Allurion Reports Second Quarter 2024 Financial Results and Provides Business Update

Rhea-AI Summary

Allurion Technologies (NYSE: ALUR) reported Q2 2024 financial results, showing strong sequential revenue growth and record procedure volume. Key highlights include:

- Q2 revenue of $11.8 million, up 25% from Q1 2024
- Loss from operations reduced by 30% year-over-year
- Procedure volume grew 12% year-over-year, with over 10,000 balloon placements
- Updated 2024 revenue guidance to $40-$45 million
- Completed public offering raising $22 million in gross proceeds

The company faced a setback in France with the suspension of Allurion Balloon sales but is working on a remediation plan. Allurion aims to achieve profitability by the end of 2025 and continues to innovate, including expanding AI-powered weight loss coach capabilities.

Positive

• Q2 revenue increased 25% sequentially to $11.8 million
• Procedure volume grew 12% year-over-year, reaching over 10,000 balloon placements
• Loss from operations reduced by 30% compared to Q2 2023
• Gross profit margin maintained at 76%
• Raised $22 million in gross proceeds through public offering and private placement
• Expanded AI-powered Coach Iris capabilities to support patients on GLP-1 drug therapy

Negative

• Full-year 2024 revenue guidance lowered to $40-$45 million
• Year-over-year revenue decrease due to de-stocking and macroeconomic headwinds
• Sales suspended in France pending implementation of a remediation plan
• General and administrative expenses increased by $0.9 million due to financing costs

Insights

Financial Analyst

Allurion's Q2 2024 results show mixed signals. While the $11.8 million revenue represents a 25% sequential increase, it's down year-over-year. The reduced operating loss by 30% (or 44% excluding one-time costs) is positive, indicating improved efficiency. However, the updated full-year guidance of $40-45 million suggests challenges ahead.

The record procedure volume is encouraging, but inventory destocking and macroeconomic headwinds are concerning. The suspension in France adds uncertainty. The recent $22 million capital raise strengthens the balance sheet, potentially providing runway through key milestones. The company's aim for profitability by end of next year is ambitious given the current loss levels.

Medical Research Analyst

Allurion's recent study showing 5.6% lean mass gain with 14% weight loss is intriguing, potentially differentiating their approach in the competitive weight loss market. The expansion of AI Coach Iris to support GLP-1 patients is strategic, aligning with current trends in obesity treatment.

The AUDACITY trial's progress is important for potential U.S. market entry. However, the French regulatory action raises questions about product safety perception, despite the company's claims of established safety. The focus on improving physician training and patient follow-up in response is prudent but may impact near-term growth.

Market Research Analyst

Allurion's position in the burgeoning weight loss market is both promising and precarious. The record procedure volume indicates growing demand, but regulatory challenges in France highlight potential hurdles in scaling globally. The integration of AI support for GLP-1 users is savvy, potentially capturing a broader customer base.

However, macroeconomic headwinds and inventory destocking issues suggest market volatility. The reduced revenue guidance reflects these challenges. Allurion's success may hinge on effectively navigating regulatory landscapes, differentiating from pharmaceutical alternatives and capitalizing on the growing obesity treatment market despite economic uncertainties.

Results highlighted by strong sequential revenue growth and record procedure volume

NATICK, Mass.--(BUSINESS WIRE)-- Allurion Technologies, Inc. (NYSE: ALUR) (“Allurion” or the “Company”), a company dedicated to ending obesity, today announced its financial results for the second quarter ended June 30, 2024 and provided a business update.

Recent Company Highlights

• Second quarter revenue of $11.8 million, a sequential increase of $2.4 million or 25% from the first quarter of 2024
• Second quarter loss from operations reduced by 30% compared to the year-ago period and by 44% when one-time financing costs are excluded
• Procedure volume, as estimated through new app users, grew by 12% year-over-year, a quarterly record that equated to over 10,000 Allurion balloon placements for the second consecutive quarter
• Updating full-year 2024 revenue guidance to between $40 million and $45 million
• Announced the publication of a third-party study demonstrating active patients gained an average of 5.6% lean mass while still averaging 14% weight loss on the Allurion Program
• Expanded capabilities of Coach Iris—the Company’s proprietary, AI-powered weight loss coach—to support patients on GLP-1 drug therapy
• Successfully treated last patient in the AUDACITY trial with second balloon, putting trial completion on track for end of this year
• Completed a public offering and concurrent private placement of securities on July 1, 2024 which generated approximately $22.0 million in gross proceeds

“After restructuring our business at the end of 2023, the entire Allurion team executed at a high level and posted a second consecutive quarter of sequential revenue growth, record procedure volume, and significant improvements in operating income,” said Dr. Shantanu Gaur, Chief Executive Officer. “With a balance sheet strengthened from our recent public offering, we now believe we have the cash runway to execute through significant milestones and are working toward a plan to achieve profitability by the end of next year.

“While our business is operating much more efficiently, we continue to innovate. We launched GLP-1 drug support for Coach Iris, advancing our vision to create a verticalized, conversational AI agent for weight loss that any patient can use,” Dr. Gaur continued. “We believe the 24/7, 360-degree support that our digital platform provides enables best-in-class outcomes, including improvements in body composition and muscle mass that have proven difficult to achieve using other modalities. We intend to build upon these advancements with our recent launch of the Virtual Care Suite in the United States and to capitalize on the enormous opportunity in the overall weight loss management space.”

The Company previously announced on August 6, 2024, that ANSM, the French regulatory authority, has suspended sales of the Allurion Balloon and that the Company is withdrawing the device from the French market, pending implementation of a remediation plan to reduce certain risks associated with the advertising of the Balloon and patient follow-up and physician education programs. The Company is cooperating with the French regulatory authority on executing its remediation plan and hopes to resume commercialization as soon as possible. Importantly, this decision is not a result of any new, published scientific evidence regarding the Allurion Balloon, and no regulatory authority outside of France has taken any similar action.

“The safety of the Allurion Balloon has been well-established in 20 peer-reviewed publications and over 150,000 patients we estimate that we have treated commercially,” Dr. Gaur continued. “In France, as well as globally, our complication rates remain in line with the rates reported in the published literature on the Allurion Balloon, and well below data from pivotal studies from other weight loss products still on the market in France. While we disagree with the decision from ANSM, we have had an open dialogue with them and have already begun executing against a remediation plan we presented to ANSM that focuses on changes to our advertising, patient follow-up, and physician training.”

The Company is updating its full-year 2024 revenue guidance to between $40 million and $45 million and expects growth in procedure volume to be between 10% and 15%.

“We have adjusted our guidance to take into account the disruption of sales in France, more conservative assumptions on inventory stocking, and macroeconomic headwinds in other regions that we believe will lead to slower growth than originally expected in the second half of 2024,” said Dr. Gaur.

Second Quarter Financial Results

Total revenue for the quarter ended June 30, 2024 was $11.8 million, compared to $9.4 million for the first quarter of 2024 and $13 million for the same period in 2023. The year-over-year decrease in revenue reflected de-stocking, macroeconomic headwinds in certain markets leading to lower re-order rates during the period, and reductions in sales to certain accounts to manage credit risk.

Gross profit for the second quarter was 76%, compared to 77% for the same period in 2023.

Sales and marketing expenses for the second quarter decreased approximately $3.6 million to $6.7m million, compared to $10.3 million for the same period in 2023, driven largely by increased operating efficiency and our cost reduction initiatives implemented in the fourth quarter of 2023.

Research and development expenses decreased by $2.3 million to $4.3 million in the quarter driven by reduced costs related to our AUDACITY clinical trial in the United States.

General and administrative expenses of $7.3 million increased by $0.9 million, driven by $1.9 million of financing costs incurred during the second quarter related to refinancing our debt, our public offering and concurrent private placement, partially offset by accounts receivable reserves recorded in the prior period. Excluding those financing costs, general and administrative expenses would have been $0.9 million less than the prior year due to cost reduction initiatives.

Loss from operations for the second quarter decreased by $3.9 million to $9.3 million, compared to $13.3 million in the same period in 2023. The decrease in loss from operations was driven by our efforts to reduce operating costs, partially offset by $1.9M in financing costs.

Cash balance on June 30, 2024 was $19.3 million, which was prior to the closing of the public, and concurrent private, offering of securities.

Conference Call and Webcast Details

Company management will host a conference call to discuss financial results and provide a business update on August 13, 2024 at 8:30 AM ET.

To access the conference call by telephone, please dial +1 (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. The archived webcast will also be available on Allurion’s Investor Relations website mentioned above shortly after the completion of the call.

About Allurion

Allurion is dedicated to ending obesity. The Allurion Program is a weight loss platform that features the Allurion Gastric Balloon, the world’s first and only swallowable, procedure-less(TM) intragastric balloon for weight loss, and offers access to the Allurion Virtual Care Suite, including the Allurion Mobile App for consumers, Allurion Insights for health care providers featuring the Coach 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: gastric balloon, surgical, medical or nutritional. The Allurion Gastric Balloon is an investigational device in the United States.

For more information about Allurion and the Allurion Virtual Care Suite, please visit www.allurion.com.

Allurion is a trademark of Allurion Technologies, Inc. in the United States and countries around the world.

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; cash runway and the expected sufficiency and duration of cash balance to meet milestones and achieve profitability; the performance and market acceptance of products, including Virtual Care Suite and the Coach Iris feature, for patients using different weight loss therapies both outside and within the United States; Allurion’s ability to implement remediation efforts sufficient to satisfy French regulatory authorities and resume sales and marketing efforts in France; that the Company’s digital platform will enable best-in-class outcomes; 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 and maintain 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 Russia and Ukraine war and the Israel-Hamas war on Allurion’s business and financial results; the outcome of any legal proceedings against Allurion; the risk of economic downturns and a changing regulatory landscape in the highly competitive industry in which Allurion competes; and those factors discussed under the heading “Risk Factors” in the Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 26, 2024, as amended, and other filings with the SEC. Furthermore, if the forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that Allurion will achieve its objectives and plans in any specified time frame, or at all. The forward-looking statements in this press release represent Allurion’s views as of the date of this press release. Allurion anticipates that subsequent events and developments will cause its views to change. However, while Allurion may elect to update these forward-looking statements at some point in the future, Allurion has no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing Allurion’s views as of any date subsequent to the date of this press release.

Unaudited Condensed Consolidated Statements of Operations (dollars in thousands, except per share amounts)
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Revenue		$	11,766			$	12,960			$	21,152			$	27,031
Cost of revenue			2,773				2,992				5,293				5,932
Gross profit			8,993				9,968				15,859				21,099
Operating expenses:
Sales and marketing			6,718				10,273				12,863				22,137
Research and development			4,310				6,581				10,035				14,433
General and administrative			7,311				6,408				13,697				11,714
Total operating expenses:			18,339				23,262				36,595				48,284
Loss from operations			(9,346	)			(13,294	)			(20,736	)			(27,185	)
Other income (expense):
Interest expense			(339	)			(2,508	)			(2,270	)			(4,745	)
Changes in fair value of warrants			1,376				(204	)			4,507				(1,679	)
Changes in fair value of debt			8,230				2,257				8,230				2,257
Changes in fair value of Revenue Interest Financing and PIPE Conversion Option			6				—				1,496				—
Changes in fair value of earn-out liabilities			5,690				—				19,880				—
Loss on extinguishment of debt			(8,713	)			—				(8,713	)			—
Termination of convertible note side letters			—				(8,134	)			—				(8,134	)
Other income (expense), net			999				(91	)			1,171				(255	)
Total other income (expense):			7,249				(8,680	)			24,301				(12,556	)
Income (loss) before income taxes			(2,097	)			(21,974	)			3,565				(39,741	)
Provision for income taxes			(65	)			(22	)			(141	)			(56	)
Net Income (loss)			(2,162	)			(21,996	)			3,424				(39,797	)
Cumulative undeclared preferred dividends			—				(725	)			—				(1,442	)
Net income (loss) attributable to common shareholders		$	(2,162	)		$	(22,721	)		$	3,424			$	(41,239	)
Net income (loss) per share
Basic		$	(0.05	)		$	(0.84	)		$	0.07			$	(1.52	)
Diluted		$	(0.05	)		$	(0.84	)		$	0.07			$	(1.52	)
Weighted-average shares outstanding
Basic			47,946,609				27,107,397				47,862,980				27,097,341
Diluted			47,946,609				27,107,397				48,982,998				27,097,341

Unaudited Condensed Consolidated Balance Sheets (dollars in thousands)
		June 30, 2024				December 31, 2023
Assets
Current assets:
Cash and cash equivalents		$	19,258			$	38,037
Accounts receivable, net of allowance of doubtful accounts of $11,363 and $12,671, respectively			13,357				18,194
Inventory, net			4,788				6,171
Prepaid expenses and other current assets			2,902				2,414
Total current assets			40,305				64,816
Property and equipment, net			3,254				3,381
Right-of-use asset			2,481				3,010
Other long-term assets			510				505
Total assets		$	46,550			$	71,712
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable		$	7,984			$	10,379
Current portion of term loan			-				38,643
Current portion of lease liabilities			850				908
Accrued expenses and other current liabilities			14,724				15,495
Total current liabilities			23,558				65,425
Public warrant liabilities			2,113				5,943
Revenue Interest Financing liability			39,000				36,200
Earn-out liabilities			4,110				23,990
Convertible notes payable, net of discounts and current portion			40,950				—
Lease liabilities, net of current portion			1,788				2,306
Other liabilities			5,613				8,335
Total liabilities			117,132				142,199
Commitments and Contingencies
Stockholders’ deficit:
Preferred stock, $0.0001 par value — 100,000,000 shares authorized as of June 30, 2024; and no shares issued and outstanding as of June 30, 2024 and December 31, 2023			—				—
Common stock, $0.0001 par value — 1,000,000,000 shares authorized as of June 30, 2024; and 47,972,989 and 47,688,096 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively			5				5
Additional paid-in capital			144,768				143,007
Accumulated other comprehensive loss			(5,980	)			(700	)
Accumulated deficit			(209,375	)			(212,799	)
Total stockholders’ deficit			(70,582	)			(70,487	)
Total liabilities and stockholders’ deficit		$	46,550			$	71,712

Source: Allurion Technologies, Inc.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240813527429/en/

Investors

Mike Cavanaugh, Investor Relations

ICR Westwicke

(617) 877-9641

mike.cavanaugh@westwicke.com



Global Media

Cedric Damour

PR Manager

+33 7 84 21 02 20

cdamour@allurion.com

Source: Allurion Technologies, Inc.

FAQ

What was Allurion's revenue for Q2 2024?

Allurion's revenue for Q2 2024 was $11.8 million, representing a 25% increase from Q1 2024.

How many Allurion balloon placements were performed in Q2 2024?

Allurion reported over 10,000 balloon placements in Q2 2024, marking a 12% year-over-year growth in procedure volume.

What is Allurion's updated revenue guidance for 2024?

Allurion updated its full-year 2024 revenue guidance to between $40 million and $45 million.

Why were Allurion Balloon sales suspended in France?

ANSM, the French regulatory authority, suspended Allurion Balloon sales pending implementation of a remediation plan to address risks associated with advertising, patient follow-up, and physician education programs.

How much capital did Allurion raise in its recent public offering?

Allurion completed a public offering and concurrent private placement on July 1, 2024, which generated approximately $22.0 million in gross proceeds.