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Allurion Technologies(ALUR) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Fourth quarter revenue was 5.6million,downfrom5.6 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 32.1million,inlinewithpreannouncementguidance[17]GrossprofitforQ42024was32.1 million, in line with pre-announcement guidance [17] - Gross profit for Q4 2024 was 2.5 million, or 45% of revenue, compared to 6.4million,or786.4 million, or 78% of revenue in Q4 2023 [29] - Operating expenses in Q4 decreased by 39% year-over-year, driven by restructuring and increased operational efficiency [18][31] - Loss from operations for Q4 was 17.1 million, down from 25.7millioninthesameperiodin2023[32]BusinessLineDataandKeyMetricsChangesProcedurevolumesgrewby425.7 million in the same period in 2023 [32] 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 discontinuing GLP-1 medications [18] - Sales and marketing expenses for Q4 2024 were 7.9 million, down from 10.7millioninQ42023,including10.7 million in Q4 2023, including 3.1 million of restructuring costs [30] - Research and development expenses for Q4 2024 were 4.1million,downfrom4.1 million, down from 6.1 million in Q4 2023 [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][73] Company Strategy and Development Direction - The company plans to focus on a new commercial strategy emphasizing B2B2C sales models and deeper penetration in key geographies [19] - Aiming for FDA approval for the Allurion Balloon and preparing for a U.S. launch [19] - The company intends to achieve profitability for its ex-U.S. business by the end of 2025 [19] - Plans to scale its AI product platform and resume commercialization in France [19][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential of the combination therapy of the Allurion Balloon with low-dose GLP-1s to redefine obesity care [16][35] - The company anticipates a revenue of approximately 30millionin2025,withasteadybuildquarteroverquarterdrivenbynewcommercialstrategiesandanexpandedsalesteam[24][82]Managementexpectsoperatingexpensestodeclinebyapproximately5030 million in 2025, with a steady build quarter-over-quarter driven by new commercial strategies and an expanded sales team [24][82] - Management expects operating expenses to decline by approximately 50% in 2025 compared to 2024 due to restructuring [24] Other Important Information - The company raised additional capital in Q1 2025, providing a cash runway into 2026 [26] - The French regulatory authority, ANSM, has cleared the company to resume sales in France, which is expected to contribute significantly in 2026 [26] Q&A Session Summary Question: Follow-up on results using balloons with low-dose GLP-1 - Management explained that the positive results were due to the lower dose of GLP-1 protecting lean body mass while achieving weight loss through synergistic mechanisms [40][41] Question: Key assumptions for 2025 guidance of 30 million - Management highlighted that the guidance is based on maintaining procedure volumes and re-engaging with clinics in France, expecting a gradual contribution from that market [44][46] Question: Progress on U.S. approval timeline - The next milestone is the completion of the PMA submission, anticipated in the first half of the year, with ongoing dialogue with the FDA [48][49] Question: Trends in procedure volume growth - Management confirmed that momentum continues in markets where GLP-1s are mature, with significant growth observed in pilot accounts [54][55] Question: B2B2C rollout status - The B2B2C strategy has been piloted in key markets and will continue to roll out as validation is obtained [68][69] Question: Metrics on regions with traction - Management noted promising results in the Middle East and Latin America, where GLP-1s have been widely used [71][73] Question: Operating expense reductions - The changes in operating expenses were implemented at the end of 2024, with no further reductions expected throughout 2025 [75]