ReShape Lifesciences Inc. (Nasdaq:
RSLS), the premier physician-led weight loss and metabolic
health-solutions company, today reported financial results for the
third quarter ended September 30, 2023 and provided a corporate
strategic update.
Third Quarter 2023 and Subsequent
Highlights
- In November, in response to
continued pressure on the company’s revenue caused by the adoption
of glucagon-like peptide 1 (GLP-1) receptor agonists, ReShape is
reorganizing the company and has identified cost reductions,
including a Reduction in Force (RIF), totaling approximately $8
million for 2024, alone, which will preserve cash and extend the
company runway.
- In October, completed a public
offering, raising $2.8 million in net proceeds. Combined with the
cost reductions mentioned above, this will extend the company’s
cash runway in 2024.
- In September, signed an exclusive,
royalty-bearing license agreement with Biorad Medysis, Pvt. Ltd.
(Biorad) to manufacture, commercialize and distribute the Obalon®
Gastric Balloon System in India, Pakistan, Bangladesh, Nepal,
Bhutan, Sri Lanka, and the Maldives. The license agreement provides
$200,000 in upfront payments from Biorad to ReShape and ongoing
license payments of 4% on gross sales of the Obalon Balloon System
in these territories.
- In September, significantly
strengthened the company’s patent portfolio related to its Obalon®
Balloon System. Specifically, the U.S. Patent and Trademark Office
(USPTO) granted one patent (No. 11,737,899) and provided a Notice
of Allowance for two additional patents (patent applications
16/993,110 and 17/581,792), providing foundational protection.
“While the growing popularity of GLP-1
prescriptions for weight loss treatment has put pressure on several
markets, including bariatrics, we believe that GLP-1 adoption is
expanding the medical weight loss market by vastly reducing the
stigma that often occurs around obesity and medical intervention.
This has helped increase the number of people seeking medical
attention for this disease, especially by those who have avoided
surgery in the past,” stated Paul F. Hickey, President and Chief
Executive Officer of ReShape Lifesciences®. “Given the growing body
of evidence pointing to the fact that weight loss due to GLP-1
usage has limitations related to weight loss, co-morbidities, and
accessibility, we believe that the market opportunity for the
Lap-Band® will increase. From a continuum of care perspective,
individuals with obesity are likely potential candidates for
bariatric surgery as the next viable anatomy preserving weight loss
treatment. To help secure our positioning and considering the sales
headwinds from GLP-1 drugs, we have taken bold measures to revamp
the organization and achieve cost cuts totaling approximately $8.0
million, representing over 40% reduction in operating expenses for
2024, alone. The changes are bold, necessary, and indicative of our
commitment to our first growth pillar, which were established in
late 2022. In point of fact, with these 2024 reductions, the
company’s core operating expense reductions between 2022 and 2024
are estimated at $22 million, or 70%. These reductions will allow
us to invest in our growth drivers and extend our cash runway. To
that end, our lead generation program supported by AI marketing
automation software is now proving to be cost effective for
marketing outreach in markets with our Lap-Band surgeon
advocates.”
Mr. Hickey continued, “There is much to look
forward to as we move towards 2024 and we remain optimistic about
the growth potential for the company. With that in mind, we are
working to identify strategic merger and acquisition partnership
alternatives to continue to scale ReShape. At the same time, we
believe we are well positioned with our current U.S. Food and Drug
Administration (FDA) approved Lap-Band® system, which provides a
minimally invasive, long-term treatment for obesity and is a safer
surgical alternative to more invasive and extreme surgical
procedures. Importantly, we filed a Premarket Approval (PMA)
supplement application with the FDA in June for the next-generation
Lap-Band® 2.0 Flex and expect to receive approval from the FDA by
year-end or early in 2024. We believe, based on surgeon feedback,
that our Lap-Band 2.0 Flex will be a growth catalyst for the
company’s Lap-Band® franchise, once approved. Also of note, in
September we signed an exclusive agreement with Biorad to
manufacture, commercialize and distribute the Obalon® Gastric
Balloon System in the Indian subcontinent. This royalty-bearing
agreement represents the first step towards reintroducing our
patent protected, non-surgical, minimally invasive, Obalon® System
to the global marketplace.”
Third Quarter and Nine months Ended
September 30, 2023, Financial and Operating Results
Revenue totaled $2.2 million
for the three months ended September 30, 2023, which represents a
decrease of $0.6 million compared to the same period in 2022.
Revenue totaled $6.7 million for the nine months ended September
30, 2023 a decrease of $1.4 million compared to the same period in
2022. The growing popularity of GLP-1 prescription drugs for weight
loss treatment is the primary reason for a decrease in sales volume
in the U.S. and internationally. During the nine months ended
September 30, 2023, the company focused on its new marketing
strategies through targeted and AI supported digital media
campaigns near bariatric surgical centers, while reducing costs and
increasing efficiencies. The company expects that these efforts
will come to fruition during the fourth quarter of 2023 and the
beginning of 2024. The company’s continued focus on increasing
demand for the Lap-Band® system and the recently launched three new
sizes of calibration tubes are expected to positively impact
revenues. Additionally, the company anticipates receiving FDA
approval for the Lap-Band® 2.0 Flex later this year or early in
2024, followed by a U.S. product launch that should contribute to
increased sales going forward.
Gross Profit for the three
months ended September 30, 2023, was $1.3 million, compared to $2.1
million for the same period in 2022, a decrease of $0.8 million.
Gross profit as a percentage of total revenue for the three months
ended September 30, 2023, was 59.8% compared to 75.1% for the same
period in 2022. Gross profit for the nine months ended September
30, 2023 was $3.7 million, compared to $5.2 million for the same
period in 2022, a decrease of $1.5 million. Gross profit as a
percentage of total revenue for the nine months ended September 30,
2023, was 55.3% compared to 64.0% for the same period in 2022. The
decrease in gross profit percentage is due to the decrease in sales
volume, primarily related to GLP-1 drugs coming to market.
Sales and Marketing Expenses
for the three months ended September 30, 2023, decreased by $0.8
million to $1.8 million, compared to $2.6 million for the same
period in 2022. Sales and marketing expenses for the nine months
ended September 30, 2023 decreased by $5.8 million to approximately
$6.1 million compared to $11.9 million for the same period in 2022.
The decrease of $0.8 million for the three months ended and $5.8
million for the nine months ended September 30, 2023 is primarily
due to a decrease in advertising and marketing expenses of $0.7
million and $4.6 million for the three and nine months ended
September 30, 2023, respectively, as the company has reevaluated
its marketing approach and has moved to a targeted digital
marketing campaign. Additionally there were reductions in payroll
expenditures due to changes in sales personnel, lower sales, lower
commissions and travel expenses.
General and Administrative
Expenses for the three months ended September 30, 2023,
decreased by $1.7 million to approximately $2.1 million, compared
to $3.8 million for the same period in 2022. General and
administrative expenses for the nine months ended September 30,
2023, decreased by $4.3 million to approximately $8.7 million,
compared to $13.0 million for the same period in 2022. The
nine-month decrease is primarily due to the company recording $2.0
million in litigation settlement losses during the three months
ended June 30, 2022. The decrease for both three and nine months is
primarily due to a reduction in payroll-related expenses, including
a reduction in stock-based compensation and personnel changes.
There was a reduction in intangible asset amortization costs, as
the company impaired the finite intangible assets during the fourth
quarter of 2022, and the company also had a decrease in rent and
insurance due to ending the lease of its former Carlsbad, CA
location.
Research and Development
Expenses for the three months ended September 30, 2023,
remained consistent with the same period in 2022, with a slight
decrease primarily in clinical trials and professional services.
Research and development expenses for the nine months ended
September 30, 2023, decreased by $0.5 million to $1.6 million,
compared to $2.1 million for the same period in 2022. The decrease
is primarily due to a decrease in payroll expenses.
Non-GAAP adjusted EBITDA loss
was $2.9 million for the three months ended September 30, 2023,
compared to a loss of $4.2 million for the same period last
year.
Non-GAAP adjusted EBIDTA loss was $12.0 million
for the nine months ended September 30, 2023, compared to a loss of
$19.2 million for the same period last year.
Cash and Cash Equivalents as of
September 30, 2023, were $1.5 million and the company remains debt
free on its balance sheet. With these funds, and the $2.8 million
in net proceeds from the October public offering, combined with the
cost reductions mentioned above, this will extend the company’s
cash runway in 2024.
Conference Call Information
Management will host a conference call to
discuss ReShape’s financial and
operational results today at 5:00 pm ET and will be
joined by a member of ReShape’s Scientific Advisory Board, Caroline
Apovian, M.D., Co-Director at the Center for Weight Management and
Wellness in the Division of Endocrinology, Diabetes and
Hypertension at Brigham and Women’s Hospital in Boston, MA, and a
Professor of Medicine at Harvard Medical School.
To participate in the conference call please
register with the following Registration Link, and dial-in details
will be provided.
Participants using this feature are requested to
dial into the conference call fifteen minutes ahead of time to
avoid delays.
An archived replay will also be available on the
“Events and Presentations” section of ReShape’s website at:
https://ir.reshapelifesciences.com/events-and-presentations.
About ReShape Lifesciences®
ReShape Lifesciences® is America’s premier weight loss and
metabolic health-solutions company, offering an integrated
portfolio of proven products and services that manage and treat
obesity and metabolic disease. The FDA-approved Lap-Band® System
provides minimally invasive, long-term treatment of obesity and is
an alternative to more invasive surgical stapling procedures such
as the gastric bypass or sleeve gastrectomy. The investigational
Diabetes Bloc-Stim Neuromodulation™ (DBSN™) system utilizes a
proprietary vagus nerve block and stimulation technology platform
for the treatment of type 2 diabetes and metabolic disorders. The
Obalon® balloon technology is a non-surgical, swallowable,
gas-filled intra-gastric balloon that is designed to provide
long-lasting weight loss. For more information, please visit
www.reshapelifesciences.com.
Forward-Looking Safe Harbor
Statement This press release may contain forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Actual results could differ materially from
those discussed due to known and unknown risks, uncertainties, and
other factors. These forward-looking statements generally can be
identified by the use of words such as "expect," "plan,"
"anticipate," "could," "may," "intend," "will," "continue,"
"future," other words of similar meaning and the use of future
dates. Forward-looking statements in this press release include
statements about the company’s expectation that the market
opportunity for Lap-Band will increase, the expected timing of the
FDA review process for the Lap-Band® 2.0, the expected adoption of
the Lap-Band® 2.0 by surgeons, and the expectation for increased
revenue. These and additional risks and uncertainties are described
more fully in the company's filings with the Securities and
Exchange Commission, including those factors identified as "risk
factors" in our most recent Annual Report on Form 10-K and
subsequent Quarterly Reports on Form 10-Q. We are providing this
information as of the date of this press release and do not
undertake any obligation to update any forward-looking statements
contained in this document as a result of new information, future
events or otherwise, except as required by law.
Non-GAAP DisclosuresIn addition
to the financial information prepared in conformity with GAAP, we
provide certain historical non-GAAP financial information.
Management believes that these non-GAAP financial measures assist
investors in making comparisons of period-to-period operating
results.
Management believes that the presentation of
this non-GAAP financial information provides investors with greater
transparency and facilitates comparison of operating results across
a broad spectrum of companies with varying capital structures,
compensation strategies, and amortization methods, which provides a
more complete understanding of our financial performance,
competitive position, and prospects for the future. However, the
non-GAAP financial measures presented in this release have certain
limitations in that they do not reflect all of the costs associated
with the operations of our business as determined in accordance
with GAAP. Therefore, investors should consider non-GAAP financial
measures in addition to, and not as a substitute for, or as
superior to, measures of financial performance prepared in
accordance with GAAP. Further, the non-GAAP financial measures
presented by the company may be different from similarly named
non-GAAP financial measures used by other companies.
Adjusted EBITDAManagement uses
Adjusted EBITDA in its evaluation of the company’s core results of
operations and trends between fiscal periods and believes that
these measures are important components of its internal performance
measurement process. Adjusted EBITDA is defined as net loss before
interest, taxes, depreciation and amortization, stock-based
compensation, and other one-time costs. Management uses Adjusted
EBITDA in its evaluation of the company’s core results of
operations and trends between fiscal periods and believes that
these measures are important components of its internal performance
measurement process. Therefore, investors should consider non-GAAP
financial measures in addition to, and not as a substitute for, or
as superior to, measures of financial performance prepared in
accordance with GAAP. Further, the non-GAAP financial measures
presented by the company may be different from similarly named
non-GAAP financial measures used by other companies.
CONTACTSReShape Lifesciences Investor
Contact:Thomas StankovichChief Financial
Officer949-276-6042ir@ReShapeLifesci.com
Investor Relations Contact:Rx
Communications GroupMichael
Miller(917)-633-6086mmiller@rxir.com
RESHAPE LIFESCIENCES INC.Consolidated
Balance Sheets (dollars in thousands; unaudited) |
|
|
September 30, |
|
December 31, |
|
2023 |
|
|
2022 |
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
1,449 |
|
|
$ |
3,855 |
|
Restricted cash |
|
100 |
|
|
|
100 |
|
Accounts and other receivables |
|
2,153 |
|
|
|
2,180 |
|
Inventory |
|
3,204 |
|
|
|
3,611 |
|
Prepaid expenses and other current assets |
|
493 |
|
|
|
165 |
|
Total current assets |
|
7,399 |
|
|
|
9,911 |
|
Property and equipment,
net |
|
70 |
|
|
|
698 |
|
Operating lease right-of-use
assets |
|
274 |
|
|
|
171 |
|
Deferred tax asset, net |
|
55 |
|
|
|
56 |
|
Other intangible assets,
net |
|
— |
|
|
|
260 |
|
Other assets |
|
29 |
|
|
|
46 |
|
Total assets |
$ |
7,827 |
|
|
$ |
11,142 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
1,462 |
|
|
$ |
1,926 |
|
Accrued and other liabilities |
|
2,734 |
|
|
|
5,040 |
|
Warranty liability, current |
|
163 |
|
|
|
344 |
|
Operating lease liabilities, current |
|
110 |
|
|
|
171 |
|
Total current liabilities |
|
4,469 |
|
|
|
7,481 |
|
Operating lease liabilities,
noncurrent |
|
175 |
|
|
|
— |
|
Common stock warrant
liability |
|
100 |
|
|
|
— |
|
Total liabilities |
|
4,744 |
|
|
|
7,481 |
|
Stockholders’ equity: |
|
|
|
|
|
Preferred stock: |
|
|
|
|
|
Series C convertible preferred stock |
|
— |
|
|
|
— |
|
Common stock |
|
3 |
|
|
|
1 |
|
Additional paid-in capital |
|
637,050 |
|
|
|
627,935 |
|
Accumulated deficit |
|
(633,876 |
) |
|
|
(624,187 |
) |
Accumulated other comprehensive loss |
|
(94 |
) |
|
|
(88 |
) |
Total stockholders’ equity |
|
3,083 |
|
|
|
3,661 |
|
Total liabilities and stockholders’ equity |
$ |
7,872 |
|
|
$ |
11,142 |
|
|
RESHAPE LIFESCIENCES INC. Consolidated
Statements of Operations (dollars in thousands;
unaudited) |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
$ |
2,155 |
|
|
$ |
2,798 |
|
|
$ |
6,696 |
|
|
$ |
8,130 |
|
Cost of revenue |
|
867 |
|
|
|
697 |
|
|
|
2,990 |
|
|
|
2,928 |
|
Gross profit |
|
1,288 |
|
|
|
2,101 |
|
|
|
3,706 |
|
|
|
5,202 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
1,791 |
|
|
|
2,605 |
|
|
|
6,150 |
|
|
|
11,936 |
|
General and administrative |
|
2,058 |
|
|
|
3,784 |
|
|
|
8,724 |
|
|
|
13,037 |
|
Research and development |
|
542 |
|
|
|
583 |
|
|
|
1,576 |
|
|
|
2,075 |
|
Impairment of long-lived assets |
|
777 |
|
|
|
7,429 |
|
|
|
777 |
|
|
|
7,429 |
|
(Gain) loss on disposal of assets, net |
|
— |
|
|
|
1 |
|
|
|
(33 |
) |
|
|
383 |
|
Total operating expenses |
|
5,168 |
|
|
|
14,402 |
|
|
|
17,194 |
|
|
|
34,860 |
|
Operating loss |
|
(3,880 |
) |
|
|
(12,301 |
) |
|
|
(13,488 |
) |
|
|
(29,658 |
) |
Other expense
(income), net: |
|
|
|
|
|
|
|
|
|
|
|
Interest income, net |
|
(5 |
) |
|
|
(31 |
) |
|
|
(9 |
) |
|
|
(47 |
) |
Gain on changes in fair value of liability warrants |
|
(412 |
) |
|
|
— |
|
|
|
(3,850 |
) |
|
|
— |
|
Loss on foreign currency exchange, net |
|
68 |
|
|
|
279 |
|
|
|
47 |
|
|
|
467 |
|
Other |
|
— |
|
|
|
— |
|
|
|
(8 |
) |
|
|
(9 |
) |
Loss before income tax
provision |
|
(3,531 |
) |
|
|
(12,549 |
) |
|
|
(9,668 |
) |
|
|
(30,069 |
) |
Income tax expense
(benefit) |
|
3 |
|
|
|
(363 |
) |
|
|
21 |
|
|
|
(324 |
) |
Net loss |
$ |
(3,534 |
) |
|
$ |
(12,186 |
) |
|
$ |
(9,689 |
) |
|
$ |
(29,745 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table contains a reconciliation of GAAP net loss
to non-GAAP net loss Adjusted EBITDA attributable to common
stockholders for the three and nine months ended September 30, 2023
and 2022 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
GAAP net loss |
$ |
(3,534 |
) |
|
$ |
(12,186 |
) |
|
$ |
(9,689 |
) |
|
$ |
(29,745 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Interest income, net |
|
(5 |
) |
|
|
(31 |
) |
|
|
(9 |
) |
|
|
(47 |
) |
Income tax expense (benefit) |
|
3 |
|
|
|
(363 |
) |
|
|
21 |
|
|
|
(324 |
) |
Depreciation and amortization |
|
50 |
|
|
|
543 |
|
|
|
147 |
|
|
|
1,638 |
|
Stock-based compensation expense |
|
216 |
|
|
|
359 |
|
|
|
656 |
|
|
|
1,847 |
|
Impairment of long-lived assets |
|
777 |
|
|
|
7,429 |
|
|
|
777 |
|
|
|
7,429 |
|
(Gain) loss on disposal of assets, net |
|
— |
|
|
|
1 |
|
|
|
(33 |
) |
|
|
— |
|
Gain on changes in fair value of liability warrants |
|
(412 |
) |
|
|
— |
|
|
|
(3,850 |
) |
|
|
— |
|
Adjusted EBITDA |
$ |
(2,905 |
) |
|
$ |
(4,248 |
) |
|
$ |
(11,980 |
) |
|
$ |
(19,202 |
) |
|
Grafico Azioni ReShape Lifesciences (NASDAQ:RSLS)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni ReShape Lifesciences (NASDAQ:RSLS)
Storico
Da Lug 2023 a Lug 2024