Obalon Announces Further Impacts Related To Covid-19 Crisis and Current Business Environment
May 11 2020 - 8:30AM
Obalon Therapeutics, Inc. (“Obalon” or the “Company”)
(NASDAQ:OBLN), a vertically integrated weight loss solutions
company commercializing the first and only FDA-approved
swallowable, gas-filled intragastric balloon system for the
treatment of obesity, announces changes related to the impacts
of the Covid-19 crisis and current business environment on its
business, organization and strategic options.
As previously announced, the overall uncertainty, the
restriction on elective procedures and the specific directives
issued by the Governor of California as a result of Covid-19 have
had a significant impact on Obalon’s business. In March, the
Company halted sales to new patients in its company-branded retail
treatment centers and expansion plans for additional retail
centers, which was particularly disappointing as it had generated
an average of approximately 30 new patient sales per month at its
San Diego center for the three months preceding the Covid-19
crisis. The Company also halted manufacturing operations and
has not filled orders to US customers or its international
distributor since that time.
Given those impacts and the significant concern about an
economic recovery that would allow consumers to feel confident
enough to spend on a cash-pay procedure like the Obalon Balloon
System, the Company does not currently plan to re-open its retail
stores or to re-initiate its expansion plans for additional retail
centers. Additionally, the Company does not currently plan to
restart manufacturing operations or to ship orders to its US
customers or international distributor. As a result, the
Company would not expect to report any meaningful revenue during
the period beginning with the second quarter of 2020 and through at
least the end of 2020.
The Company previously announced that it had engaged Canaccord
Genuity as its financial advisor to explore strategic alternatives.
To date, the Company has been unable to identify a strategic
transaction that the board of directors believes to be in the best
interests of the stockholders.
The Company continues to believe the Obalon balloon system can
provide significant benefits to patients and value to the
healthcare system. As a result, Obalon is taking steps to
significantly reduce expenses in an effort to extend its cash
runway while it evaluates potential business options and strategic
alternatives that may be available when and if the current Covid
crisis stabilizes and the economy rebounds. The immediate
plans include a voluntary reduction in annual salary for all
current executives to $100,000 and the planned transition of Mark
Brister, Chief Technical Officer, and Amy VandenBerg, Chief
Clinical and Regulatory Officer, to consultants paid on an hourly
basis commencing in June 2020. Mr. Plovanic, the current
President and Chief Executive Officer, has previously announced his
resignation as CEO in June 2020. Andy Rasdal, the current
Executive Chairman of the Board, will assume the role of CEO after
Mr. Plovanic’s departure. He and Nooshin Hussainy, Chief
Financial Officer, plan to remain as full-time employees and have
agreed voluntarily to further reduce their annual salaries to
$55,000, which is approximately the minimum allowable wage for an
exempt employee, in June 2020. Absent a significant change in
the economy or the market for the Obalon balloon system, the
Company expects to significantly reduce the organization to only
essential personnel in June.
The Company anticipates providing more detail on the state of
its business and future strategies and plans in connection with the
filing of its quarterly report on Form 10-Q for the quarter ended
March 31, 2020, which it anticipates filing on or before June 29,
2020.
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 include those
associated with the impact of the COVID-19 pandemic and those
described in Obalon’s annual report on Form 10-K for the period
ended December 31, 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:
Bill Plovanic
President and Chief Executive Officer
Obalon Therapeutics, Inc.
Office: +1 760 607 5103
wplovanic@obalon.com
Obalon Therapeutics (NASDAQ:OBLN)
Historical Stock Chart
From Aug 2024 to Sep 2024
Obalon Therapeutics (NASDAQ:OBLN)
Historical Stock Chart
From Sep 2023 to Sep 2024