Allurion Technologies(US:ALUR)2024-11-13 21:30Financial 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]