Form: 8-K

Current report

Documents



Exhibit 99.1

Obalon Announces Second Quarter 2017 Financial Results
SAN DIEGO, CA, August 2, 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.



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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 EST 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.
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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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 revenue
1,963

 
779

 
3,435

 
1,848

Cost of revenue
990

 
672

 
1,813

 
1,294

Gross profit
973

 
107

 
1,622

 
554

Operating expenses:
 
 
 

 
 

 
 

Research and development
2,760

 
2,586

 
5,160

 
5,098

Selling, general and administrative
5,853

 
1,596

 
11,793

 
2,975

Total operating expenses
8,613

 
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 diluted
16,637,335

 
577,659

 
16,599,891

 
576,757

























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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 investments
54,898

 
2,500

Accounts receivable, net
1,757

 
—

Accounts receivable, related party
—

 
515

Inventory
747

 
827

Other current assets
705

 
1,244

Total current assets
63,934

 
78,061

Property and equipment, net
1,044

 
717

Total assets
$
64,978

 
$
78,778

Liabilities and Stockholders’ Equity
 

 
 

Current liabilities:
 

 
 

Accounts payable and accrued expenses
$
697

 
$
595

Accrued compensation
2,381

 
2,497

Accrued clinical expenses
192

 
101

Deferred revenue
206

 
121

Other current liabilities
1,341

 
1,278

Total current liabilities
4,817

 
4,592

     Deferred rent
39


—

     Long-term loan, excluding current portion
9,901

 
9,881

Total long-term liabilities
9,940


9,881

Total liabilities
14,757

 
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 capital
142,307

 
140,898

Accumulated other comprehensive loss
(19
)
 
(1
)
Accumulated deficit
(92,084
)
 
(76,609
)
Total stockholders’ equity
50,221

 
64,305

Total liabilities and stockholders’ equity
$
64,978

 
$
78,778











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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 amortization
136

 
90

Stock-based compensation
1,079

 
145

Loss on disposal of fixed assets
—

 
13

Change in fair value of warrant liability
—

 
(119
)
Amortization of investment premium, net
11

 
55

Amortization of debt discount
20

 
43

Change in operating assets and liabilities:
 

 
 

Accounts receivable
(1,757
)
 
—

Accounts receivable from related party
515

 
51

Inventory
80

 
(114
)
Other current assets
539

 
46

Accounts payable and accrued expenses
58

 
60

Accrued compensation
(116
)
 
(1,014
)
Accrued clinical expenses
91

 
(301
)
Deferred revenue
85

 
—

Other current and long term liabilities
326

 
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 investments
12,500

 
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 plan
210

 
—

Proceeds from sale of common stock upon exercise of stock options
37

 
11

Net cash provided by financing activities
247

 
14,528

Net (decrease) increase in cash and cash equivalents
(67,148
)
 
973

Cash and cash equivalents at beginning of period
72,975

 
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

 



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