Obalon Engages Canaccord Genuity to Explore Financial and Strategic Alternatives
March 25 2020 - 8:30AM
Obalon Therapeutics, Inc. (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 that its Board of
Directors has decided to explore potential financial and strategic
alternatives intended to enhance stockholder value. The Company has
engaged Canaccord Genuity LLC as its financial advisor.
The overall uncertainty, the restriction on elective procedures
and the specific directives issued by the Governor of California
regarding Covid-19 has had an immediate impact on Obalon’s
business. As previously announced, patients who are already in
treatment with the Obalon Balloon System at the retail treatment
centers will continue to receive full care, but sales to new
patients have been halted. This is particularly disappointing as
the San Diego center had generated an average of approximately 30
new patient sales per month for the three months preceding the
Covid-19 crisis, which annualizes to a run-rate approaching $2
million of gross patient sales in that center alone.
As a result of the California directives, the Company has also
halted manufacturing operations. Although Obalon believes it has
enough inventory to provide balloons for all patients currently in
treatment, it does not believe it will be able to ship new orders
to its international distributors or U.S. customers in Q2-20.
The impact of the Covid-19 crisis has significantly impacted
Obalon’s stock price, stockholder value and its ability to access
additional capital. Although Obalon ended December 31, 2019 with
$14 million in cash and equivalents and believes it can meet its
current financial obligations and liabilities, Obalon’s Board of
Directors has determined that it is in the best interest of
stockholders to explore potential financial and strategic
alternatives at this time. Potential financial and strategic
alternatives may include, among others, an equity or debt
financing, a sale of the company, a business combination, or a
merger or reverse merger with another party. No assurance can be
given as to whether any particular action or transaction will be
undertaken; however, Obalon intends to assess all viable paths to
potentially enhance stockholder value. The Company does not intend
to make any further public announcements regarding its strategic
review unless or until its Board of Directors has approved a
transaction or otherwise determined that further disclosure is
appropriate or required by law.
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
StatementsThis 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 and those related to potential financial and
strategic alternatives. 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 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 PlovanicPresident and Chief Executive OfficerObalon
Therapeutics, Inc.Office: +1 760 607 5103wplovanic@obalon.com
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