Obalon Announces Fourth Quarter and Full Year 2019 Financial Results

SAN DIEGO, Feb. 27, 2020 (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 fourth quarter and full year ended December 31, 2019.
“2019 was an eventful year for Obalon as we recapitalized and repositioned the business to efficiently leverage our FDA-approved weight loss system through our new retail treatment center business model,” said Bill Plovanic, President and Chief Executive Officer. “We are very pleased with the opening and initial operations of our first treatment center in San Diego California, in addition to the recent opening of our second treatment center in Orange County, California. Our priorities in 2020 are focused on expanding our retail treatment center footprint, raising awareness of the Obalon Centers for Weight Loss™ brand, and working to create shareholder value by building a standardized, repeatable business using the Company-owned or managed retail treatment center model.”Key Accomplishments in 2019:Opened the first Obalon-managed retail treatment center in San DiegoCommercialized Obalon Navigation System and Obalon Touch Inflation DispenserStreamlined operations and spend to support new commercial strategyRepaid all outstanding long-term debtPromoted Bill Plovanic from Chief Financial Officer to President and Chief Executive OfficerAppointed Bob MacDonald as Chief Retail Officer to establish and grow our network of Obalon Centers for Weight Loss facilitiesPromoted Nooshin Hussainy from Vice President of Finance to Chief Financial OfficerEngaged Helmuth T. Billy, MD as Medical Director for Company-managed California retail treatment centersEntered into one-year distribution agreement with distributor for QatarAnnounced clinical data presentation at ASMBS annual meeting at Obesity Week 2019 demonstrating clinically meaningful weight loss for patients treated with the Obalon Balloon System with no serious adverse events reportedFourth Quarter 2019 Results:The Company reported revenue of $0.8 million for the fourth quarter of 2019, compared to $2.0 million for the fourth quarter of 2018. U.S. revenue of $0.5 million represented 62% of revenue as compared to $0.8 million and 41% of revenue in the fourth quarter of 2018. International revenue of $0.3 million represented 38% of revenue in the fourth quarter of 2019, compared to $1.2 million and 59% of revenue in the fourth quarter of 2018.Cost of revenue was $0.6 million during the three months ended December 31, 2019, down from $1.5 million for the prior-year comparable period. Gross profit for the fourth quarter of 2019 was $0.2 million, resulting in a gross margin of 20%, compared to a gross profit of $0.5 million and gross margin of 26% for the fourth quarter of 2018.Research and development expense for the fourth quarter of 2019 totaled $1.5 million, down from $2.3 million in the fourth quarter of 2018. Selling, general and administrative expense decreased to $3.6 million for the fourth quarter of 2019, compared to $6.9 million in the fourth quarter of 2018.Operating loss for the fourth quarter of 2019 was $5.0 million, compared to an operating loss of $8.7 million for the fourth quarter of 2018.Net loss in the fourth quarter of 2019 was $4.9 million, compared to a net loss of $8.8 million in the fourth quarter of 2018. The net loss per share was $0.64 for the fourth quarter of 2019 as compared to the net loss per share of $3.87 for the fourth quarter of 2018.As of December 31, 2019, Obalon had cash and cash equivalents of $14.1 million and no outstanding debt.Full Year 2019 Results:Obalon reported full year 2019 revenue of $3.3 million, as compared to $9.1 million for the full year 2018. U.S. revenue of $2.4 million represented 73% of full year 2019 revenue, decreasing from $4.7 million or 52% of full year 2018 revenue. International revenue of $0.9 million in 2019 equated to 27% of full year 2019 revenue as compared to $4.4 million of international revenue in 2018 which equated to 48% of full year 2018 revenue.Gross profit for the full year 2019 was $0.3 million, resulting in a gross margin of 10%, as compared to $3.7 million for the full year 2018 and a gross margin of 40%.Operating loss for the full year 2019 was $23.2 million, compared to an operating loss of $37.0 million for the full year 2018.Net loss was reported at $23.7 million for the full year 2019 compared to a net loss of $37.4 million for the full year 2018. The net loss per share was $5.03 for the full year 2019, as compared to the net loss per share of $19.64 for the full year 2018.Call InformationA conference call to discuss fourth quarter and full year 2019 financial results is scheduled for today, February 27, 2020, 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 6573298.  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/mmc/p/c8zmkz5x.Cautionary Statement Regarding Forward Looking StatementsThis press release contains forward-looking statements that are not purely historical regarding Obalon’s or its management’s intentions, beliefs, expectations and strategies for the future, including those related to new products and their potential benefits. All forward-looking statements and reasons why results might differ included in this press release are made as of the date of this release, based on information currently available to Obalon, deal with future events, are subject to various risks and uncertainties, and actual results could differ materially from those anticipated in those forward looking statements. The risks and uncertainties that may cause actual results to differ materially from Obalon’s current expectations are more fully described in Obalon’s annual report on Form 10-K for the period ended December 31, 2019, as filed with the Securities and Exchange Commission on February 27, 2020, and its other reports, each as filed with the Securities and Exchange Commission. Except as required by law, Obalon assumes no obligation to update any such forward-looking statement after the date of this report or to conform these forward-looking statements to actual results.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 www.obalon.com.
For Obalon Therapeutics, Inc.Investor Contact: 
William Plovanic 
President & Chief Executive Officer 
Obalon Therapeutics, Inc. 
Office: +1 760 607 5103 
[email protected]



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