ReShape Lifesciences Inc. (Nasdaq:
RSLS), the premier physician-led weight loss and metabolic
health-solutions company, today reported financial results for the
second quarter ended June 30, 2023 and provided a corporate
strategic update.
Second Quarter 2023 and Subsequent
Highlights
- In July, in response to the
Company’s revenue shortfall caused by GLP-1 adoption and other
market factors, ReShape made additional operational improvements to
further invest in growth drivers and reduce expenses, with
annualized savings estimated at more than $4 million.
- In June, the Company held its first
Scientific Advisory Board meeting at which feedback affirmed market
trends and the Company’s three growth pillars were discussed,
including validation of the Lap-Band 2.0 design rationale and
clinical publication strategies.
- In June, signed a preferred partner
agreement with Hive Medical (Hive) for lead optimization software
to improve patient engagement strategy, utilizing AI,
machine-learning, SMS, and patient self-service technology to
increase patient volume and, potentially, Lap-Band® surgeries.
- In June, presented preclinical data
on its proprietary Diabetes Bloc-Stim Neuromodulation™ (DBSN™)
device, which selectively modulates vagal block and stimulation to
the liver and pancreas to manage blood glucose, in an e-poster at
the American Society for Metabolic and Bariatric Surgery (ASMBS)
2023 Annual Meeting.
- In June, submitted a Premarket
Approval (PMA) supplement application to the U.S. Food and Drug
Administration (FDA) for the company’s next generation Lap-Band®
2.0, with an enhanced band reservoir technology that serves as a
relief valve, designed to alleviate discomfort from swallowing
large pieces of food, which may require in-office band
adjustments.
- In April, completed a $2.5 million
registered direct offering with a single institutional investor,
extending the company's cash runway into 2024, creating a
sustainable path to profitability.
- In April, received a Notice of
Allowance from the U.S. Patent and Trademark Office (USPTO) for
patent application 16/792,094, entitled, “Systems and Methods for
Determining Failure of Intragastric Devices,” related to the
company’s Obalon® Balloon System. The patent is expected to provide
protection into at least January 2031, excluding any potential
Patent Term Extension (PTE).
“Despite short-term headwinds as a result of the
adoption of GLP-1 prescription therapy as a presurgical treatment
option, we remain confident that this trend is expanding the
medical weight loss market by promoting open discussions between
physicians and the vast majority of those suffering from obesity,
who have traditionally avoided surgery,” stated Paul F. Hickey,
President and Chief Executive Officer of ReShape Lifesciences®.
“The popularity of GLP-1’s has brought significant benefits to
those suffering from type 2 diabetes and their use for weight loss
has helped to normalize the stigma that often occurs around obesity
and medical intervention. Excitingly, there is growing discussion
regarding the application of GLP-1 therapy for patients who have
plateaued with their weight loss following bariatric surgery,
including Lap-Band® surgery patients. That said, as a standalone
therapy, there is growing evidence that weight loss due to these
pharmacological therapies levels off and can often lead to notable
non-compliance due to their currently known side effects. From a
continuum of care perspective, these patients are likely candidates
for bariatric surgery as the next viable treatment.
Mr. Hickey continued, “During the second
quarter, we took significant, tangible steps to further invest in
our growth drivers by optimizing operational efficiencies and
streamlining and enhancing our lead generation programs. As a
direct result, we recognized a 53% reduction in operating expenses
compared to last year’s second quarter and expect to see continued
financial benefits throughout the rest of this year and into 2024.
We are fully committed to attaining profitability by executing on
our three growth pillars and are focused on being a disciplined and
metrics driven organization, driving revenue by developing and
expanding our pipeline, and validating our evidenced based products
across the weight loss care continuum.
“To that end, in June, we submitted a PMA
supplement application to the FDA for our next generation,
Lap-Band® 2.0, developed with physician feedback to improve the
patient experience using an enhanced band reservoir technology that
serves as a relief valve and is designed to allow for increased
Lap-Band® constriction and resultant satiety, without increasing
discomfort due to swallowing large pieces of food that may require
in-office band adjustments. We expect FDA feedback by year end or
early 2024, at the latest. If approved, we believe that, based on
discussions with physicians, there should be broad adoption by
existing and new Lap-Band® surgeons.
“Also key is our recently signed agreement with
Hive, which is expected to significantly improve our patient
engagement strategy. Importantly, data generated during our testing
of the Hive AI SMS platform in the first quarter, at select
Lap-Band® accounts where we also have co-op marketing, revealed a
more than 107% increase in medical consultations scheduled over the
prior quarter. In conjunction with our highly targeted,
direct-to-consumer marketing campaign, the Hive platform allows
individuals to quickly and easily navigate new patient intake
hurdles and book an appointment with a medical professional at any
time. Taken together, we believe this strategy will better address
patient leads, with the intent of increasing conversions and,
ultimately, more Lap-Band® surgeries.”
Mr. Hickey concluded, “We believe our
personalized, HIPAA-compliant, weight management program,
ReShapeCare™, with resources including personalized health
coaching, could be a meaningful adjunct for GLP-1 patients, helping
them to make the necessary lifestyle changes to attain long-term
weight loss. As the limitations of the use of GLP-1s become more
evident, we are confident that our minimally invasive, adjustable
Lap-Band® system, which remains broadly reimbursed, will continue
to gain further acceptance as a long-term and safe weight loss
solution. Going forward, we remain committed to continuing our
collaborations with healthcare professionals to expand awareness
and use of personalized treatments, including both our proprietary
Lap-Band® and ReShapeCare™ programs, to ensure that patients can
achieve durable long-term weight loss goals.”
Second Quarter and Six months Ended June
30, 2023, Financial and Operating Results
Revenue totaled $2.3 million
for the three months ended June 30, 2023, which represents a
contraction of $0.6 million compared to the same period in 2022.
The primary reason is due to a decrease in sales throughout the
U.S. and Europe. During the three months ended June 30, 2023, the
company focused on its new strategies for marketing through a
targeted digital media campaign near bariatric surgical centers,
while reducing costs and increasing efficiencies. The company
expects that, during the second half of 2023, these efforts will
come to fruition and revenue will grow through the remainder of
2023, as the company continues to focus on increasing the demand
for the Lap-Band®.
Revenue totaled $4.5 million for the six months
ended June 30, 2023, which represents a contraction of $0.8 million
compared to the same period in 2022. The primary reason is due to a
decrease in sales throughout the U.S. and Europe. During the six
months ended June 30, 2023, the company focused on its new
strategies for marketing through a targeted digital media campaign
near bariatric surgical centers, while reducing costs and
increasing efficiencies. The company expects that, during the
second half of 2023, these efforts will come to fruition and
revenue will grow through the remainder of the year, as the company
continues to focus on increasing the demand for the Lap-Band®.
Gross Profit for the three
months ended June 30, 2023 was $1.2 million, compared to $1.9
million for the same period in 2022, a decrease of $0.7 million.
Gross profit as a percentage of total revenue for the three months
ended June 30, 2023 was 53.0%, compared to 65.1% for the same
period in 2022. The decrease in gross profit percentage is due to
the decrease in sales volume without a reduction in overhead
costs.
Gross profit for the six months ended June 30,
2023 was $2.4 million, compared to $3.1 million for the same period
in 2022, a decrease of $0.7 million. Gross profit as a percentage
of total revenue for the six months ended June 30, 2023 was 53.2%,
compared to 58.2% for the same period in 2022. The decrease in
gross profit percentage is due to the decrease in sales volume
without a reduction in overhead costs.
Sales and Marketing Expenses for the three
months ended June 30, 2023, decreased by $2.5 million, or 53.0% to
$2.2 million, compared to $4.6 million for the same period in 2022.
The decrease is primarily due to a decrease of $1.6 million in
advertising and marketing expenses, due to the move to a targeted
digital marketing campaign. There were also reductions in payroll
expenditures, including commissions, stock-based compensation,
travel and consulting related services all totaling $0.9
million.
Sales and marketing expenses for the six months
ended June 30, 2023, decreased by $5.0 million, or 53.3%, to $4.3
million, compared to $9.3 million for the same period in 2022. The
decline is primarily due to a decrease of $4.0 million in
advertising and marketing expenses, as the company has reevaluated
its marketing approach and has moved to a targeted digital
marketing campaign, resulting in a significant reduction of costs.
The company also had reductions in payroll expenditures, including
commissions, travel and stock-based compensation of $0.9 million,
due to changes in sales personnel and lower sales.
General and Administrative
Expenses for the three months ended June 30, 2023,
decreased by $2.9 million, or 54.4%, to approximately $2.5 million,
compared to $5.4 million for the same period in 2022. The decrease
is primarily due to a reduction in legal related expenses of $1.9
million, due to the company recording $2.0 million in litigation
losses during the three months ended June 30, 2022. In addition,
the company had a reduction in stock-based compensation expense of
$0.4 million and a reduction in payroll-related expenditures of
$0.4 million, due to changes within personnel. The company had a
decrease in intangible asset amortization, as it impaired the
finite intangible assets during the fourth quarter of 2022. The
company also had a decrease in rent and insurance of $0.2 million
due to its lease of the Carlsbad, CA location expiring.
General and administrative expenses for the six
months ended June 30, 2023, decreased by $2.6 million, or 28.0%, to
approximately $6.7 million, compared to $9.3 million for the same
period in 2022. The decrease is primarily due to a reduction in
legal related expenses of $1.7 million, due to the company
recording $2.0 million in litigation losses during the three months
ended June 30, 2022. In addition, the company had a reduction in
stock-based compensation expense of $0.8 million and a reduction in
payroll related expenditures of $0.6 million, due to changes within
personnel. The company had a decrease in intangible asset
amortization of $0.9 million, as it impaired the finite intangible
assets during the fourth quarter. The company also had a decrease
in rent and insurance of $0.4 million due to the lease of its
Carlsbad, CA location expiring. This was offset by an increase in
audit and professional services of approximately $1.9 million,
primarily due to the offerings the company completed in February
2023 and April 2023.
Research and Development
Expenses for the three months ended June 30, 2023,
decreased by $0.2 million, or 22.2%, to $0.6 million, compared to
approximately $0.8 million for the same period in 2022. The decline
is primarily due to a decrease of $0.1 million in payroll expenses
and a reduction of $0.1 million in consulting and clinical related
expenses.
Research and development expenses for the six
months ended June 30, 2023, decreased by $0.5 million, or 30.8%, to
$1.0 million, compared to $1.5 million for the same period in 2022.
The decline is primarily due to a decrease of $0.2 million in
payroll expenses and a reduction of $0.1 million in consulting and
clinical related expenses. The company also had minor decreases in
both stock-based compensation expense and depreciation expense.
Non-GAAP adjusted EBITDA loss
was $3.7 million for the three months ended June 30, 2023, compared
to a loss of $7.8 million for the same period last year.
Non-GAAP adjusted EBIDTA loss was $9.1 million
for the six months ended June 30, 2023, compared to a loss of $15.0
million for the same period last year.
Cash and Cash Equivalents as of
June 30, 2023, were $4.7 million and the company remains debt free
on its balance sheet.
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,
Christine Ren-Fielding, M.D., Professor of Surgery at NYU Grossman
School of Medicine, Director of the NYU Langone Weight Management
Program and Chief of the Division of Bariatric Surgery.
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. ReShapeCare™ is a
virtual weight-management program that supports lifestyle changes
for all weight loss patients led by board-certified health coaches
to help them keep the weight off over time. The recently launched
ReShape Marketplace™ is an online collection of quality wellness
products curated for all consumers to help them achieve their
health goals. 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 expected path to profitability, 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)
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
2023 |
|
|
2022 |
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
4,567 |
|
|
$ |
3,855 |
|
Restricted cash |
|
|
100 |
|
|
|
100 |
|
Accounts and other receivables |
|
|
1,975 |
|
|
|
2,180 |
|
Inventory |
|
|
3,268 |
|
|
|
3,611 |
|
Prepaid expenses and other current assets |
|
|
634 |
|
|
|
165 |
|
Total current assets |
|
|
10,544 |
|
|
|
9,911 |
|
Property and equipment,
net |
|
|
659 |
|
|
|
698 |
|
Operating lease right-of-use
assets |
|
|
297 |
|
|
|
171 |
|
Deferred tax asset, net |
|
|
57 |
|
|
|
56 |
|
Other intangible assets,
net |
|
|
238 |
|
|
|
260 |
|
Other assets |
|
|
57 |
|
|
|
46 |
|
Total assets |
|
$ |
11,852 |
|
|
$ |
11,142 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
1,601 |
|
|
$ |
1,926 |
|
Accrued and other liabilities |
|
|
2,527 |
|
|
|
5,040 |
|
Warranty liability, current |
|
|
167 |
|
|
|
344 |
|
Operating lease liabilities, current |
|
|
109 |
|
|
|
171 |
|
Total current liabilities |
|
|
4,404 |
|
|
|
7,481 |
|
Operating lease liabilities,
noncurrent |
|
|
198 |
|
|
|
— |
|
Warranty liability,
noncurrent |
|
|
— |
|
|
|
— |
|
Deferred tax liability,
net |
|
|
— |
|
|
|
— |
|
Common stock warrant
liability |
|
|
512 |
|
|
|
— |
|
Total liabilities |
|
|
5,114 |
|
|
|
7,481 |
|
Commitments and
contingencies |
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Preferred stock: |
|
|
|
|
|
|
Series C convertible preferred stock |
|
|
— |
|
|
|
— |
|
Common stock |
|
|
3 |
|
|
|
1 |
|
Additional paid-in capital |
|
|
637,172 |
|
|
|
627,935 |
|
Accumulated deficit |
|
|
(630,342 |
) |
|
|
(624,187 |
) |
Accumulated other comprehensive loss |
|
|
(95 |
) |
|
|
(88 |
) |
Total stockholders’ equity |
|
|
6,738 |
|
|
|
3,661 |
|
Total liabilities and stockholders’ equity |
|
$ |
11,852 |
|
|
$ |
11,142 |
|
RESHAPE LIFESCIENCES INC.
Consolidated Statements of Operations (dollars in
thousands; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
|
$ |
2,254 |
|
|
$ |
2,892 |
|
|
$ |
4,541 |
|
|
$ |
5,332 |
|
Cost of revenue |
|
|
1,060 |
|
|
|
1,009 |
|
|
|
2,123 |
|
|
|
2,231 |
|
Gross profit |
|
|
1,194 |
|
|
|
1,883 |
|
|
|
2,418 |
|
|
|
3,101 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
2,177 |
|
|
|
4,636 |
|
|
|
4,359 |
|
|
|
9,330 |
|
General and administrative |
|
|
2,445 |
|
|
|
5,363 |
|
|
|
6,667 |
|
|
|
9,254 |
|
Research and development |
|
|
581 |
|
|
|
747 |
|
|
|
1,033 |
|
|
|
1,492 |
|
(Gain) loss on disposal of assets, net |
|
|
(33 |
) |
|
|
381 |
|
|
|
(33 |
) |
|
|
381 |
|
Total operating expenses |
|
|
5,170 |
|
|
|
11,127 |
|
|
|
12,026 |
|
|
|
20,457 |
|
Operating loss |
|
|
(3,976 |
) |
|
|
(9,244 |
) |
|
|
(9,608 |
) |
|
|
(17,356 |
) |
Other expense
(income), net: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense (income), net |
|
|
(9 |
) |
|
|
(14 |
) |
|
|
(4 |
) |
|
|
(15 |
) |
Gain on changes in fair value of liability warrants |
|
|
(472 |
) |
|
|
— |
|
|
|
(3,438 |
) |
|
|
— |
|
(Gain) loss on foreign currency exchange, net |
|
|
— |
|
|
|
204 |
|
|
|
(21 |
) |
|
|
188 |
|
Other |
|
|
(6 |
) |
|
|
1 |
|
|
|
(8 |
) |
|
|
(9 |
) |
Loss before income tax
provision |
|
|
(3,489 |
) |
|
|
(9,435 |
) |
|
|
(6,137 |
) |
|
|
(17,520 |
) |
Income tax benefit |
|
|
4 |
|
|
|
9 |
|
|
|
18 |
|
|
|
39 |
|
Net loss |
|
$ |
(3,493 |
) |
|
$ |
(9,444 |
) |
|
$ |
(6,155 |
) |
|
$ |
(17,559 |
) |
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 six months ended June 30, 2023 and
2022 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
GAAP net loss |
$ |
(3,493 |
) |
|
$ |
(9,444 |
) |
|
$ |
(6,155 |
) |
|
$ |
(17,559 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Interest income, net |
|
(9 |
) |
|
|
(14 |
) |
|
|
(4 |
) |
|
|
(15 |
) |
Income tax benefit |
|
4 |
|
|
|
9 |
|
|
|
18 |
|
|
|
39 |
|
Depreciation and amortization |
|
49 |
|
|
|
545 |
|
|
|
97 |
|
|
|
1,095 |
|
Stock-based compensation expense |
|
217 |
|
|
|
770 |
|
|
|
440 |
|
|
|
1,489 |
|
(Gain) Loss on disposal of assets, net |
|
(33 |
) |
|
|
381 |
|
|
|
(33 |
) |
|
|
— |
|
Gain on changes in fair value of liability warrants |
|
(472 |
) |
|
|
— |
|
|
|
(3,438 |
) |
|
|
— |
|
Adjusted EBITDA |
$ |
(3,737 |
) |
|
$ |
(7,753 |
) |
|
$ |
(9,075 |
) |
|
$ |
(14,951 |
) |
ReShape Lifesciences (NASDAQ:RSLS)
Gráfico Histórico do Ativo
De Jun 2024 até Jul 2024
ReShape Lifesciences (NASDAQ:RSLS)
Gráfico Histórico do Ativo
De Jul 2023 até Jul 2024