Core Insights - Eli Lilly's experimental drug Bimagrumab, when combined with Novo Nordisk's GLP-1 weight loss drug Wegovy, shows superior weight loss results while preserving muscle mass [1][2] - The combination therapy resulted in a 22.1% weight reduction over 48 weeks, with 92.8% of the weight loss coming from body fat, compared to a 15.7% reduction and 71.8% fat loss with Wegovy alone [1] - Morgan Stanley expresses optimism about the combination therapy's efficacy and safety, noting improvements in various cardiovascular metabolic indicators [2] Company Analysis - Morgan Stanley highlights that the combination therapy's safety and tolerability are better than expected, with mild muscle cramps occurring in about 60% of patients, and transient increases in ALT and lipase levels [2] - Eli Lilly is conducting a Phase II trial for Bimagrumab combined with Tirzepatide for obesity and/or type 2 diabetes, with data expected in April and October 2026 [2][3] - The stock rating for Eli Lilly is "Overweight" with a 12-month target price of $1,133, representing a 46% upside from the closing price of $778.08 on June 24 [3] Industry Insights - The combination therapy may be particularly beneficial for older patients on GLP-1 medications, who are more prone to muscle loss [3] - The concept of "sarcopenic obesity" is identified as a significant indication for the combination therapy, with interest in its application for metabolic-associated fatty liver disease (MASH) and osteoarthritis [3] - Potential upside risks for Eli Lilly's stock include better-than-expected performance of oral GLP-1 drug Orforglipron and positive results from Tirzepatide studies [4]

Financial Data and Key Metrics Changes - Fourth quarter revenue was $5.6 million, down from $8.2 million in the same period in 2023, primarily due to the temporary suspension of sales in France and macroeconomic headwinds [28] - Full year revenue for 2024 was $32.1 million, in line with pre-announcement expectations [17] - Gross profit for Q4 2024 was $2.5 million, or 45% of revenue, compared to $6.4 million, or 78% of revenue in Q4 2023 [29] - Operating expenses in Q4 decreased by 39% year-over-year, driven by restructuring and reorganization efforts [18] Business Line Data and Key Metrics Changes - Procedure volumes grew by 4% in 2024, higher than previously issued guidance, attributed to patients entering the funnel after trying and stopping GLP-1 medications [18] - Sales and marketing expenses for Q4 2024 were $7.9 million, down from $10.7 million in Q4 2023, including $3.1 million of restructuring costs [30] - Research and development expenses for Q4 2024 were $4.1 million, down from $6.1 million in Q4 2023, also including restructuring costs [31] Market Data and Key Metrics Changes - The U.S. market represents a significant opportunity due to high obesity rates and widespread use of GLP-1s, with over 40% of adults in the U.S. classified as obese [24] - The company expects to see the highest procedural volume increases in regions where GLP-1s are most mature, indicating a trend of patients returning for alternative treatments after discontinuing GLP-1s [46] Company Strategy and Development Direction - The company’s strategy for 2025 is built around five pillars, including a new commercial plan focused on key geographies, 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 [19] - The company plans to launch additional prospective studies to confirm initial findings on the combination of the Allurion Balloon with low-dose GLP-1s, aiming to define a new paradigm in obesity care [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum building in Q1 2025, with procedure volumes on track to increase by over 30% compared to Q4 2024 [22] - The company anticipates operating expenses to decline by approximately 50% in 2025 compared to 2024, while still investing in key growth areas [24] - Management highlighted the importance of the clinical data generated on the combination therapy, which could redefine obesity management standards [35] Other Important Information - The company raised additional capital through financings, providing a cash runway into 2026 and through expected FDA approval [26] - The company resumed sales in France after regulatory review, which is expected to contribute to future revenue growth [26] Q&A Session Summary Question: Follow-up on results using balloons with low-dose GLP-1 - Management explained that the positive results were driven by using lower doses of GLP-1, which protects lean body mass while still achieving weight loss through synergistic mechanisms [41][42] Question: Key assumptions for 2025 guidance of $30 million - Management indicated confidence in preserving procedure volumes and highlighted the importance of regions where GLP-1s are mature for future growth [44][46] Question: Progress on U.S. approval timeline - The next milestone is completing the PMA submission in the first half of the year, with updates to follow [49] Question: Trends in procedure volume growth - Management confirmed that momentum is continuing in markets where GLP-1s are mature, with significant growth observed in pilot accounts [55] Question: Cadence of revenue to reach $30 million - Management expects a steady build of revenue quarter-over-quarter, driven by the new commercial plan and an increase in the sales team [80][82] Question: Timing for meaningful contribution from France - Management does not expect a material contribution from France until late 2025 or early 2026 due to the time required to reengage with accounts [85] Question: Gross margin recovery expectations - Management anticipates a quicker recovery in gross margin than revenue build, starting in Q1 2025 [87] Question: Impact of launching the smaller balloon on margin - Management does not expect significant impact on gross margin from the next-gen balloon in 2025, but potential for expansion in 2026 [90]

Financial Data and Key Metrics Changes - For the year ended December 31, 2024, the company reported revenue of $349.1 million, representing a slight decline of 2.8% compared to the previous year [18] - The gross profit margin increased by 1% year-over-year, reaching 62.1% [18] - Net profit for the period decreased by 12.6% compared to 2023, primarily due to increased operating expenses [19] - Cash and cash equivalents at the end of the period were $17.1 million, maintaining a strong financial position [19] Business Line Data and Key Metrics Changes - The Medical Aesthetics Products segment remained the largest contributor, generating $308.9 million in 2024, accounting for 88.5% of total revenue [20] - Direct revenue increased to 87% compared to 78% in 2023, emphasizing the expansion of business outside North America [18] Market Data and Key Metrics Changes - Revenue from international markets, excluding North America, totaled $211.7 million, reflecting a 4.6% increase compared to 2023 [19] - The rapid expansion of direct operations has allowed the company to navigate economic challenges, particularly in North America and Latin America [14] Company Strategy and Development Direction - The company is focused on building a comprehensive wellness ecosystem through product diversification and market expansion [5] - Key strategic pillars include establishing a portfolio of energy-based devices (EBD), expanding injectables, and enhancing global presence [9][10] - The company plans to introduce new AI-based personalized skincare solutions and continue scaling its global presence [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about market conditions stabilizing, particularly with recent interest rate adjustments [15] - The company anticipates growth drivers from the commercialization of injectables and the launch of new products like ALMA Harmony and ALMA IQ [16] - Management emphasized the importance of brand equity and engagement, noting successful partnerships that have elevated brand recognition [15] Other Important Information - The company has successfully launched several new products, including ALMA Harmony and Soprano Titanium, which have seen strong market adoption [10][11] - The partnership with global icon Kate Hudson has significantly increased brand recognition, reaching over 300 million consumers worldwide [15] Q&A Session Summary Question: Why did revenue in North America decrease and what will be done in North America? - Management explained that high interest rates have made it difficult for doctors to get leasing approved, impacting revenue. However, recent interest rate decreases are expected to improve deal closures [24][26][27] Question: Expectations for sales of Daxify in 2025 and the structure of the injectable team in China? - Management indicated that preparations for Daxify in China are underway, with a senior clinical marketing team being established to support operations [30][32] Question: Explanation of profit margin stability and the impact of the JUSTAR investment? - Management clarified that the JUSTAR investment provided a one-time income of approximately $3.4 million, and profitability remains stable despite increased operating expenses [38][40] Question: Outlook for the global EBITDA market and growth expectations? - Management believes the aesthetic segment has strong growth potential, with injectables showing the most promise. EBD is expected to grow at 6-8% globally [43][44] Question: Headwinds in Europe and outlook for 2025? - Management noted geopolitical tensions affecting Europe and highlighted a new contract with an injectable company that will enhance their market position [48][50] Question: Revenue contribution from long-acting products and commercial plans? - Management stated that revenue from RIVENESS was minimal in 2024 as the team was only established late in the year, but they are building a team in Australia for future growth [54][56] Question: Revenue and earnings outlook for the next two to three years? - Management refrained from providing specific forecasts but emphasized the importance of technology and brand trust in driving future growth [62][66] Question: Market share movements in key markets like the U.S. and China? - Management indicated that the company is gaining market share in North America and remains a leader in China despite local competition [69][70]