This presentation contains financial forecasts with respect to the Company's projected financial results for the Company for the periods indicated. These projections should not be relied upon as being necessarily indicative of future results. The assumptions and estimates underlying the prospective financial information are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from ...

Allurion Technologies (ALUR) 2025 Conference June 04, 2025 03:45 PM ET Speaker0 Alright. We can, we can make a start here. I'm Michael Toomey covering for for Matt Taylor, US med tech analyst at Jefferies. Pleased to be joined by Shantanu Gore, founder and CEO of Allurion. So thank you for joining us today. So maybe we can just level set to start for people not as familiar with the story. Obviously, you founded the company and just run us through maybe a history of Allurion and where we are today. Speaker1 ...

Industry Overview - The Zacks Medical - Products industry is facing increased uncertainty due to the reimposition of tariffs on medical devices, particularly a rise from 10% to 30% on Chinese-made components, which may disrupt U.S. MedTech economics [1] - Companies in the industry are primarily focused on research and development, catering to vital therapeutic areas such as cardiovascular, nephrology, and urology devices, with increasing procedure volumes driving sales [4] - Supply-chain disruptions, inflationary pressures, and labor shortages are straining gross and operating margins, with these challenges expected to persist into 2025 [5] Major Trends - The adoption of AI, medical mechatronics, and robotics is transforming the industry, with innovations in minimally invasive surgeries and automated patient management [6] - 3D printing is reshaping the landscape by producing various medical products, highlighting a shift towards precision and improved clinical outcomes [7] - The COVID-19 pandemic has led to a significant rise in demand for diagnostic testing kits, with many rapid, point-of-care devices entering development [8] - Emerging markets are showing strong demand for medical products due to factors like aging populations and government investment in healthcare infrastructure [9] Industry Performance - The industry has outperformed its own sector, rising 10% over the past year, while the Zacks Medical sector declined by 15.6% [13] - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 20.3X, compared to the S&P 500's 19.9X and the sector's 19.4X [16] Company Highlights - **Insulet (PODD)**: Focused on diabetes management with the Omnipod Insulin Management System, experiencing an 18.1% revenue growth forecast for 2025 and a 32.1% growth in earnings [25] - **MacroGenics (MGNX)**: Reported a revenue increase to $150 million in 2024 from $58.7 million in 2023, driven by collaboration revenues and milestone payments [29] - **Cellectar Biosciences (CLRB)**: Developing cancer detection and treatment agents, with a lead asset showing a 98.2% clinical benefit rate in trials [36] - **Allurion Technologies (ALUR)**: Focused on obesity treatment with a weight loss platform, but faced a 32% revenue decline year-over-year in Q4 2024 due to operational challenges [42]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________ to _________________ Commission File Number: 001-41767 Allurion Technologies, Inc. (Exact Name of Registrant as Specified in its Charter) | De ...

Core Viewpoint - Allurion Technologies, Inc. reported a quarterly earnings of $0.43 per share, significantly beating the Zacks Consensus Estimate of a loss of $1.53 per share, marking an earnings surprise of 128.10% [1] Financial Performance - The company posted revenues of $5.58 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 2.11%, and a decline from $9.39 million in the same quarter last year [2] - Over the last four quarters, Allurion has surpassed consensus EPS estimates two times but has not beaten consensus revenue estimates [2] Stock Performance - Allurion shares have declined approximately 78.1% since the beginning of the year, contrasting with the S&P 500's gain of 0.1% [3] - The current consensus EPS estimate for the upcoming quarter is -$1.15 on revenues of $6.05 million, and for the current fiscal year, it is -$4.19 on revenues of $28.6 million [7] Industry Outlook - The Medical - Products industry, to which Allurion belongs, is currently ranked in the bottom 31% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Allurion's stock performance [5]

Financial Data and Key Metrics Changes - First quarter revenue was $5,600,000, a decrease from $9,400,000 in the same period of 2024, primarily due to the temporary suspension of sales in France and lower investments in sales and marketing [21][22] - Adjusted net operating loss narrowed by 48% to $5,900,000 compared to the prior year, with gross margin expanding to 75% from 73% in the prior year and 45% in the previous quarter [5][21] - Cash and cash equivalents at the end of the first quarter were $20,400,000, providing a runway to achieve FDA approval and profitability [23][11] Business Line Data and Key Metrics Changes - Sales and marketing expenses decreased to $3,600,000 from $6,100,000 in the same period in 2024, driven by increased operating efficiency [22] - Research and development expenses were reduced to $2,600,000 from $5,700,000, primarily due to reduced costs related to the IDISSIPPI trial [22] - General and administrative expenses decreased to $5,200,000 from $6,400,000, with adjusted expenses at $3,800,000 excluding one-time financing costs [23] Market Data and Key Metrics Changes - The company observed over 40% growth quarter over quarter and year over year in its B2B2C model pilot in clinics in Europe [7] - The company expects revenues to ramp as the year progresses with the expansion of the B2B2C model and enhanced sales team onboarding [8] Company Strategy and Development Direction - The company’s 2025 plan focuses on five pillars: a new commercial plan, gaining FDA approval for the Allurion balloon, achieving profitability for the ex-U.S. business, scaling the AI product platform, and resuming commercialization in France [6][7] - The company aims to combine the Allurion program with low doses of GLP-1s to create a new standard of care for obesity management [16][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the efficiency of the new B2B2C model and the potential for significant shareholder value as the strategy is executed [25] - The company is optimistic about completing the PMA submission to the FDA by June and is encouraged by the FDA's feedback during the pre-PMA meeting [10][11] Other Important Information - The company is making progress in treating patients in France and has reengaged clinics and retrained providers [14] - The company does not expect any impact on gross margin from tariffs for the balance of the year [12] Q&A Session Summary Question: Trends in regional markets with the new marketing strategy - Management noted that mature markets for GLP-1s are creating tailwinds, and the expansion of the direct sales force is expected to accelerate new account openings [27][28] Question: Timeline and patient enrollment for the GLP-1 trial - Enrollment is expected to begin in the latter half of this year, with a one-year follow-up for at least 75 subjects across multiple sites in Europe [30][31] Question: Design of the trial arms - The trial will focus on validating previous retrospective work with a single arm prospective trial design, using historical data as comparators [32] Question: Future gross margin expectations - Management expects margins to remain in the same range as the first quarter for the remainder of the year, with potential increases as revenues ramp up [34][35] Question: Details on the pre-PMA meeting and next steps - The FDA was receptive to alternative analyses for the control group data, which could strengthen the overall application [39][41] Question: Procedure growth and trends in Q2 - Procedure volume is stable, with some growth in certain territories, and a recovery is expected in France in the second half of the year [57][58]

Financial Data and Key Metrics Changes - First quarter revenue was $5.6 million, a decrease from $9.4 million in the same period in 2024, primarily due to the temporary suspension of sales in France and lower investments in sales and marketing [22][5] - Adjusted net operating loss narrowed by 48% to $5.9 million compared to the prior year, with gross margin expanding to 75% from 73% in the prior year and 45% in the previous quarter [5][22] - Cash and cash equivalents at the end of the first quarter were $20.4 million, providing a runway for achieving FDA approval and profitability [25][12] Business Line Data and Key Metrics Changes - Sales and marketing expenses decreased to $3.6 million from $6.1 million in the same period in 2024, driven by increased operating efficiency [23] - Research and development expenses were reduced to $2.6 million from $5.7 million, primarily due to cost reductions related to the IDISSIPPI trial [23] - General and administrative expenses decreased to $5.2 million from $6.4 million, with adjusted expenses at $3.8 million excluding one-time financing costs [24] Market Data and Key Metrics Changes - The company observed over 40% growth quarter over quarter and year over year in its B2B2C model pilot in clinics in Europe [7] - The company expects revenues to ramp as the year progresses with the expansion of the B2B2C model and enhanced sales team onboarding [8] Company Strategy and Development Direction - The company’s 2025 plan focuses on five pillars: a new commercial plan, gaining FDA approval for the Allurion balloon, achieving profitability for the ex-U.S. business, scaling the AI product platform, and resuming commercialization in France [6][7] - The company aims to combine its program with low doses of GLP-1s to create a new standard of care for obesity, targeting a sustained weight reduction of over 20% while maintaining muscle mass [16][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the efficiency of the new B2B2C model and the potential for significant shareholder value as millions of patients could be treated with the Elerion program [26][27] - The company is optimistic about completing its PMA submission to the FDA by June and is encouraged by the FDA's feedback during the pre-PMA meeting [12][39] Other Important Information - The company has resumed treating patients in France and is in the final phases of updating marketing collateral to reactivate placements [15] - The company does not expect any impact on gross margin from tariffs for the remainder of the year, as most components are manufactured in the U.S. [12][13] Q&A Session Summary Question: Trends in regional markets, especially with the new marketing strategy - Management noted that mature markets for GLP-1s are creating tailwinds, with patients seeking alternatives and the expansion of the direct sales force expected to drive revenue growth [29][30] Question: Timeline and patient enrollment for the GLP-1 trial - Enrollment is expected to begin in the latter half of this year, with a one-year follow-up and a target of at least 75 subjects across multiple sites in Europe [31][32] Question: Design of the trial arms - The trial will focus on validating previous retrospective work with a single arm prospective trial design, leveraging historical data for comparison [33][34] Question: Future gross margin expectations - Management expects margins to remain in the same range as the first quarter, with potential increases as revenues ramp up [35][36] Question: Details on the pre-PMA meeting and next steps - The FDA was receptive to alternative analyses for the control group data, which could strengthen the overall application [39][40] Question: Current adoption of the Elerion program and GLP-1s - There is organic adoption of the combination therapy in the field, with physicians integrating GLP-1s with the Allurion balloon [45][46] Question: Revenue performance cadence for 2025 - Management anticipates steady revenue increases driven by the onboarding of new sales team members and recovery in France [49][50] Question: Expected costs for the prospective study - The prospective trial is not expected to have a material impact on the budget, as existing patient flow and lower costs overseas will be leveraged [51][52] Question: Regulatory strategy regarding expanded labeling - The focus is on the commercial implications of the study, with potential long-term benefits for discussions with regulators and payers [53][54] Question: Procedure growth trends - Procedure volume is stable, with some growth in certain territories, and management expects a recovery in France in the second half of the year [57][58]

[Allurion Q1 2025 Financial Results and Business Update](index=1&type=section&id=Allurion%20Reports%20First%20Quarter%202025%20Financial%20Results%20and%20Provides%20Business%20Update) [Recent Company Highlights and Outlook](index=1&type=section&id=Recent%20Company%20Highlights%20and%20Outlook) The company highlights improved operational efficiency, progress on its FDA submission, and a strategic focus on combining its program with GLP-1 medications - The company is focusing on improving efficiency to achieve profitability, highlighted by reduced expenses, expanded gross margins, and a smaller operating loss[3](index=3&type=chunk) - Allurion is on track to complete its PMA submission to the FDA by the end of June after a successful pre-PMA meeting discussing the AUDACITY trial's topline results[3](index=3&type=chunk)[7](index=7&type=chunk) - A key strategy is positioning the Allurion Program as complementary to GLP-1 medications, aiming to address their shortcomings by **maintaining muscle mass** and **increasing adherence**[4](index=4&type=chunk)[7](index=7&type=chunk) - The company maintains its 2025 revenue guidance of approximately **$30 million**, with a projected **50% reduction in operating expenses** compared to 2024[7](index=7&type=chunk) [First Quarter Financial Results](index=1&type=section&id=First%20Quarter%20Financial%20Results) The company reports lower Q1 revenue but improved operational efficiency with higher gross margins, reduced expenses, and a smaller net operating loss Q1 2025 Key Financial Metrics (vs. Q1 2024) | Financial Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $5.6 million | $9.4 million | -40.5% | | Gross Profit | $4.2 million | $6.9 million | -39.1% | | Gross Margin | 75% | 73% | +2 p.p. | | Total Operating Expenses | $11.4 million | $18.3 million | -37.7% | | Net Operating Loss | $7.3 million | $11.4 million | -36.0% | - Operating expenses saw significant year-over-year reductions across all categories due to restructuring initiatives: Sales and Marketing decreased to **$3.6M** from $6.1M, R&D to **$2.6M** from $5.7M, and G&A to **$5.2M** from $6.4M[8](index=8&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk) - Adjusted operating expenses for Q1 2025 were **$10.1 million**, a **45% decrease** from the prior year, and the adjusted net operating loss was **$5.9 million**, a **48% reduction**[7](index=7&type=chunk)[11](index=11&type=chunk) - The company's cash balance was **$20.4 million** as of March 31, 2025[12](index=12&type=chunk) [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a Q1 operating loss of $7.3 million but achieved a net income of $7.4 million due to significant non-operating income Condensed Consolidated Statements of Operations (unaudited, in thousands, except per share amounts) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | **2025** | **2024** | | **Revenue** | **$5,580** | **$9,386** | | Cost of revenue | 1,419 | 2,520 | | **Gross profit** | **4,161** | **6,866** | | Total operating expenses | 11,443 | 18,256 | | **Loss from operations** | **(7,282)** | **(11,390)** | | Total other income (expense) | 14,756 | 17,052 | | Income before income taxes | 7,474 | 5,662 | | **Net income** | **$7,379** | **$5,586** | | **Net income per share (Basic)** | **$1.54** | **$2.92** | | **Net income per share (Diluted)** | **$0.20** | **$2.78** | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows total assets of $38.4 million, total liabilities of $108.2 million, and an increased cash position of $20.4 million Condensed Consolidated Balance Sheets (unaudited, in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $20,408 | $15,379 | | Total current assets | $33,166 | $27,156 | | **Total assets** | **$38,414** | **$32,813** | | **Liabilities and Stockholders' Deficit** | | | | Total current liabilities | $15,897 | $18,863 | | **Total liabilities** | **$108,204** | **$110,791** | | **Total stockholders' deficit** | **($69,790)** | **($77,978)** | | **Total liabilities and stockholders' deficit** | **$38,414** | **$32,813** | [Non-GAAP Financial Measures and Reconciliations](index=3&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP measures show an adjusted operating loss of $5.9 million and a 45% decrease in adjusted operating expenses year-over-year - Non-GAAP measures are used to exclude one-time items, allowing management and investors to better compare the underlying financial performance of the business period-over-period[17](index=17&type=chunk) Non-GAAP Net Operating Loss Reconciliation (Q1 2025, in thousands) | | GAAP Results | Adjustments | Adjusted Results | | :--- | :--- | :--- | :--- | | Loss from operations | $(7,282) | $(1,390) | $(5,892) | Change in Operating Expenses and Net Operating Loss (Adjusted, Q1 2025 vs Q1 2024) | Metric | As Reported Change | Adjusted Change | | :--- | :--- | :--- | | Change in Operating Expenses | (37)% | (45)% | | Change in Net Operating Loss | (36)% | (48)% | [Company and Investor Information](index=2&type=section&id=Company%20and%20Investor%20Information) [About Allurion](index=2&type=section&id=About%20Allurion) The company provides a weight loss platform centered on the first swallowable, procedure-less gastric balloon and a supporting Virtual Care Suite - Allurion's core product is a weight loss platform featuring the Allurion Gastric Balloon, the first and only swallowable, procedure-less intragastric balloon for weight loss[14](index=14&type=chunk) - The platform includes the Allurion Virtual Care Suite with a mobile app for consumers and the Allurion Insights with Coach Iris AI for healthcare providers, which can be used with or without the balloon[14](index=14&type=chunk) [Conference Call and Webcast Details](index=2&type=section&id=Conference%20Call%20and%20Webcast%20Details) Management will host a conference call and webcast on May 14, 2025, to discuss the financial results and provide a business update - A conference call is scheduled for **May 14, 2025, at 8:30 AM ET** to discuss financial results[13](index=13&type=chunk)

Industry Overview - The Zacks Medical - Products industry is facing rising uncertainty due to the reinstatement of tariffs on medical devices, with rates ranging from 10% to 145% on Chinese-made parts, which could disrupt U.S. MedTech economics [1] - U.S. PPE manufacturers are expected to benefit from these tariffs, potentially reducing competition from heavily subsidized Chinese products, although some suppliers may shift assembly to Mexico and Canada instead of fully onshoring production [2] - U.S. hospitals are likely to see budget increases due to improving demand and lower interest rates, which may boost medical product sales despite ongoing challenges such as declining demand for COVID-19-related products and weak performance in the Chinese market [3] Key Trends - The industry is witnessing significant advancements in AI, medical mechatronics, and robotics, with a growing adoption of minimally invasive robot-assisted surgeries and IT in patient care [7] - 3D printing technology is transforming the medical devices industry, enabling the production of complex biological structures such as stem cells and prosthetic organs [8] - The COVID-19 pandemic has led to increased global demand for diagnostic testing kits, shifting the IVD product pipeline towards rapid, point-of-care devices [9] Emerging Markets - Emerging economies are showing solid demand for medical products due to rising medical awareness, economic prosperity, and an aging population, making these markets attractive for global medical device players [10][11] Industry Performance - The Zacks Medical Products industry has collectively risen by 6.3% over the past year, outperforming the Zacks Medical sector, which declined by 10%, but underperforming the S&P 500, which increased by 8% [14] - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 20.3X, slightly above the S&P 500's 19.9X and the sector's 19.4X [16] Company Highlights - Insulet (PODD) is focused on diabetes management with its Omnipod Insulin Management System and is expanding its global presence, with a projected revenue growth of 18.1% for 2025 [19][22] - MacroGenics (MGNX) reported a significant revenue increase to $150 million in 2024, driven by collaborations and product sales, while also advancing its oncology pipeline [26][27] - Cellectar Biosciences (CLRB) is developing targeted cancer therapies with strong clinical data supporting its lead asset, although it faces challenges such as a delay in NDA submission [31][33] - Allurion Technologies (ALUR) is dedicated to obesity management with its innovative weight loss platform, but it has faced revenue declines and operational challenges [35][37]

Stock Performance and Market Conditions - The company's share price has experienced significant volatility, ranging from $7.00 to $92.50 from January 1, 2024, to December 31, 2024, with daily trading volumes fluctuating between approximately 156 and 2,539,556 shares[416]. - As of August 29, 2024, the company's average market capitalization was less than $50 million, resulting in non-compliance with the NYSE's Minimum Market Capitalization Standard[443]. - The company received a notice on August 12, 2024, indicating that its common stock had closed below the minimum average closing bid price of $1.00 for 30 consecutive business days[444]. - A reverse stock split of 1-for-25 was executed on January 3, 2025, to raise the trading price of the common stock to meet the Minimum Bid Price Standard, which was regained on February 3, 2025[445]. - The company is subject to quarterly monitoring by the NYSE for compliance with its business plan to regain compliance with listing standards[443]. Financial Strategy and Capital Raising - The company intends to retain future earnings to finance business development and does not plan to pay cash dividends in the foreseeable future[417]. - The company has entered into a Purchase Agreement with Chardan Capital Markets for a committed equity facility of up to $100.0 million, with $1.0 million raised from the sale of 75,618 shares as of March 21, 2025[420]. - The company plans to raise up to $100 million through the ChEF Purchase Agreement with Chardan, subject to terms and conditions[454]. - In April 2024, the company issued and sold $48 million of Notes, with a potential conversion to 19,168 shares of common stock, representing 1% of the outstanding shares as of April 14, 2024[459]. - In July 2024, the company completed a private placement of 2,260,159 shares of Series A Preferred Stock, convertible to 90,407 shares of common stock, at a purchase price of $30.00 per share[460]. - In January 2025, the company sold 841,751 shares of common stock for approximately $2.5 million, at a price of $2.97 per share[461]. - In February 2025, the company issued 900,000 shares of common stock at an offering price of $5.23 per share, along with accompanying warrants[462]. - The company has the right to control the timing and amount of future sales of shares to Chardan, which may lead to substantial dilution for existing shareholders[457]. Compliance and Regulatory Challenges - The company is subject to increased legal, accounting, and financial compliance costs as a public entity, which may strain resources and divert management's attention[423]. - The company anticipates that ongoing changes in laws and regulations will increase compliance costs and complexity, potentially impacting business operations[424]. - The company is classified as an "emerging growth company" and a "smaller reporting company," allowing it to take advantage of certain exemptions from disclosure requirements, potentially affecting comparability with other public companies[430][432]. - The company may face substantial costs and management diversion due to potential securities class action litigation following periods of stock price volatility[433]. - The company is required to seek stockholder approval for the issuance of shares underlying certain warrants, which will be immediately exercisable upon receipt of such approval[465]. Internal Controls and Financial Reporting - The company identified material weaknesses in its internal control over financial reporting, including insufficient segregation of duties and lack of experienced staff, which may lead to misstatements in financial statements[435]. - If the company fails to maintain effective internal controls, it risks losing investor confidence, which could negatively impact its stock price[438]. - The company is currently working to remediate identified material weaknesses and has upgraded its enterprise resource planning system to SAP in August 2022[436]. Shareholder and Governance Issues - The company has established nomination rights for certain parties regarding its board of directors, which may lead to conflicts of interest[427]. - The company’s stockholders must provide advance notice to nominate individuals for election to the board, which may deter potential acquirers[456]. - The provisions in the company's Bylaws may discourage lawsuits against directors and officers, potentially increasing costs for stockholders[475]. - The exclusive forum provisions in the Bylaws may limit stockholders' ability to bring claims in preferred jurisdictions, which could lead to additional costs[475]. - The enforceability of the choice of forum provisions in the Bylaws has been challenged in legal proceedings, posing a risk to the company's operations and financial condition[475]. Currency and Interest Rate Risks - The company is exposed to foreign currency risks, particularly in Europe, the Middle East, and the Asia-Pacific region, which could significantly impact financial results[604]. - A 10% adverse change in foreign exchange rates could have impacted revenues by approximately 6% and expenses by 3%, affecting net loss by 2% for the year ended December 31, 2024[605]. - For the year ended December 31, 2023, a similar 10% adverse change in foreign exchange rates would have impacted revenues by approximately 5% and expenses by 2%, with a net loss impact of less than 1%[605]. - The company has not engaged in any foreign currency hedging activities to date but will reassess its approach as international operations grow[605]. - A hypothetical 10% change in interest rates would not have a material impact on the value of the company's cash, cash equivalents, net loss, or cash flows[601]. - The company had no variable rate debt outstanding as of December 31, 2024[602]. Financial Position - As of December 31, 2024, the company had cash and cash equivalents totaling $15.4 million, primarily invested in money market funds[601].