SAN DIEGO, July 24, 2019 (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 financial results for the second quarter ended June 30, 2019.
Second Quarter 2019 highlights:
- Further streamlined operations and spend to support new commercial strategy
- Promoted William Plovanic to President and Chief Financial Officer
- Appointed Robert MacDonald as Chief Retail Officer to create network of Obalon-branded retail outlets
- Signed store lease to begin the development of Obalon's first Company-owned retail weight loss center targeted to open in Fall 2019
- Raised $8.8 million in equity capital
- Reduced debt by $15 million
"We worked throughout the second quarter to restructure the organization, making key leadership changes, significantly reducing expenses, and improving our balance sheet in preparation of the roll out of our new business model later this fall,” said William J. Plovanic, Obalon’s President and Chief Financial Officer. “There continues to be significant patient interest in our proprietary and patented FDA-approved weight loss solution, and our strategy to create a network of retail centers dedicated to treatment with the Obalon Balloon System is intended make this safe and effective technology available to obese individuals who are frustrated with not being able to lose weight with diet and exercise-alone and who are not interested in surgery. I look forward to providing more detail on the Obalon retail center strategy on our earnings call today.”
Revenues for the second quarter of 2019 was $0.4 million, compared to $2.7 million for the second quarter of 2018, as the Company restructured its operations, eliminating its direct field sales force in advance of a transition to its new strategy and business model. Obalon intends to create a network of Company-owned retail weight loss centers dedicated to delivering the Obalon Balloon System. Net loss for the second quarter of 2019 was $6.8 million, compared to $9.8 million for the second quarter of 2018. Net loss per share for the second quarter of 2019 was $0.25, compared to $0.57 for the second quarter of 2018.
Cost of revenue was $0.7 million for the second quarter of 2019, down from $1.7 million for the second quarter of 2018. Gross deficit for the second quarter of 2019 was $0.3 million, compared to a gross profit of $1.0 million for the second quarter of 2018.
Research and Development expense for the second quarter of 2019 totaled $1.8 million, down from $3.4 million for the second quarter of 2018. Selling, General and Administrative expense decreased to $4.3 million for the second quarter of 2019, compared to $7.3 million for the second quarter of 2018.
Operating loss for the second quarter of 2019 was $6.4 million, down from a loss of $9.6 million for the second quarter of 2018.
As of June 30, 2019, the Company had cash and cash equivalents of $13.5 million and $5.0 million of debt outstanding under its loan and security agreement. The terms of the loan and security agreement require the Company to maintain a cash balance in its account with the lender in an amount equal to the amount of outstanding indebtedness.
Call Information
A conference call to discuss second quarter 2019 financial results is scheduled for today, July 24, 2019, 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 1787979. 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/mmc/p/vvo9cozg.
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. For more information, please visit http://www.obalon.com.
For Obalon Therapeutics, Inc.
Investor Contact:
William Plovanic
President and Chief Financial Officer
Obalon Therapeutics, Inc.
Office: +1 760 607 5103
wplovanic@obalon.com
OBALON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except shares and per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||
| (Unaudited) | |||||||||||||||
| Revenue | $ | 386 | $ | 2,732 | $ | 2,161 | $ | 4,078 | |||||||
| Cost of revenue | 679 | 1,732 | 1,911 | 2,501 | |||||||||||
| Gross (deficit) profit | (293 | ) | 1,000 | 250 | 1,577 | ||||||||||
| Operating expenses: | |||||||||||||||
| Research and development | 1,788 | 3,352 | 4,227 | 5,991 | |||||||||||
| Selling, general and administrative | 4,332 | 7,250 | 10,536 | 17,256 | |||||||||||
| Total operating expenses | 6,120 | 10,602 | 14,763 | 23,247 | |||||||||||
| Loss from operations | (6,413 | ) | (9,602 | ) | (14,513 | ) | (21,670 | ) | |||||||
| Interest expense, net | (295 | ) | (57 | ) | (485 | ) | (94 | ) | |||||||
| Other expense, net | (59 | ) | (94 | ) | (59 | ) | (115 | ) | |||||||
| Net loss | (6,767 | ) | (9,753 | ) | (15,057 | ) | (21,879 | ) | |||||||
| Other comprehensive income | — | — | — | 6 | |||||||||||
| Net loss and comprehensive loss | $ | (6,767 | ) | $ | (9,753 | ) | $ | (15,057 | ) | $ | (21,873 | ) | |||
| Net loss per share, basic and diluted | $ | (0.25 | ) | $ | (0.57 | ) | $ | (0.60 | ) | $ | (1.29 | ) | |||
| Weighted-average common shares outstanding, basic and diluted | 26,877,568 | 17,039,876 | 25,005,475 | 17,013,529 | |||||||||||
OBALON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except shares and par value data)
| June 30, 2019 | December 31, 2018 | ||||||
| Assets | (Unaudited) | ||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 13,513 | $ | 21,187 | |||
| Short-term investments | — | 2,548 | |||||
| Accounts receivable, net of allowance of $900 and $665, respectively | 447 | 870 | |||||
| Inventory | 2,107 | 1,580 | |||||
| Other current assets | 954 | 2,462 | |||||
| Total current assets | 17,021 | 28,647 | |||||
| Property and equipment, net | 1,038 | 1,739 | |||||
| Lease right-of-use assets | 1,140 | — | |||||
| Total assets | $ | 19,199 | $ | 30,386 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 1,082 | $ | 1,159 | |||
| Accrued compensation | 1,093 | 3,805 | |||||
| Deferred revenue | 320 | 352 | |||||
| Other current liabilities | 2,127 | 1,985 | |||||
| Current portion of lease liabilities | 468 | — | |||||
| Current portion of long-term loan | 5,000 | 9,930 | |||||
| Total current liabilities | 10,090 | 17,231 | |||||
| Lease liabilities long-term | 722 | — | |||||
| Other long-term liabilities | — | 48 | |||||
| Total long-term liabilities | 722 | 48 | |||||
| Total liabilities | 10,812 | 17,279 | |||||
| Commitments and contingencies | |||||||
| Stockholders’ equity: | |||||||
| Common stock, $0.001 par value; 100,000,000 shares authorized as of June 30, 2019 and December 31, 2018; 35,582,614 and 23,513,292 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively | 36 | 23 | |||||
| Additional paid-in capital | 172,162 | 161,838 | |||||
| Accumulated deficit | (163,811 | ) | (148,754 | ) | |||
| Total stockholders’ equity | 8,387 | 13,107 | |||||
| Total liabilities and stockholders’ equity | $ | 19,199 | $ | 30,386 | |||
OBALON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| Six Months Ended June 30, | |||||||
| 2019 | 2018 | ||||||
| (Unaudited) | |||||||
| Operating activities: | |||||||
| Net loss | $ | (15,057 | ) | $ | (21,879 | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
| Depreciation | 256 | 276 | |||||
| Stock-based compensation | 1,641 | 2,603 | |||||
| Loss on disposal of fixed assets | 95 | 107 | |||||
| Amortization of right-of-use asset | 186 | — | |||||
| Accretion of investment discount, net | (2 | ) | (7 | ) | |||
| Amortization of debt discount | 70 | 22 | |||||
| Change in operating assets and liabilities: | |||||||
| Accounts receivable, net | 423 | 1,174 | |||||
| Inventory | (157 | ) | (424 | ) | |||
| Other current assets | 1,760 | 857 | |||||
| Accounts payable | (191 | ) | 275 | ||||
| Accrued compensation | (2,712 | ) | (2,362 | ) | |||
| Deferred revenue | (32 | ) | (208 | ) | |||
| Lease liabilities, net | (136 | ) | — | ||||
| Other current and long term liabilities | (142 | ) | 842 | ||||
| Net cash used in operating activities | (13,998 | ) | (18,724 | ) | |||
| Investing activities: | |||||||
| Purchases of short-term investments | — | (995 | ) | ||||
| Maturities of short-term investments | 2,550 | 23,301 | |||||
| Purchase of property and equipment | (20 | ) | (657 | ) | |||
| Net cash provided by (used in) investing activities | 2,530 | 21,649 | |||||
| Financing activities: | |||||||
| Proceeds from long-term loan | 10,000 | — | |||||
| Payment on long-term loan | (15,000 | ) | — | ||||
| Proceeds from issuance of common stock, net of issuance costs | 8,793 | — | |||||
| Proceeds from stock issued under employee stock purchase plan | — | 148 | |||||
| Proceeds from sale of common stock upon exercise of stock options | 1 | 31 | |||||
| Net cash provided by financing activities | 3,794 | 179 | |||||
| Net (decrease) increase in cash and cash equivalents | (7,674 | ) | 3,104 | ||||
| Cash and cash equivalents at beginning of period | 21,187 | 21,108 | |||||
| Cash and cash equivalents at end of period | $ | 13,513 | $ | 24,212 | |||
| Supplemental cash flow information: | |||||||
| Interest paid | $ | 563 | $ | 307 | |||
| Unpaid issuance costs | $ | 377 | $ | — | |||
| Property and equipment in accounts payable | $ | — | $ | 106 | |||