Company Performance - Allurion Technologies, Inc. reported a quarterly loss of $7 per share, which was worse than the Zacks Consensus Estimate of a loss of $5, and an improvement from a loss of $15.75 per share a year ago, indicating a significant year-over-year reduction in losses [1] - The company posted revenues of $5.59 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.16%, and down from $8.24 million in the same quarter last year [2] - Over the last four quarters, Allurion has surpassed consensus EPS estimates only once, indicating challenges in meeting market expectations [2] Stock Performance - Allurion Technologies, Inc. shares have declined approximately 71.1% since the beginning of the year, contrasting sharply with the S&P 500's decline of only 1.8% [3] - The current consensus EPS estimate for the upcoming quarter is -$22.91 on revenues of $5.6 million, and for the current fiscal year, it is -$18.53 on revenues of $31.63 million [7] Industry Outlook - The Medical - Products industry, to which Allurion belongs, is currently ranked in the bottom 31% of over 250 Zacks industries, suggesting a challenging environment for companies in this sector [8] - The performance of Allurion's stock may be influenced by the overall outlook for the industry, as historical data shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Investor Presentation March 2025 Disclaimer This presentation, the information contained herein and the materials accompanying it (together, this "presentation") contains confidential, material and non-public information regarding Allurion Technologies, Inc. (the "Company" or "us") and is provided to the recipients ("you") of this presentation on the condition that you agree to hold it in strict confidence and not reproduce, disclose, forward or distribute it in whole or in part to others at any time withou ...

Revenue and Financial Performance - Revenue for the nine months ended September 30, 2024, was $26.519 million, compared to $45.232 million in the same period in 2023, reflecting a significant decrease[9] - Gross profit for the nine months ended September 30, 2024, was $18.970 million, compared to $35.067 million in the same period in 2023[9] - Total revenues for the three months ended September 30, 2024 were $5.367 million, a significant decrease from $18.2 million in the same period in 2023[75] - Revenue from Turkey dropped to $966,000 in Q3 2024 from $3.517 million in Q3 2023, representing a 72.5% decline[75] - All Other Countries contributed $3.347 million (62.4% of total revenue) in Q3 2024, down from $11.122 million (61.1% of total) in Q3 2023[75] - For the nine months ended September 30, 2024, total revenues were $26.519 million compared to $45.232 million in the same period in 2023, a 41.4% decrease[78] - No revenue was generated in the United States for both the three and nine months ended September 30, 2024[78] - The Company recognized a reduction to revenues of $1.2 million due to customer returns of the Allurion Balloon following its suspension in France[190] Net Loss and Profitability - Net loss for the nine months ended September 30, 2024, was $5.580 million, compared to a net loss of $61.427 million in the same period in 2023, showing a substantial improvement[9] - Net loss per share for the nine months ended September 30, 2024, was $2.62, compared to $50.01 in the same period in 2023[9] - Net loss for the nine months ended September 30, 2024 was $5.58 million, compared to a net loss of $61.43 million for the same period in 2023[17] - The company incurred losses from operations of $33.1 million and $53.3 million for the nine months ended September 30, 2024 and 2023, respectively[37] - Basic and diluted net loss per share for Q3 2024 was $(3.51), compared to $(13.56) in Q3 2023, showing a significant improvement[168] - Net loss attributable to common shareholders for Q3 2024 was $(9.004 million), compared to $(21.885 million) in Q3 2023[168] Cash Flow and Liquidity - Cash and cash equivalents decreased to $28.654 million as of September 30, 2024, from $38.037 million as of December 31, 2023[6] - Net cash used in operating activities for the nine months ended September 30, 2024 was $29.03 million, compared to $43.11 million for the same period in 2023[17] - Net cash provided by financing activities for the nine months ended September 30, 2024 was $20.26 million, compared to $116.39 million for the same period in 2023[17] - Cash and cash equivalents and restricted cash at the end of September 30, 2024 was $29.05 million, compared to $80.10 million at the end of September 30, 2023[17] - Cash outflows from operating activities were $29.0 million and $43.1 million for the nine months ended September 30, 2024 and 2023, respectively[37] - The company repaid $48 million for the Fortress Term Loan on April 16, 2024, including $43.1 million principal repayment and $4.6 million in fees[96] - The company recorded an $8.7 million loss on extinguishment of debt related to the Fortress Term Loan repayment in the nine months ended September 30, 2024[96] Assets and Liabilities - Accounts receivable decreased to $9.935 million as of September 30, 2024, from $18.194 million as of December 31, 2023[6] - Inventory decreased to $4.568 million as of September 30, 2024, from $6.171 million as of December 31, 2023[6] - Total current assets decreased to $44.829 million as of September 30, 2024, from $64.816 million as of December 31, 2023[6] - Total liabilities decreased to $114.510 million as of September 30, 2024, from $142.199 million as of December 31, 2023[6] - Inventory decreased to $4.568 million as of September 30, 2024 from $6.171 million at December 31, 2023, with finished goods inventory down 19.8%[79] - Property and equipment net value decreased to $3.08 million as of September 30, 2024 from $3.381 million at December 31, 2023[81] - Total accrued expenses and other current liabilities decreased to $7.973 million as of September 30, 2024 from $15.495 million at December 31, 2023[82] - Long-lived assets in the United States decreased from $5,381 thousand in 2023 to $4,690 thousand in 2024, while in France, they decreased from $1,010 thousand to $673 thousand[194] Stock and Equity Transactions - The company issued 2,260,159 shares of preferred stock in connection with a private placement, net of issuance costs, raising $979,000[15] - The company issued 653,351 shares of common stock in connection with a public offering, net of issuance costs, raising $5.07 million[15] - The company's total stockholders' deficit decreased from $70.49 million as of January 1, 2024 to $64.79 million as of September 30, 2024[15] - The company's accumulated deficit increased from $212.80 million as of January 1, 2024 to $218.38 million as of September 30, 2024[15] - The company's other comprehensive income increased from a loss of $700,000 as of January 1, 2024 to a gain of $2.89 million as of September 30, 2024[15] - The company completed a 1-for-25 reverse stock split effective January 3, 2025[31][32] - Following the reverse stock split, each public warrant is exercisable for 0.056818 shares of common stock at an exercise price of $202.50 per share[33] - Legacy Allurion common stock holders received Allurion Common Stock at an exchange ratio of approximately 0.9780[52] - The total number of Allurion Common Stock shares outstanding after the Business Combination and Reverse Stock Split was 1,892,058[56] - PIPE Investors purchased 215,468 shares of Allurion Common Stock at $176.00 per share, totaling $37.9 million[58] - Legacy Allurion convertible notes totaling $21.8 million were converted into 132,049 shares of Allurion Common Stock[72] - The company assumed 528,277 public warrants to purchase 750,394 shares of Allurion Common Stock at $202.50 per share, valued at $13.8 million[73] - Earn-Out liabilities for potential issuance of additional shares were initially valued at $53.0 million[74] - The company issued 2,260,159 shares of Series A Preferred Stock and 90,407 Private Placement Warrants, raising net proceeds of $2.5 million after deducting $0.2 million in offering costs[147] - The company issued 576,261 shares of Common Stock and 662,701 Public Offering Warrants, raising net proceeds of $15.2 million after deducting $1.0 million in underwriting discounts and $1.0 million in offering costs[156] - As of September 30, 2024, the company had 2,574,783 shares of Common Stock outstanding, up from 1,907,529 shares as of December 31, 2023[155] - The company has 769,257 warrants outstanding to purchase Common Stock, with a weighted average exercise price of $30.00[162] - The company entered into a Chardan Equity Facility, allowing it to sell up to $100 million in Common Stock, with 5,730 shares sold for $0.4 million as of September 30, 2024[166][167] - The company has 528,269 outstanding Public Warrants exercisable for 750,383 shares of Common Stock, with no redemptions as of September 30, 2024[165] - The company has reserved 2,294,777 shares of Common Stock for potential conversion or exercise of its securities as of September 30, 2024[159] Debt and Financing - The company borrowed $60.0 million under the Fortress Term Loan, used to repay the 2021 Term Loan[63] - Interest expense for the three months ended September 30, 2023 related to the Fortress Term Loan was $1.7 million, with an average interest rate of 14.94%[97] - Interest expense for the nine months ended September 30, 2024 related to the Fortress Term Loan was $2.3 million, with no interest expense for the three months ended September 30, 2024 due to loan extinguishment[98] - The 2021 Convertible Notes were converted into 5,345 shares of Allurion Common Stock with a corresponding recognition of APIC of $2.2 million on August 1, 2023[101] - The 2022 Convertible Notes were converted into 3,329 shares of Allurion Common Stock with a corresponding recognition of APIC of $1.2 million on August 1, 2023[104] - The 2023 Convertible Notes were issued for gross proceeds of $28.7 million with a stated interest rate of 7.0% per annum[105] - Interest expense for the nine months ended September 30, 2023 related to the 2023 Convertible Notes was $0.5 million[107] - The RTW Convertible Notes were issued for $48.0 million with an annual interest rate of 6% and a maturity date of April 16, 2031[115] - The fair value of the RTW Convertible Notes at issuance was $49.1 million, with a corresponding $1.1 million loss recognized in Other income, net[116] - RTW paid Allurion an aggregate of $40.0 million Investment Amount, with revenue interest payments up to 6.0% of annual net sales prior to December 31, 2026, and up to 10.0% thereafter until December 31, 2030[120] - If RTW has not received at least 100% of the Investment Amount by December 31, 2027, the company must make a cash payment to catch up to 100%, and if not 240% by December 31, 2030, a payment to reach 240%, with a Hard Cap of 260%[121] - The company has made $3.6 million in royalty payments to RTW as of September 30, 2024[122] - The RIFA Amendment increased the rate of revenue interest payments to 12% for net sales ≤ $100 million prior to December 31, 2026, and after January 1, 2027[123] - The fair value of the Revenue Interest Financing and PIPE Conversion Option were $38.5 million and $9.9 million, respectively, as of September 30, 2024[126] - For the three months ended September 30, 2024, the company recorded a $6.7 million loss and a $5.8 million gain on the Revenue Interest Financing[127] - The fair value of RTW Convertible Notes was $36.09 million as of September 30, 2024, classified under Level 3[128] Stock-Based Compensation and Employee Benefits - Stock-based compensation expense for the nine months ended September 30, 2024 was $2.22 million, compared to $6.35 million for the same period in 2023[17] - Total stock-based compensation expense for Q3 2024 was $860,000, compared to $5.539 million in Q3 2023[172] - As of September 30, 2024, 284,332 stock options were outstanding with a weighted average exercise price of $57.00 per option[173] - The company has $5.6 million of unrecognized compensation costs related to unvested stock options, expected to be recognized over 3.0 years[173] - Total stock compensation expense related to RSUs for Q3 2024 was $0.2 million, with $1.0 million of unrecognized compensation costs remaining[178] - The company's 2023 ESPP reserves 89,045 shares of Common Stock for issuance, with no shares issued as of September 30, 2024[180] - The company's 401(k) retirement plan matching contributions were less than $0.1 million for both Q3 2024 and Q3 2023[181] Leases and Real Estate - The company has 51,000 square feet of leased office, manufacturing, and laboratory space across six leases, expiring between March 2025 and March 2028[184] - Operating lease costs for Q3 2024 were $259,000, compared to $285,000 in Q3 2023[186] - Future commitments under non-cancelable operating lease agreements total $2,810 thousand, with a present value adjustment of $354 thousand, resulting in total lease liabilities of $2,456 thousand[187] - The weighted-average remaining lease term decreased from 3.7 years in 2023 to 2.9 years in 2024, while the weighted-average discount rate remained at 9.9%[187] Fair Value Measurements - The fair value of Public Warrants was $531,000 as of September 30, 2024, based on a Level 1 input[128] - The fair value of Legacy Allurion Common Stock Warrant Liabilities was $71,000 as of September 30, 2024, classified under Level 3[128] - The fair value of the PIPE Conversion Option was $9.85 million as of September 30, 2024, classified under Level 3[128] - The fair value of Preferred Stock Warrants decreased from $2,679 thousand to $715 thousand from June 30, 2023, to September 30, 2023, a decline of 73.3%[132] - The fair value of Common Stock Warrants decreased from $1,351 thousand to $207 thousand from June 30, 2023, to September 30, 2023, a decline of 84.7%[132] - The fair value of Public Offering Warrants was $5,970 thousand as of September 30, 2024, following a fair value issuance of $13,157 thousand and a change in fair value of $(7,187) thousand[132] - The fair value of Private Placement Warrants was $810 thousand as of September 30, 2024, following a fair value issuance of $1,670 thousand and a change in fair value of $(860) thousand[132] - The fair value of the Revenue Interest Financing was remeasured as of September 30, 2024, using a discount rate of 23.5%[136] - The fair value of the PIPE Conversion Option was measured using a stock price of $15.25 and an expected volatility of 130.0% as of September 30, 2024[137] - The fair value of the Earn-Out Liability was measured using a stock price of $15.25 and an expected volatility of 105.0% as of September 30, 2024[138] - The fair value of the RTW Convertible Notes was remeasured as of September 30, 2024, using a stock price of $15.25 and an expected volatility of 90.0%[142] Taxes - The company recorded income tax expense of $0.1 million for the three months ended September 30, 2024, representing an effective tax rate of (0.8%)[144] - The company maintained a full valuation allowance against its net deferred tax assets as of September 30, 2024, due to significant operating losses[145] Customer Concentration - Customer A accounted for 18% and 19% of total revenue for the three months ended September 30, 2024 and 2023, respectively[46] - Customer A accounted for 15% and 16% of accounts receivable as of September 30, 2024 and December 31, 2023, respectively[46] - Customer B accounted for 11% of total revenue for the three months ended September 30, 2023[46] Going Concern and Future Outlook - The company has concluded there is substantial doubt about its ability to continue as a going concern for one year from the date of the financial statements[38] - The company expects to continue generating significant operating losses for the foreseeable future[37] - As of September 30, 2024, the company had an accumulated deficit of $218.4 million[37] Other Transactions and Agreements - The company incurred $22.7 million in transaction costs, including $15.2 million recorded to additional paid-in capital and $5.0 million as general and administrative expenses[54] - Net proceeds from the Business Combination were $61.652 million after deducting transaction costs and other liabilities[56] - RTW paid $40.0 million for revenue interest payments, with rates up to 6.0% of annual net sales before December 31, 2026, and up to 10.0% thereafter[59] - The Company recorded gains of $1.8 million and $3.1 million for the three months ended September 30, 2024 through the condensed consolidated statements of operations and other comprehensive income (loss), respectively[117] - The Company is in compliance with the financial maintenance covenants in the Amended Note Purchase Agreement as of September 30, 2024[118] - The Company entered into a consulting agreement with KKG Enterprises and Remus Group Management, paying $0.2 million and $0.3 million respectively, which were terminated in June 2023[196] - Allurion sold $13 million of 2023 Convertible Notes to Hunter Ventures Limited, a related party

Core Viewpoint - Allurion Technologies, Inc. (ALUR) has shown a significant price increase of 58.1% over the past four weeks, with a mean price target of $28.67 indicating a potential upside of 374.7% from the current price of $6.04 [1] Price Targets and Analyst Estimates - The mean estimate includes three short-term price targets with a standard deviation of $18.58, where the lowest estimate of $16 suggests a 164.9% increase, and the highest estimate predicts a surge of 727.8% to $50 [2] - A low standard deviation among price targets indicates strong agreement among analysts regarding the stock's price movement, which can serve as a starting point for further research [7] Earnings Estimates and Analyst Optimism - Analysts have shown growing optimism regarding ALUR's earnings prospects, as evidenced by a 17.1% increase in the Zacks Consensus Estimate for the current year, with three estimates moving higher and no negative revisions [10] - ALUR holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, suggesting a strong potential upside in the near term [11] Caution on Price Targets - While price targets are often sought after by investors, they can mislead more than guide, as empirical research indicates that they rarely reflect actual stock price movements [5] - Analysts may set overly optimistic price targets due to business incentives, which can inflate expectations [6] - Investors should approach price targets with skepticism and not rely solely on them for investment decisions [8]

Core Viewpoint - Allurion Technologies is experiencing a rise in share price following the announcement of a planned clinical study to evaluate the combination of its Allurion Program with GLP-1 agonists [1] Group 1: Clinical Study and Weight Loss - The company is addressing concerns regarding muscle loss associated with GLP-1 treatments, which can lead to a reduction of approximately 40% in lean mass relative to total weight lost [2] - Allurion's previous studies indicate that its gastric balloon, along with the Virtual Care Suite, has enabled patients to lose weight while maintaining or even increasing muscle mass [2] - The planned study aims to confirm if the combination of the Allurion Balloon and Virtual Care Suite with GLP-1 therapy can provide a more metabolically healthy approach to weight loss, potentially positioning the Allurion Program as a leading option in obesity treatment [3] Group 2: Financial Developments - The company has entered into a securities purchase agreement to raise approximately $7.4 million in gross proceeds through the sale of 1.24 million shares at $6.00 per share [4] - Roth Capital Partners is acting as the exclusive placement agent for this offering, which is expected to close on or around January 27, 2025, pending customary closing conditions [5] - The net proceeds from the offering are intended for working capital and general corporate purposes [5] Group 3: Market Reaction - Allurion shares increased by 120% to $8.15 at the time of publication, reflecting positive market sentiment following the announcements [5]

Core Insights - Allurion Technologies (ALUR) shares tripled as the company aims to leverage the growing obesity drug market by testing its gastric balloon in combination with GLP-1 medications [1][4] - Previous research indicated that GLP-1 treatments resulted in approximately 40% reduction in lean mass as a proportion of total weight lost, while Allurion's gastric balloon users maintained or even increased muscle mass [2][4] - The CEO highlighted the significance of muscle mass decline in GLP-1 users and suggested that the combination of the gastric balloon and GLP-1 could set a new standard in obesity care [3] Company Developments - Allurion Technologies announced plans to conduct a study to evaluate the effectiveness of its gastric balloon alongside popular GLP-1 drugs [1][4] - The company has faced a challenging year, with shares down over 85% from their peak in summer 2023, despite the recent surge [3][4] Market Context - The obesity drug market is experiencing significant growth, prompting Allurion to explore innovative solutions to enhance weight loss outcomes while preserving muscle mass [1][3]

Financial Performance - Allurion generated revenue of $26.5 million for the nine months ended September 30, 2024, a decrease of 41.5% compared to $45.2 million for the same period in 2023[149] - The company incurred a net loss of $5.6 million for the nine months ended September 30, 2024, significantly reduced from a net loss of $61.4 million for the same period in 2023[149] - Revenue decreased by $12.8 million, or 71%, to $5.4 million for the three months ended September 30, 2024, and decreased by $18.7 million, or 41%, to $26.5 million for the nine months ended September 30, 2024, compared to the same periods in 2023[171] - The net loss for the three months ended September 30, 2024, was $9.0 million, compared to a net loss of $21.6 million for the same period in 2023, reflecting a decrease of $12.6 million[170] - The loss from operations was $12.3 million for the three months ended September 30, 2024, compared to a loss of $26.2 million for the same period in 2023, indicating an improvement of $13.8 million[170] - The company incurred a net loss of $61.4 million for the nine months ended September 30, 2023, compared to a net loss of $5.6 million for the same period in 2024[182] Cash Flow and Financing - Cash outflows from operating activities were $29.0 million for the nine months ended September 30, 2024, down from $43.1 million in the same period in 2023[182] - Cash provided by financing activities was $20.3 million for the nine months ended September 30, 2024, compared to $116.4 million in the same period of 2023[195][197] - The company received $15.2 million in net proceeds from the issuance of common stock and warrants on July 1, 2024[185] - The Company issued $48 million in convertible senior secured notes with a 6.0% annual interest rate, maturing on April 16, 2031[152] - The company received $40.0 million upfront from the Revenue Interest Financing Agreement with RTW, obligating it to remit certain revenue interest payments until December 31, 2030[203] Expenses and Cost Management - Cost of revenue decreased by $2.0 million, or 47%, to $2.3 million for the three months ended September 30, 2024, and decreased by $2.6 million, or 26%, to $7.5 million for the nine months ended September 30, 2024, compared to the same periods in 2023[172] - Gross profit decreased by $10.9 million, or 78%, to $3.1 million for the three months ended September 30, 2024, and decreased by $16.1 million, or 46%, to $19.0 million for the nine months ended September 30, 2024, compared to the same periods in 2023[173] - Sales and marketing expenses decreased by $8.8 million, or 63%, to $5.2 million for the three months ended September 30, 2024, and decreased by $18.1 million, or 50%, to $18.0 million for the nine months ended September 30, 2024, compared to the same periods in 2023[174] - Research and development expenses decreased by $4.0 million, or 55%, to $3.2 million for the three months ended September 30, 2024, and decreased by $8.4 million, or 39%, to $13.2 million for the nine months ended September 30, 2024, compared to the same periods in 2023[174] - General and administrative expenses decreased by $11.9 million, or 63%, to $7.0 million for the three months ended September 30, 2024, and decreased by $9.9 million, or 32%, to $20.7 million for the nine months ended September 30, 2024, compared to the same periods in 2023[175] Regulatory and Compliance Issues - The French regulatory authority suspended sales of the Allurion Balloon, prompting the Company to implement a remediation plan[159] - The Company was notified by NYSE that its common stock's average closing price was below $1.00, triggering compliance measures[160] - The Company must obtain stockholder approval for the conversion of notes into common stock, with a proposal due by December 31, 2025[152] Product and Market Development - Allurion completed the enrollment of 550 patients in the AUDACITY clinical trial across 17 sites in the United States, with the last patient treated in September 2024[149] - The Allurion Program includes the world's first swallowable intragastric balloon, which is designed to assist in weight loss without surgery or anesthesia[145] - The Allurion Virtual Care Suite (VCS) provides AI-powered remote patient monitoring tools and a behavior change program, enhancing patient engagement and support[147] - The Allurion VCS was launched in the United States in April 2024 for patients utilizing various weight loss treatments, including anti-obesity medications and bariatric surgery[148] - Allurion's products are currently sold in multiple regions, including Europe, the Middle East, Africa, Latin America, Canada, and the Asia-Pacific region[149] Future Outlook and Strategic Plans - The company expects to continue incurring net losses as it focuses on regulatory approvals, sales strategies, and research and development efforts[150] - The company anticipates needing additional funding for operational expenses, including selling, marketing, and research and development[150] - The company expects to continue generating significant operating losses for the foreseeable future and may need to raise additional capital[184] Stock and Shareholder Information - Allurion's stock began trading on the New York Stock Exchange under the ticker symbol "ALUR" following the completion of its Business Combination on August 2, 2023[151] - The Company raised $15.2 million in net proceeds from a public offering of 14,406,508 shares at an offering price of $1.20 per share[157] - The Company terminated and repaid all outstanding obligations under the Fortress Credit Agreement[155] Risk Factors - The company is exposed to foreign currency risks, particularly in Europe, the Middle East, and the Asia-Pacific region, with a potential 10% adverse change in exchange rates impacting revenues by approximately 6% and net income by about 2%[209] - The company has not engaged in any foreign currency hedging activities to date but will reassess its approach as international operations grow[209] - 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[209] Accounting and Reporting - The company is classified as an emerging growth company under the JOBS Act, allowing it to delay adopting new accounting standards[208] - The company is also a smaller reporting company, which provides certain exemptions from disclosure requirements, potentially complicating financial comparisons with other public companies[208] - The company may choose to early adopt new accounting standards when permitted for private companies[208] - The fair value of the Revenue Interest Financing Agreement is calculated using a discounted cash flow method based on future revenue projections[203] - The estimated fair value of Legacy Allurion shares was determined by the board of directors, considering various factors including market conditions and financial performance[205]

Financial Data and Key Metrics Changes - Third quarter revenue was $5.4 million, a significant decrease from $18.2 million in the same period of 2023, primarily due to destocking, macroeconomic headwinds, and a product recall in France [35][36] - Gross profit for the third quarter was 58%, down from 77% year-over-year, impacted by the product recall and lower production volumes [36] - Loss from operations decreased to $12.3 million from $26.2 million in the same period last year, driven by reduced operating costs despite lower gross profit [41] Business Line Data and Key Metrics Changes - The AI product revenues grew more than 80% year-over-year, with expectations to double revenues by year-end, driven by expansion in the U.S. and Europe [15][16] - Procedure volumes in the Middle East grew by 20% compared to last year, indicating strength in that region despite challenges in other markets [11] Market Data and Key Metrics Changes - The company noted a recovery in parts of Latin America, which appears to be improving from a macroeconomic standpoint [11] - Approximately 33% of patients now have previously tried an anti-obesity medication, up from 25% last year, indicating a growing market for the Allurion Program [71] Company Strategy and Development Direction - The company announced a new strategy built around five pillars, including a new commercial plan focused on deeper penetration in select markets and scaling the AI product platform [17][18] - The company aims to achieve profitability for the ex-U.S. business by the end of 2025 and resume commercialization in France [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about resuming commercialization in France and highlighted the potential for the Allurion Balloon as a second-line treatment after GLP-1 discontinuation [30][56] - The management acknowledged macro headwinds but emphasized that the execution of their new plan is within their control [18] Other Important Information - The company has reduced its global headcount by approximately half and consolidated functions under centralized leadership to streamline operations and reduce costs [28] - The last patient exited the AUDACITY trial, with data readout expected at the end of the year, which is crucial for the FDA approval process [29] Q&A Session Summary Question: Can you provide details on the PMA filing and interactions with the FDA? - The first three modules of the PMA have been filed and are under review by the FDA, with positive feedback received so far [48] Question: What is the revenue generation model for the Virtual Care Suite? - The Virtual Care Suite generates revenue on a per patient, per month basis, with both basic and premium versions available for providers [52] Question: Will there be any revenue from the U.S. in 2025? - Some revenue is expected from the Virtual Care Suite in the U.S., but timing for the Allurion Balloon FDA approval remains uncertain [59] Question: Can you quantify the impact from France and destocking in the quarter? - France accounted for over $1 million in revenue, with an additional $1.2 million reduction due to product recall adjustments [66] Question: What is the expected gross margin for Q4 and 2025? - Gross margin is expected to be in the low to mid-60s for Q4, with potential to reach mid-70s by the end of 2025 [60] Question: How are the cost reductions being implemented? - Cost reductions are across all departments, with a focus on maintaining sales effectiveness while reducing marketing expenses [62] Question: What regions showed stronger revenue performance? - The Middle East showed recovery in the balloon business, while Latin America experienced favorable growth due to improved macroeconomic conditions [70]

Revenue Performance - Revenue for Q3 2024 was $5.4 million, down from $18.2 million in Q3 2023, reflecting a year-over-year decrease of approximately 70% due to destocking and sales suspension in France[4]. - Revenue for the three months ended September 30, 2024, was $5,367,000, a decrease of 70.5% compared to $18,200,000 for the same period in 2023[18]. - The company updated its full-year 2024 revenue guidance to between $30 million and $35 million[3]. Profitability and Loss - Gross profit margin for Q3 2024 was 58%, a decrease from 77% in Q3 2023, impacted by product recalls and lower production volumes[5]. - Loss from operations for Q3 2024 was $12.3 million, a decrease of $13.8 million compared to a loss of $26.2 million in Q3 2023[8]. - Net loss attributable to common shareholders for the three months ended September 30, 2024, was $(9,004,000), compared to $(21,885,000) for the same period in 2023[18]. - The company reported a loss from operations of $(12,341,000) for the three months ended September 30, 2024, compared to $(26,154,000) for the same period in 2023[18]. Expenses and Cost Management - Sales and marketing expenses decreased by approximately $8.8 million to $5.2 million in Q3 2024, compared to $14.0 million in Q3 2023, due to increased operational efficiency[6]. - Total operating expenses for the three months ended September 30, 2024, were $15,452,000, a reduction of 61.5% from $40,122,000 in the prior year[18]. - Research and development expenses for the three months ended September 30, 2024, were $3,212,000, a decrease of 55.4% from $7,191,000 in the same period of 2023[18]. - The 2024 Restructuring Plan aims to reduce operating expenses by approximately 50% and achieve profitability by the end of 2025[3]. Cash and Assets - Cash balance as of September 30, 2024, was $28.7 million[9]. - Cash and cash equivalents decreased to $28,654,000 as of September 30, 2024, from $38,037,000 at the end of 2023[19]. - Total assets decreased to $50,699,000 as of September 30, 2024, down from $71,712,000 at the end of 2023[19]. - Total liabilities decreased to $114,510,000 as of September 30, 2024, compared to $142,199,000 at the end of 2023[19]. Clinical Trials and Product Development - AI product revenue from the Virtual Care Suite (VCS) grew by 82% year-over-year, driven by the onboarding of patients treated with GLP-1s in the U.S.[2]. - The last patient in the AUDACITY FDA clinical trial successfully exited, with top-line readout expected by the end of 2024[2]. Shareholder Information - Weighted-average shares outstanding increased to 64,086,265 for the three months ended September 30, 2024, from 40,335,457 in the same period of 2023[18].

Company Overview - Allurion Technologies, Inc. (ALUR) has submitted the first three modules of its premarket approval application (PMA) to the FDA for the Allurion Balloon, utilizing the FDA's modular submission program to enhance application efficiency. The final module, containing clinical data from the AUDACITY trial, is expected to be filed early next year [1] - The Allurion Gastric Balloon is the first swallowable, procedureless gastric balloon designed for weight loss, which can be placed without surgery, endoscopy, or anesthesia, taking approximately 15 minutes during an outpatient visit [2][3] Product Details - The Allurion Balloon helps control appetite by filling space in the stomach and is designed to empty naturally after approximately four months through a time-activated release valve. It is made from polyurethane, ensuring comfort and a snug fit [3] - The AUDACITY trial, a pivotal controlled study involving 550 patients across 17 sites in the U.S., completed enrollment in fall 2023 and is expected to conclude by the end of 2024 [3] Clinical Data and Efficacy - In a study of 121 individuals treated with two consecutive, four-month courses of Allurion balloon therapy, participants lost an average of 22.1% of their body weight after one year, outperforming traditional endoscopic intragastric balloon therapy, which resulted in weight losses of 15.4% and 16.2% [4] - The Allurion Balloon has shown a lower intolerance rate compared to 12-month endoscopic balloons, with a significantly lower overall serious adverse event rate [4][5] Market Potential - The global weight management market was valued at $142.6 billion in 2022 and is projected to grow at a rate of 9.9% from 2023 to 2030, driven by increasing bariatric surgeries, online weight loss program adoption, and rising obesity rates [6] - Allurion's gastric balloon technology is positioned to capitalize on this market growth, potentially boosting the company's business and revenue [6]