Obalon Announces First Quarter 2017 Financial Results

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| Source: Obalon Therapeutics, Inc.

SAN DIEGO, May 10, 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 financial results for the first quarter ended March 31, 2017. 

The Company reported total revenues of $1.5 million for the first quarter of 2017, compared to $1.1 million for the first quarter of 2016. All revenues in the first quarter 2017 were realized from sale of the Obalon balloon system in the United States, compared to all revenues in the first quarter of 2016 which were from sales to our distributor in the Middle East. Net loss was reported at $7.7 million compared to a net loss of $3.6 million in the first quarter of 2016 and net loss per share for the quarter was $0.47 as compared to net loss per share of $6.22 in the first quarter of 2016.

Cost of goods sold was $0.8 million during the three months ended March 31, 2017, up from $0.6 million for the prior year period. Gross profit for the first quarter of 2017 was $0.6 million, resulting in a gross margin of 44%, compared to a gross profit of $0.4 million and gross margin of 42% for the first quarter of 2016.

Research and Development expense for the first quarter of 2017 totaled $2.4 million, down from $2.5 million in the first quarter of 2016, and Selling, General and Administrative expense increased to $5.9 million for the first quarter, compared to $1.4 million in the first quarter 2016.

Operating loss for the first quarter of 2017 was $7.7 million, compared to an operating loss of $3.4 million for the first quarter of 2016.

At March 31, 2017, cash, cash equivalents and short-term investments were $66.7 million and long-term debt was $10.0 million.

Call Information

A conference call to discuss first quarter 2017 financial results is scheduled for today, May 10, 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 10811814.  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/8wft6fu5. A replay of the call will be available through May 17, 11:30 AM EST by calling (855) 859-2056 (U.S.) or (404) 537-3406 (international), using passcode 10811814.  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.


 

OBALON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except shares and per share data)
 
     Three Months Ended March 31,
     2017 2016
     (Unaudited)
Revenue:       
Revenue    $1,472  $ 
Revenue, related party      1,069 
Total revenue    1,472  1,069 
Cost of revenue    823  622 
Gross profit    649  447 
Operating expenses:       
Research and development    2,400  2,512 
Selling, general and administrative    5,940  1,379 
Total operating expenses    8,340  3,891 
Loss from operations    (7,691) (3,444)
Interest expense, net    (54) (147)
Gain from change in fair value of warrant liability      23 
Other expense, net      (13)
  Net loss    (7,745) (3,581)
Other comprehensive loss    (18) (2)
Net loss and comprehensive loss    $(7,763) $(3,583)
Net loss per share, basic and diluted    $(0.47) $(6.22)
Weighted-average common shares outstanding, basic and diluted                16,562,030  575,855 


OBALON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except shares and par value data)
 
 March 31, 2017 December 31,
2016
 (Unaudited)  
Assets   
Current assets:   
Cash and cash equivalents$41,712  $72,975 
Short-term investments25,008  2,500 
Accounts receivable1,035   
Accounts receivable, related party  515 
Inventory928  827 
Other current assets1,004  1,244 
Total current assets69,687  78,061 
Property and equipment, net903  717 
Total assets$70,590  $78,778 
Liabilities and Stockholders’ Equity   
Current liabilities:   
Accounts payable and accrued expenses$823  $595 
Accrued compensation1,555  2,497 
Accrued clinical expenses122  101 
Deferred revenue171  121 
Other current liabilities960  1,278 
Total current liabilities3,631  4,592 
Long-term loan, excluding current portion9,891  9,881 
Total liabilities13,522  14,473 
Commitments and contingencies   
Stockholders’ equity:   
  Common stock, $0.001 par value; 300,000,000 shares authorized as of March 31, 2017
  and December 31, 2016; 16,773,302 and 16,773,205 shares issued and outstanding as of
  March 31, 2017 and December 31, 2016, respectively
17  17 
Additional paid-in capital141,424  140,898 
Accumulated other comprehensive loss(19) (1)
Accumulated deficit(84,354) (76,609)
Total stockholders’ equity57,068  64,305 
Total liabilities and stockholders’ equity$70,590  $78,778 


OBALON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
    Three Months Ended March 31,
    2017 2016
    (Unaudited)
Operating activities:      
Net loss   $(7,745) $(3,581)
Adjustments to reconcile net loss to net cash used in operating activities:      
Depreciation and amortization   66  45 
Stock-based compensation   463  50 
Loss on disposal of fixed assets     13 
Change in fair value of warrant liability           (23)
Amortization of investment premium, net   3  25 
Amortization of debt discount   10  21 
Change in operating assets and liabilities:      
Accounts receivable   (1,035)  
Accounts receivable from related party   515  (258)
Inventory   (101) (191)
Other current assets   240  (14)
Accounts payable and accrued expenses   217  174 
Accrued compensation   (942) (1,000)
Accrued clinical expenses   21  (241)
Deferred revenue   50   
Other current liabilities   (115) (2)
Net cash used in operating activities   (8,353) (4,982)
Investing activities:      
Purchases of short-term investments   (25,029) (2,008)
Maturities of short-term investments   2,500  5,800 
Purchase of property and equipment   (381) (45)
Net cash (used in) provided by investing activities   (22,910) 3,747 
Financing activities:      
Sale of common stock     2 
Net cash provided by financing activities     2 
Net decrease in cash and cash equivalents   (31,263) (1,233)
Cash and cash equivalents at beginning of period   72,975  3,356 
Cash and cash equivalents at end of period   $41,712  $2,123 
Supplemental cash flow information:      
Interest paid   $130  $132 
Non-cash investing and financing activities:      
Property and equipment in accounts payable   $129  $ 
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