
805 |
|
Accounts payable |
(724 |
) |
|
135 |
|
Accrued compensation |
(3,097 |
) |
|
(1,823 |
) |
Deferred revenue |
(69 |
) |
|
(209 |
) |
Lease liabilities, net |
(248 |
) |
|
— |
|
Other current and long-term liabilities |
(363 |
) |
|
634 |
|
Net cash used in operating activities |
(17,987 |
) |
|
(24,017 |
) |
Investing
activities: |
|
|
|
Purchases of short-term
investments |
— |
|
|
(9,103 |
) |
Maturities of short-term
investments |
2,550 |
|
|
24,302 |
|
Purchases of property and
equipment |
(44 |
) |
|
(867 |
) |
Net cash provided by investing activities |
2,506 |
|
|
14,332 |
|
Financing
activities: |
|
|
|
Proceeds from long-term loan |
10,000 |
|
|
— |
|
Payment on long-term loan |
(20,000 |
) |
|
— |
|
Proceeds from issuance of common
stock and warrants, net of paid issuance costs |
15,014 |
|
|
9,973 |
|
Proceeds from issuance of common
stock, net of issuance costs |
8,659 |
|
|
— |
|
Proceeds from stock issued under
employee stock purchase plan |
— |
|
|
148 |
|
Proceeds from sale of common
stock upon exercise of stock options |
1 |
|
|
38 |
|
Fees paid in connection with loan
amendment |
— |
|
|
(30 |
) |
Net cash provided by financing activities |
13,674 |
|
|
10,129 |
|
Net (decrease) increase in cash and cash equivalents |
(1,807 |
) |
|
444 |
|
Cash and cash equivalents at
beginning of period |
21,187 |
|
|
21,108 |
|
Cash and cash equivalents at end
of period |
$ |
19,380 |
|
|
$ |
21,552 |
|
Supplemental cash flow
information: |
|
|
|
Interest paid |
$ |
700 |
|
|
$ |
473 |
|
Unpaid issuance costs |
$ |
295 |
|
|
$ |
160 |
|
Property and equipment in
accounts payable |
$ |
— |
|
|
$ |
106 |
|
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