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Obalon Announces First Quarter 2018 Financial Results

SAN DIEGO, May 10, 2018 (GLOBE NEWSWIRE) -- 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 unaudited financial results as of and for the first quarter ended March 31, 2018.

First Quarter 2018 highlights:

  • Highest number of treating accounts ever, up 40% vs Q4-17 and 300% vs Q1-17
  • Highest number of patients treated ever, up over 60% vs Q4-17 and 240% vs Q1-17
  • Highest  unique website visits ever, up over 70% vs Q4-17 and over 260% vs Q1-17
  • Highest Find-A-Doctor searches ever, up 55% vs Q4-17 and over 600% vs Q1-17
  • Todd Wood joins as new Vice President of Global Sales

The Company reported revenue of $1.3 million for the first quarter of 2018, compared to $1.5 million for the first quarter of 2017. Net loss was reported at $12.1 million compared to a net loss of $7.7 million in the first quarter of 2017 and net loss per share for the quarter was $0.71 as compared to net loss per share of $0.47 in the first quarter of 2017.

Cost of revenue was $0.8 million during the three months ended March 31, 2018, in-line with $0.8 million for the prior year period. Gross profit for the first quarter of 2018 was $0.6 million, resulting in a gross margin of 43%, compared to a gross profit of $0.6 million and gross margin of 44% for the first quarter of 2017.

Research and Development expense for the first quarter of 2018 totaled $2.6 million, up from $2.4 million in the first quarter of 2017, and Selling, General and Administrative expense increased to $10.0 million for the first quarter of 2018, compared to $5.9 million in the first quarter 2017. Selling, General and Administrative expenses in the first quarter 2018 included approximately $1.3 million related to investigation of the whistleblower allegations and terminated equity offering.   

Operating loss for the first quarter of 2018 was $12.1 million, compared to an operating loss of $7.7 million for the first quarter of 2017.

As of March 31, 2018, cash and cash equivalents were $33.5 million and debt was $10.0 million.

“In Q1-18, we continued the second half of our New Year’s Resolution Promotion strategy with an increased focus on driving utilization at the account level,” said Bill Plovanic, CFO.  “Although first quarter revenues were slower than Q4-17, we were very pleased with the underlying metrics as we strive to build a sustainable business.  New patient starts, the number of accounts treating, unique website visits and Find-A-Doctor searches grew meaningfully and were the highest level ever.”

Call Information

A conference call to discuss first quarter 2018 financial results is scheduled for today, May 10, 2018, at 5:00 PM Eastern Time (2:00 PM Pacific Time). Interested parties may access the conference call by dialing (844) 889-7791 (U.S.) or (661) 378-9934 (international) using passcode 3693617.  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/m6/p/q4jkh9dx.

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. The Obalon management team has over 150 combined years of experience in developing and commercializing novel medical technologies with a track record of financial and clinical excellence. For more information, please visit www.obalon.com.

For Obalon Therapeutics, Inc.

Investor Contact:
William Plovanic
Chief Financial Officer
Obalon Therapeutics, Inc.
Office: +1 760 607 5103
wplovanic@obalon.com

Media:
Megan Driscoll
EvolveMKD
Office Phone: +1 646 517 4220
mdriscoll@evolvemkd.com

 
OBALON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except shares and per share data)
 
  Three Months Ended March 31,
  2018   2017
       
  (Unaudited)
Revenue $ 1,346     $ 1,472  
Cost of revenue 769     823  
Gross profit 577     649  
Operating expenses:      
Research and development 2,639     2,400  
Selling, general and administrative 10,006     5,940  
Total operating expenses 12,645     8,340  
Loss from operations (12,068 )   (7,691 )
Interest expense, net (37 )   (54 )
Other expense (21 )    
  Net loss (12,126 )   (7,745 )
Other comprehensive income (loss) 6     (18 )
Net loss and comprehensive loss $ (12,120 )   $ (7,763 )
Net loss per share, basic and diluted $ (0.71 )   $ (0.47 )
Weighted-average common shares outstanding, basic and diluted 16,986,656     16,562,030  

 

 
OBALON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except shares and par value data)
 
  March 31, 2018   December 31, 2017
Assets (Unaudited)    
Current assets:      
Cash and cash equivalents $ 33,478     $ 21,108  
Short-term investments     23,292  
Accounts receivable, net of allowance of $621 and $239, respectively 2,553     4,223  
Inventory 1,867     1,418  
Other current assets 1,187     1,714  
Total current assets 39,085     51,755  
Property and equipment, net 1,422     1,346  
Total assets $ 40,507     $ 53,101  
Liabilities and Stockholders’ Equity      
Current liabilities:      
Accounts payable $ 2,304     $ 1,276  
Accrued compensation 1,831     4,494  
Deferred revenue 337     510  
Other current liabilities 1,677     1,773  
Current portion of long-term loan 2,961     1,958  
Total current liabilities 9,110     10,011  
  Deferred rent     13  
  Long-term loan, excluding current portion 6,973     7,964  
Total long-term liabilities 6,973     7,977  
Total liabilities 16,083     17,988  
Commitments and contingencies      
Stockholders’ equity:      
  Common stock, $0.001 par value; 300,000,000 shares authorized as of March 31, 2018 and December 31, 2017; 17,596,282 and 17,500,604 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively 18     18  
Additional paid-in capital 147,905     146,474  
Accumulated other comprehensive gain (loss) 1     (5 )
Accumulated deficit (123,500 )   (111,374 )
Total stockholders’ equity 24,424     35,113  
Total liabilities and stockholders’ equity $ 40,507     $ 53,101  

 

 
OBALON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
  Three Months Ended March 31,
  2018   2017
  (Unaudited)
Operating activities:      
Net loss $ (12,126 )   $ (7,745 )
Adjustments to reconcile net loss to net cash used in operating activities:      
Depreciation and amortization 129     66  
Stock-based compensation 1,389     463  
Loss on disposal of fixed assets 107      
(Accretion) amortization of investment (discount) premium, net (5 )   3  
Amortization of debt discount 11     10  
Change in operating assets and liabilities:      
Accounts receivable, net 1,670     (1,035 )
Accounts receivable from related party     515  
Inventory (449 )   (101 )
Other current assets 527     240  
Accounts payable 1,074     217  
Accrued compensation (2,663 )   (942 )
Deferred revenue (173 )   50  
Other current and long term liabilities (93 )   (94 )
Net cash used in operating activities (10,602 )   (8,353 )
Investing activities:      
Purchases of short-term investments     (25,029 )
Maturities of short-term investments 23,302     2,500  
Purchase of property and equipment (358 )   (381 )
Net cash provided by (used in) investing activities 22,944     (22,910 )
Financing activities:      
Proceeds from sale of common stock upon exercise of stock options 28      
Net cash provided by financing activities 28      
Net increase (decrease) in cash and cash equivalents 12,370     (31,263 )
Cash and cash equivalents at beginning of period 21,108     72,975  
Cash and cash equivalents at end of period $ 33,478     $ 41,712  
Supplemental cash flow information:      
Interest paid $ 149     $ 130  
Property and equipment in accounts payable $ 46     $ 129  

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