Apollo Endosurgery, Inc. Announces the Sale of Its Surgical Product Line
December 18 2018 - 8:00AM
Business Wire
Apollo Endosurgery, Inc. (“Apollo”) (Nasdaq:APEN), a global
leader in less invasive medical devices for bariatric and
gastrointestinal procedures, today announced the sale of its
Surgical product line, which consists of the Lap-Band® adjustable
gastric banding system and other accessories used in laparoscopic
bariatric surgery, to ReShape Lifesciences Inc. (“ReShape”)
(Nasdaq: RSLS). The definitive transaction agreements were signed
and closed simultaneously yesterday, December 17, 2018.
This transaction will allow Apollo to focus all its efforts on
growing the clinical adoption of its Endo-bariatric product
offerings, which consists of its OverStitch Endoscopic Suturing
Systems and the Orbera Intragastric Balloon technologies.
“Our Surgical product line has served an important purpose for
us, but it is no longer a strategic fit with our focus on our
Endo-bariatric products and therapies,” stated Todd Newton,
Apollo’s Chief Executive Officer. “The future for therapeutic
endoscopy is very promising, especially due to flexible endoscopic
suturing delivered by our OverStitch technology. By allowing
physicians to suture with precision and assurance from a flexible
endoscope, OverStitch enables many improved core gastrointestinal
and bariatric therapy options for physicians and their patients. We
also remain very bullish on the potential of the intra-gastric
balloon market. We believe it is in the best interest of Apollo’s
customers and shareholders that we direct our attention exclusively
to the growth opportunities being afforded to us from these
products.”
At closing Apollo received cash of $10 million and ReShape’s
intra-gastric balloon product line. Apollo will also receive
payments of $2 million each on the first and second anniversaries
of the closing, and a final payment of $3 million on the third
anniversary of the closing. As part of the transaction, Apollo
retains a secured interest in the assets of ReShape until the
earlier of a) satisfaction of the payments due, or b) the
completion by ReShape of a qualifying equity raise of at least $15
million. Apollo and ReShape also entered into a set of transition
services agreements under which Apollo will continue to manufacture
the Surgical product line for ReShape for up to two years, continue
distributing the products in markets outside the United States for
up to 12 months, and other specified services.
While the ReShape intra-gastric balloon will remain available
for the near term, Apollo intends to focus its commercial efforts
exclusively on its Orbera intra-gastric balloon products.
Apollo used the upfront cash proceeds from ReShape of $10
million to pay down its borrowings under its senior secured credit
facility.
Closing and Advisors
The transaction closed December 17, 2018. Cooley LLP were legal
advisors to Apollo in connection with this transaction.
Conference Call & Webcast
Apollo will hold a conference call today, December 18, 2018 at
7:30 a.m. CT / 8:30 a.m. ET to discuss the transaction. The dial-in
numbers are (866) 393-4306 for domestic callers and (734) 385-2616
for international callers. The conference ID number is 4799662. A
live webcast of the conference call will be available online from
the investor relations page of the Company's corporate website at
www.apolloendo.com.
About Apollo Endosurgery, Inc.
Apollo Endosurgery, Inc. is a medical technology company focused
on less invasive therapies for the treatment of obesity, a
condition facing over 650 million people globally, as well as other
gastrointestinal conditions. Apollo’s device based therapies are an
alternative to invasive surgical procedures, thus lowering
complication rates and reducing total healthcare costs. Apollo's
products are offered in over 70 countries today and include the
OverStitch™ Endoscopic Suturing System and the ORBERA® Intragastric
Balloon.
Apollo’s common stock is traded on NASDAQ Global Market under
the symbol "APEN". For more information regarding Apollo
Endosurgery, go to: www.apolloendo.com.
Cautionary Note on Forward-Looking Statements
Certain statements in this press release are forward-looking
statements that are subject to risks and uncertainties that could
cause results to be materially different than expectations.
Important factors that could cause actual results to differ
materially include: the ability to collect future payments from
ReShape, the advancement of Apollo products; development of
enhancements to Apollo’s existing products and technologies; market
acceptance of Apollo’s products; the execution of our gross margin
improvement projects; and statements relating to the availability
of cash for Apollo's future operations, Apollo’s ability to support
the adoption of its products and its ability to broaden its product
portfolio as well as other factors detailed in Apollo’s periodic
reports filed with the Securities and Exchange Commission, or SEC,
including its Form 10-K for the year ended December 31, 2017.
Copies of reports filed with the SEC are posted on Apollo’s website
and are available from Apollo without charge. These forward-looking
statements are not guarantees of future performance and speak only
as of the date hereof, and, except as required by law, Apollo
disclaims any obligation to update these forward-looking statements
to reflect future events or circumstances.
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Apollo Endosurgery, Inc.John Gillings, 512-279-5100Investor
Relations Managerinvestor-relations@apolloendo.com