Obalon Announces Second Quarter 2017 Financial Results

SAN DIEGO, Aug. 02, 2017 (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 second quarter ended June 30, 2017.

Second Quarter 2017 highlights:

  • Revenue grew 33% sequentially over Q1-17 to $2.0 million
  • Gross margin improved to 50%
  • First commercial shipments of 6-month product to Middle East in July 2017
  • First US shipments of HPMC, vegetable based capsule, in July 2017

The Company reported total revenues of $2.0 million for the second quarter of 2017, compared to $0.8 million for the second quarter of 2016. Net loss was reported at $7.7 million compared to a net loss of $4.1 million in the second quarter of 2016 and net loss per share for the quarter was $0.46 as compared to net loss per share of $7.15 in the second quarter of 2016.

Cost of goods sold was $1.0 million during the three months ended June 30, 2017, up from $0.7 million for the prior year period. Gross profit for the second quarter of 2017 was $1.0 million, resulting in a gross margin of 50%, compared to a gross profit of $0.1 million and gross margin of 14% for the second quarter of 2016.

Research and Development expense for the second quarter of 2017 totaled $2.8 million, up from $2.6 million in the second quarter of 2016, and Selling, General and Administrative expense increased to $5.9 million for the second quarter of 2017, compared to $1.6 million in the second quarter 2016.

Operating loss for the second quarter of 2017 was $7.6 million, compared to an operating loss of $4.1 million for the second quarter of 2016.

At June 30, 2017, cash, cash equivalents and short-term investments were $60.7 million and long-term debt was $10.0 million.

Call Information

A conference call to discuss second quarter 2017 financial results is scheduled for today, August 2, 2017, at 8:30 AM Eastern Time (5:30 AM Pacific Time). Interested parties may access the conference call by dialing (844) 889-7791 (U.S.) or (661) 378-9934 (international) using passcode 61524873. 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/m/p/si96igkx.

A replay of the call will be available through August 9, 2017, 11:30 AM EDT by calling (855) 859-2056 (U.S.) or (404) 537-3406 (international), using passcode 61524873. 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.

(in thousands, except shares and per share data)
Three Months Ended June 30, Six Months Ended June 30,
2017 2016 2017 2016
Revenue$1,963 $ $3,435 $
Revenue, related party 779 1,848
Total revenue1,963 779 3,435 1,848
Cost of revenue990 672 1,813 1,294
Gross profit973 107 1,622 554
Operating expenses:
Research and development2,760 2,586 5,160 5,098
Selling, general and administrative5,853 1,596 11,793 2,975
Total operating expenses8,613 4,182 16,953 8,073
Loss from operations(7,640) (4,075) (15,331) (7,519)
Interest expense, net(35) (143) (89) (290)
Gain from change in fair value of warrant liability 96 119
Other expense, net(55) (9) (55) (22)
Net loss(7,730) (4,131) (15,475) (7,712)
Other comprehensive (loss) income 6 (18) 4
Net loss and comprehensive loss$(7,730) $(4,125) $(15,493) $(7,708)
Net loss per share, basic and diluted$(0.46) $(7.15) $(0.93) $(13.37)
Weighted-average common shares outstanding, basic and diluted16,637,335 577,659 16,599,891 576,757

(in thousands, except shares and par value data)
June 30, 2017 December 31, 2016
Current assets:
Cash and cash equivalents$5,827 $72,975
Short-term investments54,898 2,500
Accounts receivable, net1,757
Accounts receivable, related party 515
Inventory747 827
Other current assets705 1,244
Total current assets63,934 78,061
Property and equipment, net1,044 717
Total assets$64,978 $78,778
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses$697 $595
Accrued compensation2,381 2,497
Accrued clinical expenses192 101
Deferred revenue206 121
Other current liabilities1,341 1,278
Total current liabilities4,817 4,592
Deferred rent39
Long-term loan, excluding current portion9,901 9,881
Total long-term liabilities9,940 9,881
Total liabilities14,757 14,473
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value; 300,000,000 shares authorized as of June 30, 2017
and December 31, 2016; 16,822,416 and 16,773,205 shares issued and outstanding as of
June 30, 2017 and December 31, 2016, respectively
17 17
Additional paid-in capital142,307 140,898
Accumulated other comprehensive loss(19) (1)
Accumulated deficit(92,084) (76,609)
Total stockholders’ equity50,221 64,305
Total liabilities and stockholders’ equity
$64,978 $78,778

(in thousands)
Six Months Ended June 30,
2017 2016
Operating activities:
Net loss$(15,475) $(7,712)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization136 90
Stock-based compensation1,079 145
Loss on disposal of fixed assets 13
Change in fair value of warrant liability (119)
Amortization of investment premium, net11 55
Amortization of debt discount20 43
Change in operating assets and liabilities:
Accounts receivable(1,757)
Accounts receivable from related party515 51
Inventory80 (114)
Other current assets539 46
Accounts payable and accrued expenses58 60
Accrued compensation(116) (1,014)
Accrued clinical expenses91 (301)
Deferred revenue85
Other current and long term liabilities326 94
Net cash used in operating activities(14,408) (8,663)
Investing activities:
Purchases of short-term investments(64,928) (14,979)
Maturities of short-term investments12,500 10,150
Purchase of property and equipment(559) (63)
Net cash used in investing activities(52,987) (4,892)
Financing activities:
Issuance of preferred stock for cash, net of offering costs 14,517
Proceeds from stock issued under employee stock purchase plan210
Proceeds from sale of common stock upon exercise of stock options37 11
Net cash provided by financing activities247 14,528
Net (decrease) increase in cash and cash equivalents(67,148) 973
Cash and cash equivalents at beginning of period72,975 3,356
Cash and cash equivalents at end of period$5,827 $4,329
Supplemental cash flow information:
Interest paid$270 $266
Non-cash investing and financing activities:
Property and equipment in accounts payable$96 $121

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

Source:Obalon Therapeutics, Inc.