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.

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,
 2017 2016 2017 2016
 (Unaudited)
Revenue:       
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 


OBALON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except shares and par value data)
 
 June 30, 2017 December 31, 2016
 (Unaudited)  
Assets   
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 



OBALON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
 Six Months Ended June 30,
 2017 2016
 (Unaudited)
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

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