Allurion Reports Fourth Quarter and Full Year 2023 Financial Results and Reiterates 2024 Guidance
- Allurion reported a Q4 revenue of $8.2 million and full-year 2023 revenue of $53.5 million, in line with preannouncement figures.
- Procedural volume increased by 30% over 2022, reflecting strong consumer demand for the Allurion Program.
- The company completed enrollment in the AUDACITY pivotal trial ahead of schedule, a crucial step for FDA approval.
- Research on healthcare professionals and patients showed a positive impact of GLP-1s and other anti-obesity medications on the awareness of the Allurion Program.
- Allurion treated the first UK NHS-reimbursed patients with the Allurion Balloon, marking a significant milestone.
- The company expects 2024 revenue of $60-65 million, with gross margins of 77-79% and a cash burn of approximately $30 million.
- Allurion implemented strategic cost reduction efforts to enhance operational flexibility and reduce cash burn.
- Despite macroeconomic challenges and competition from GLP-1 drugs, Allurion remains optimistic about market opportunities in weight management.
- Loss from Operations for Q4 increased due to lower revenue and increased operating expenses.
- Cash and cash equivalents totaled $38 million as of December 31, 2023, reflecting an increase of $30.4 million from the previous year.
- Total revenue for Q4 2023 decreased to $8.2 million from $19.2 million in the same period in 2022, attributed to macroeconomic headwinds in certain markets.
- Gross profit for Q4 decreased to 78% of revenue from 79% in the same period in 2022.
- General and administrative expenses increased significantly in Q4, driven by accounts receivable reserves and stock-based compensation expenses.
- Loss from Operations for Q4 increased by $15.6 million compared to the same period in 2022.
- The decrease in gross profit and increase in operating expenses contributed to the higher Loss from Operations in Q4.
Insights
The reported financials for Allurion Technologies indicate a significant revenue decline from $19.2 million in Q4 2022 to $8.2 million in Q4 2023, which could raise concerns among investors regarding the company's growth trajectory and market conditions. Despite a 30% increase in procedural volume, the decrease in revenue suggests that Allurion may be facing pricing pressure or increased competition, particularly in the face of rising attention to GLP-1 drugs. The strategic cost reduction effort, aiming to reduce cash burn to approximately $30 million in 2024, is a critical step for the company's financial health, but investors should closely monitor if these reductions impact the company's ability to invest in growth opportunities.
Additionally, the increase in cash and cash equivalents is a positive sign, providing the company with a buffer against short-term liquidity issues. However, the $7 million in accounts receivable reserves indicates potential concerns about the collectability of revenue, which could impact future cash flows. The 2024 guidance reiteration suggests management confidence, but the market will likely seek evidence of sustainable growth and operational efficiency improvements in subsequent quarters.
From a market demand perspective, the 30% increase in procedural volume for Allurion's obesity treatments is noteworthy, reflecting a strong consumer demand for weight management solutions. This aligns with global trends towards increased awareness and treatment of obesity. The company's research on healthcare professionals and patients, showing a positive impact of anti-obesity medications on the awareness of the Allurion Program, suggests that the company's marketing efforts are resonating with its target audience.
However, the macroeconomic headwinds that led to lower re-order rates from distributors and adjusted inventory levels by accounts could indicate a broader market challenge. The company's efforts to manage credit risk by reducing or pausing sales to certain accounts may be prudent but could also limit revenue growth potential. The strategic focus on operational flexibility and efficient marketing channels will be important for Allurion to capitalize on market opportunities and navigate competitive pressures.
The completion of enrollment in the AUDACITY pivotal trial ahead of schedule is a positive development for Allurion, as it brings the company closer to potential FDA approval for the Allurion Balloon. FDA approval could significantly expand the company's market presence in the United States. However, the costs associated with research and development, as well as the increased general and administrative expenses, are contributing to the company's operational losses. The reported loss from operations of $25.7 million for the fourth quarter, which is a substantial increase from the previous year, underscores the financial challenges associated with bringing new medical technologies to market.
The mention of the Allurion Virtual Care Suite SaaS product as part of the 2024 outlook suggests an expansion into digital health solutions, which could offer new revenue streams and align with industry trends towards integrated healthcare services. The expected gross margins of 77-79% for 2024 indicate confidence in maintaining pricing power, which will be essential for achieving profitability in the long term.
Fourth Quarter Highlights and Outlook
- Reiterating 2024 guidance on procedural volume, revenue, gross margin, and cash burn
-
Fourth quarter revenue of
$8.2 million $53.5 million -
Procedural volume, as estimated through new app users, increased by
30% over 2022, reflecting robust demand for the Allurion Program -
Completed enrollment in the AUDACITY pivotal trial ahead of schedule, a critical milestone for the premarket approval (PMA) application for the Allurion Balloon to the
U.S. Food and Drug Administration (FDA) - Conducted research on 172 healthcare professionals and 1,663 patients that demonstrated a positive impact of GLP-1s and other anti-obesity medications on the awareness of the Allurion Program
-
Treated the first patients with the Allurion Balloon who were fully reimbursed by the
UK NHS -
Implemented a strategic cost reduction effort expected to reduce cash burn to approximately
$30 million
"Despite our fourth quarter being impacted by macroeconomic conditions and the surge of attention paid to GLP-1 drugs, over the course of 2023, we saw strong procedural volume growth, which we believe demonstrates robust underlying consumer demand for the Allurion Program," said Shantanu Gaur, Chief Executive Officer. “As we begin 2024, this demand has continued to increase, and we have seen improvement in some of the macro conditions that negatively impacted the fourth quarter. To take advantage of this, we have also taken meaningful steps to reduce our expense structure and provide increased operational flexibility.
“As we look ahead, we are excited by the considerable attention the weight management space has received and the significant growth in overall market opportunity we believe this presents Allurion,” continued Gaur. “Whether used in combination with a GLP-1 drug or as an alternative, we believe, and our research indicates, the Allurion Program benefits from this heightened market attention and provides a more comprehensive solution for the more than one billion people suffering from obesity globally.”
Fourth Quarter 2023 Financial Results
Total revenue for the quarter ended December 31, 2023, was
Gross profit for the fourth quarter was
Sales and marketing expenses for the fourth quarter decreased
Research and development expenses increased by
General and administrative expenses increased by
Loss from Operations for the fourth quarter increased by
As of December 31, 2023, cash and cash equivalents totaled
2024 Financial Outlook
For full year 2024, Allurion reiterates the financial guidance it previously published:
-
Anticipated procedural volumes growth of
20% , reflecting increased penetration in key direct markets and reallocation of marketing spend to more efficient channels -
Revenue of
$60 $65 million -22% growth year-over-year -
Expected gross margins of 77
-79% , reflecting durable pricing of our gastric balloon as well as initial commercialization efforts for the Allurion Virtual Care Suite SaaS product -
Targeted cash burn of approximately
$30 million
Conference Call and Webcast Details
Allurion management will host a conference call at 8:30 a.m. ET today, March 21, 2024. To access the conference call by telephone, please dial (888) 330-3417 (domestic) or +1 646 960 0804 (international) and use Conference ID 1905455. To listen to the conference call via live audio webcast, please visit the Events section of Allurion’s Investor Relations website at Allurion - Events & Presentations.
A replay of the conference call will be available by telephone by dialing (800) 770 2030 (domestic) or +1 647 362 9199 (international) and using Access Code 1905455. The archived webcast will also be available on Allurion’s Investor Relations website mentioned above.
About Allurion
Allurion is dedicated to ending obesity. The Allurion Program is a weight-loss platform that combines the Allurion Gastric Balloon, the world’s first and only swallowable, procedure-less gastric balloon for weight loss, the Allurion Virtual Care Suite, including the Allurion Mobile App for consumers, Allurion Insights for healthcare providers featuring the Iris AI Platform, and the Allurion Connected Scale. The Allurion Virtual Care Suite is also available to providers separately from the Allurion Program to help customize, monitor, and manage weight-loss therapy for patients regardless of their treatment plan, whether it is gastric balloon, surgical, medical or nutritional. The Allurion Gastric Balloon is an investigational device in
For more information about Allurion and the Allurion Virtual Care Suite, please visit www.allurion.com.
Forward-Looking Statements
This press release contains forward-looking statements that are based on beliefs and assumptions and on information currently available. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although Allurion believes that it has a reasonable basis for each forward-looking statement contained in this press release, Allurion cautions you that these statements are based on a combination of facts and factors currently known by it and its projections of the future, about which it cannot be certain. Forward-looking statements in this press release include, but are not limited to, statements regarding: the financial outlook for 2024, including driving procedural volume growth, revenue growth, durable pricing, and the impact of cost reduction initiatives on cash burn and operational flexibility; Allurion’s ability to complete the AUDACITY trial and support a PMA submission; the impact of investments and initiatives on distribution of the Allurion Program, advancement of its artificial intelligence platform, and improvement of patient outcomes; and the market and demand for our products and weight-loss solutions, including GLP-1 drugs and elective procedures.
Allurion cannot assure you that the forward-looking statements in this press release will prove to be accurate. These forward looking statements are subject to a number of risks and uncertainties, including, among others, general economic, political and business conditions; the ability of Allurion to obtain regulatory approval for, and successfully commercialize, the Allurion Program; the timing of, and results from, its clinical studies and trials; the evolution of the markets in which Allurion competes; and the impact of GLP-1 drugs; the ability of Allurion to maintain its listing on the New York Stock Exchange; the effect of COVID-19, the
ALLURION TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the Three and Twelve Months Ended December 31, 2023 and 2022 (dollars in thousands, except per share amounts) |
||||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, |
|||||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Revenue |
$ |
8,235 |
|
$ |
19,184 |
|
$ |
53,467 |
|
$ |
64,211 |
|
||||
Cost of revenue |
|
1,805 |
|
|
3,940 |
|
|
11,970 |
|
|
13,485 |
|
||||
Gross profit |
|
6,430 |
|
|
15,244 |
|
|
41,497 |
|
|
50,726 |
|
||||
Operating expenses: |
||||||||||||||||
Sales and marketing |
|
10,730 |
|
|
14,941 |
|
|
46,857 |
|
|
50,405 |
|
||||
Research and development |
|
6,071 |
|
|
5,732 |
|
|
27,694 |
|
|
16,966 |
|
||||
General and administrative |
|
15,367 |
|
|
4,719 |
|
|
46,024 |
|
|
15,365 |
|
||||
Total operating expenses: |
|
32,168 |
|
|
25,392 |
|
|
120,575 |
|
|
82,736 |
|
||||
Loss from operations |
|
(25,738 |
) |
|
(10,148 |
) |
|
(79,078 |
) |
|
(32,010 |
) |
||||
Other income (expense): |
||||||||||||||||
Interest expense |
|
(3,235 |
) |
|
(1,760 |
) |
|
(10,566 |
) |
|
(4,426 |
) |
||||
Changes in fair value of warrants |
|
6,175 |
|
|
(922 |
) |
|
8,364 |
|
|
(821 |
) |
||||
Changes in fair value of debt |
|
— |
|
|
— |
|
|
(3,751 |
) |
|
— |
|
||||
Changes in fair value of Revenue Interest Financing and PIPE Conversion Option |
|
(152 |
) |
|
— |
|
|
(2,192 |
) |
|
— |
|
||||
Changes in fair value of earn-out liabilities |
|
4,720 |
|
|
— |
|
|
29,050 |
|
|
— |
|
||||
Termination of convertible note side letters |
|
— |
|
|
— |
|
|
(17,598 |
) |
|
— |
|
||||
Loss on extinguishment of debt |
|
— |
|
|
— |
|
|
(3,929 |
) |
|
— |
|
||||
Other income (expense), net |
|
(776 |
) |
|
530 |
|
|
(643 |
) |
|
(344 |
) |
||||
Total other income (expense): |
|
6,732 |
|
|
(2,152 |
) |
|
(1,265 |
) |
|
(5,591 |
) |
||||
Loss before income taxes |
|
(19,006 |
) |
|
(12,300 |
) |
|
(80,343 |
) |
|
(37,601 |
) |
||||
Provision for income taxes |
|
(174 |
) |
|
(48 |
) |
|
(264 |
) |
|
(143 |
) |
||||
Net loss |
|
(19,180 |
) |
|
(12,348 |
) |
|
(80,607 |
) |
|
(37,744 |
) |
||||
Cumulative undeclared preferred dividends |
|
(0 |
) |
|
(732 |
) |
|
(1,697 |
) |
|
(2,907 |
) |
||||
Net loss attributable to common shareholders |
$ |
(19,180 |
) |
$ |
(13,080 |
) |
$ |
(82,304 |
) |
$ |
(40,651 |
) |
||||
Net loss per share |
|
|
|
|||||||||||||
Basic and diluted |
$ |
(0.40 |
) |
|
$ |
(0.48 |
) |
$ |
(2.31 |
) |
$ |
(1.51 |
) |
|||
Weighted-average shares outstanding |
|
|
|
|||||||||||||
Basic and diluted |
|
47,519,884 |
|
|
|
27,006,285 |
|
|
35,581,656 |
|
|
26,918,484 |
|
|||
ALLURION TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands) |
||||||||
December 31, |
||||||||
|
|
2023 |
|
|
2022 |
|
||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
38,037 |
|
$ |
7,685 |
|
||
Accounts receivable, net of allowance of doubtful accounts of |
|
18,194 |
|
|
29,346 |
|
||
Inventory, net |
|
6,171 |
|
|
3,865 |
|
||
Prepaid expenses and other current assets |
|
2,414 |
|
|
2,487 |
|
||
Total current assets |
|
64,816 |
|
|
43,383 |
|
||
Property and equipment, net |
|
3,381 |
|
|
2,382 |
|
||
Right-of-use asset |
|
3,010 |
|
|
2,899 |
|
||
Other long-term assets |
|
505 |
|
|
2,706 |
|
||
Total assets |
$ |
71,712 |
|
$ |
51,370 |
|
||
Liabilities and Stockholders’ Deficit |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ |
10,379 |
|
$ |
5,809 |
|
||
Current portion of term loan |
|
38,643 |
|
|
53,360 |
|
||
Current portion of lease liabilities |
|
908 |
|
|
905 |
|
||
Accrued expenses and other current liabilities |
|
15,495 |
|
|
15,793 |
|
||
Total current liabilities |
|
65,425 |
|
|
75,867 |
|
||
Convertible notes payable, net of discounts |
|
— |
|
|
3,103 |
|
||
Public warrant liabilities |
|
5,943 |
|
|
— |
|
||
Revenue Interest Financing liability |
|
36,200 |
|
|
— |
|
||
Earn-out liabilities |
|
23,990 |
|
|
— |
|
||
Lease liabilities, net of current portion |
|
2,306 |
|
|
2,163 |
|
||
Other liabilities |
|
8,335 |
|
|
2,551 |
|
||
Total liabilities |
|
142,199 |
|
|
83,684 |
|
||
Commitments and Contingencies (Note 16) |
||||||||
Stockholders’ deficit: |
||||||||
Preferred stock, |
|
— |
|
|
— |
|
||
Common stock, |
|
5 |
|
|
3 |
|
||
Additional paid-in capital |
|
143,007 |
|
|
99,875 |
|
||
Accumulated other comprehensive loss |
|
(700 |
) |
|
— |
|
||
Accumulated deficit |
|
(212,799 |
) |
|
(132,192 |
) |
||
Total stockholders’ deficit |
|
(70,487 |
) |
|
(32,314 |
) |
||
Total liabilities and stockholders’ deficit |
$ |
71,712 |
|
$ |
51,370 |
|||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240321260031/en/
Global Media
Cedric Damour
PR Manager
+33 7 84 21 02 20
cdamour@allurion.com
Investors
Mike Cavanaugh, Investor Relations
ICR Westwicke
(617) 877-9641
mike.cavanaugh@westwicke.com
Source: Allurion Technologies, Inc.
FAQ
What was Allurion's Q4 revenue for 2023?
What was the full-year revenue for Allurion in 2023?
What is Allurion's ticker symbol?
What is Allurion's 2024 revenue guidance range?
What is the expected cash burn for Allurion in 2024?
What milestone did Allurion achieve with the completion of the AUDACITY pivotal trial?
How did Allurion address the decrease in gross profit for Q4?
What impact did macroeconomic conditions have on Allurion's Q4 revenue?
