SAN DIEGO, Aug. 02, 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 second quarter ended June 30, 2018.

Second Quarter 2018 highlights:

  • Total revenue of $2.7 million increased 103% vs Q1-18 and 39% vs Q2-17
  • US revenue of $1.5 million increased 211% vs Q1-18 and decreased 20% vs Q2-17
  • US Reorders were $1.0 million, or 64% of US sales, an increase of 221% vs Q1-18 and 61% vs Q2-17
  • Operating loss of $9.6 million decreased 20% vs $12.1 million in Q1-18 and increased 26% vs $7.6 million in Q2-17
  • Amended loan agreement providing access to additional $10.0 million
  • Filed PMA-S response for Touch dispenser
  • Filed PMA-S for Touch-compatible Navigation system

The Company reported revenue of $2.7 million for the second quarter of 2018, compared to $1.3 million for the first quarter of 2018 and $2.0 million for the second quarter of 2017. Net loss was reported at $9.8 million for the second quarter of 2018, compared to $12.1 million for the first quarter of 2018 and $7.7 million for the second quarter of 2017. Net loss per share for the second quarter of 2018 was $0.57 as compared to $0.71 for the first quarter of 2018 and $0.46 for the second quarter of 2017.

Cost of revenue was $1.7 million for the second quarter of 2018, up from $0.8 million for the first quarter of 2018 and $1.0 million for second quarter of 2017. Gross profit for the second quarter of 2018 was $1.0 million, resulting in a gross margin of 37%, compared to a gross profit of $0.6 million and gross margin of 43% for the first quarter of 2018 and a gross profit of $1.0 million and gross margin of 50% for the second quarter of 2017.

Research and Development expense for the second quarter of 2018 totaled $3.4 million, up from $2.6 million for the first quarter of 2018 and $2.8 million for the second quarter of 2017.  Selling, General and Administrative expense decreased to $7.3 million for the second quarter of 2018 as compared to $10.0 million for the first quarter of 2018 and increased from $5.9 million for the second quarter of 2017.

Operating loss for the second quarter of 2018 was $9.6 million, down from $12.1 million for the first quarter of 2018, but up from $7.6 million for the second quarter of 2017.

As of June 30, 2018, cash, cash equivalents and short-term investments were $25.2 million.

“We are pleased with the increase in revenue compared to Q1-18, especially with reorder revenues from existing customers,” said Bill Plovanic, CFO of Obalon. “In Q2-18, we reduced our cash usage by $2.7 million compared to Q1-18. We believe this, along with the $25.2 million cash on hand at the end of Q2-18 and access to an additional $10.0 million of debt, furthers our ability to support the continued development of this novel and exciting non-surgical treatment for obesity.”

Call Information
A conference call to discuss second quarter 2018 financial results is scheduled for today, August 2, 2018, 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 6384879.  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/jud3fsps.

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 June 30, Six Months Ended June 30,
 2018 2017 2018 2017
 (Unaudited)
Revenue$2,732  $1,963  $4,078  $3,435 
Cost of revenue1,732  990  2,501  1,813 
Gross profit1,000  973  1,577  1,622 
Operating expenses:       
Research and development3,352  2,760  5,991  5,160 
Selling, general and administrative7,250  5,853  17,256  11,793 
Total operating expenses10,602  8,613  23,247  16,953 
Loss from operations(9,602) (7,640) (21,670) (15,331)
Interest expense, net(57) (35) (94) (89)
Other expense(94) (55) (115) (55)
       Net loss(9,753) (7,730) (21,879) (15,475)
Other comprehensive income (loss)—  —  6  (18)
Net loss and comprehensive loss$(9,753) $(7,730) $(21,873) $(15,493)
Net loss per share, basic and diluted$(0.57) $(0.46) $(1.29) $(0.93)
Weighted-average common shares outstanding, basic and diluted17,039,876  16,637,335  17,013,529  16,599,891 


OBALON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except shares and par value data)

 June 30, 2018 December 31, 2017
Assets(Unaudited)
Current assets:   
Cash and cash equivalents$24,212  $21,108 
Short-term investments997  23,292 
Accounts receivable, net of allowance of $433 and $239, respectively3,049  4,223 
Inventory1,842  1,418 
Other current assets857  1,714 
Total current assets30,957  51,755 
Property and equipment, net1,514  1,346 
Total assets$32,471  $53,101 
Liabilities and Stockholders’ Equity   
Current liabilities:   
Accounts payable$1,445  $1,276 
Accrued compensation2,132  4,494 
Deferred revenue302  510 
Other current liabilities2,552  1,773 
Current portion of long-term loan3,965  1,958 
Total current liabilities10,396  10,011 
  Deferred rent44  13 
  Long-term loan, excluding current portion5,980  7,964 
Total long-term liabilities6,024  7,977 
Total liabilities16,420  17,988 
Commitments and contingencies   
Stockholders’ equity:   
Common stock, $0.001 par value; 100,000,000 and 300,000,000 shares authorized as of June 30, 2018 and December 31, 2017, respectively; 17,858,704 and 17,500,604 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively18  18 
Additional paid-in capital149,285  146,474 
Accumulated other comprehensive gain (loss)1  (5)
Accumulated deficit(133,253) (111,374)
Total stockholders’ equity16,051  35,113 
Total liabilities and stockholders’ equity$32,471  $53,101 


OBALON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

 Six Months Ended June 30,
 2018 2017
 (Unaudited)
Operating activities:   
Net loss$(21,879) $(15,475)
Adjustments to reconcile net loss to net cash used in operating activities:   
Depreciation276  136 
Stock-based compensation2,603  1,079 
Loss on disposal of fixed assets107  — 
(Accretion) amortization of investment (discount) premium, net(7) 11 
Amortization of debt discount22  20 
Change in operating assets and liabilities:   
Accounts receivable, net1,174  (1,757)
Accounts receivable from related party—  515 
Inventory(424) 80 
Other current assets857  539 
Accounts payable275  58 
Accrued compensation(2,362) (116)
Accrued clinical expenses418  91 
Deferred revenue(208) 85 
Other current and long term liabilities424  326 
    Net cash used in operating activities(18,724) (14,408)
Investing activities:   
Purchases of short-term investments(995) (64,928)
Maturities of short-term investments23,301  12,500 
Purchase of property and equipment(657) (559)
   Net cash provided by (used in) investing activities21,649  (52,987)
Financing activities:   
Proceeds from stock issued under employee stock purchase plan148  210 
Proceeds from sale of common stock upon exercise of stock options31  37 
   Net cash provided by financing activities179  247 
   Net increase (decrease) in cash and cash equivalents3,104  (67,148)
Cash and cash equivalents at beginning of period21,108  72,975 
Cash and cash equivalents at end of period$24,212  $5,827 
Supplemental cash flow information:   
Interest paid$307  $270 
Property and equipment in accounts payable$106  $96 

 

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