Apollo Endosurgery, Inc. Reports Record Endoscopy Revenue in Second Quarter, Raises Full-Year Outlook Conference Call to Discuss Results Today at 3:30 p.m. CT / 4:30 p.m. ET
Apollo Endosurgery reported strong financial results for Q2 2021, achieving total revenue of $16.6 million, a remarkable 194% increase from Q2 2020. This growth is attributed to a 196% rise in Endoscopic Suturing System (ESS) sales and a 220% increase in Intragastric Balloon (IGB) sales. The company's gross margin improved to 55%. Apollo also expanded its X-Tack user base to over 120 active sites and announced positive results from the MERIT study. The company raised its full-year revenue guidance to $61-$63 million.
- Total revenue reached $16.6 million, up 194% from Q2 2020.
- ESS revenue increased by 23% and IGB revenue by 16% sequentially.
- Gross margin improved to 55%.
- Over 120 active sites using the X-Tack device.
- Positive early outcomes from the MERIT study.
- Increased full-year revenue guidance to $61-$63 million.
- Net loss of $3.0 million, despite improvement from $6.3 million in Q2 2020.
- Total operating expenses rose by $7.6 million compared to Q2 2020.
AUSTIN, TX / ACCESSWIRE / August 3, 2021 / Apollo Endosurgery, Inc. ("Apollo") (Nasdaq:APEN), a global leader in less invasive medical devices for gastrointestinal and bariatric procedures, today announced financial results for the second quarter ended June 30, 2021.
Highlights
- Achieved total revenue of
$16.6 million , an increase of194% compared to the second quarter of 2020, and a new revenue record for the Company* - Increased Endoscopic Suturing System (ESS) revenue
23% and Intragastric Balloon (IGB) revenue16% on a sequential basis compared to the first quarter of 2021 - Realized gross margin of
55% on favorable product mix - Continued rollout of X-Tack™ with now more than 120 active sites, demonstrating excellent product performance, a short learning curve, and utility in a diverse range of upper and lower GI applications
- Reported that the Multi-Center ESG Randomized Interventional Trial (MERIT) study investigators announced successful achievement of the study's primary efficacy and safety endpoints
- Strengthened the Apollo leadership team with the additions of Kirk Ellis as Vice President of Sales, Steve Bosrock as Vice President of Marketing & Medical Education, and Jeffrey Black as Chief Financial Officer
2021 Outlook
Based on results in the first half of 2021, the Company is increasing its guidance for the full year 2021 and now expects revenue between
"In the second quarter, Apollo continued to build momentum by delivering strong financial performance, including record revenue and increased gross margin," said Chas McKhann, Apollo's Chief Executive Officer. "We also achieved a number of strategic milestones, including sequential growth in our ESS and IGB business lines, positive early indication on MERIT study outcomes and a significant expansion of our X-Tack user base. We believe that these accomplishments plus additions to our leadership team and commercial organization position us well for the future."
Second Quarter Results
Total revenues were
Compared to the second quarter of 2020, total ESS product sales increased
Gross margin increased to
Total operating expenses increased
Net loss for the second quarter of 2021 was
Cash, cash equivalents and restricted cash were
* Excluding divested product lines.
Conference Call
Apollo will host a conference call on August 3, 2021 at 3:30 p.m. Central Time / 4:30 p.m. Eastern Time to discuss Apollo's operating results for the second quarter ended June 30, 2021. To join the conference call by telephone, please dial +1-973-528-0011. A live webcast of the conference call will be made available on the "Events and Presentations" section of our Investor Relations website: ir.apolloendo.com.
A replay of the webcast will be made available on Apollo's website, www.apolloendo.com following the call.
Non-GAAP Financial Measures
To supplement our financial results, we are providing a non-GAAP financial measure, product sales percentage change in constant currency, which removes the impact of changes in foreign currency exchange rates that affect the comparability and trend of revenues compared to the same period of the prior year. Product sales percentage change in constant currency is calculated by translating current foreign currency sales at last year's exchange rate. This supplemental measure of our performance is not required by, and is not determined in accordance with GAAP.
We believe the non-GAAP financial measure included herein is helpful in understanding our current financial performance. We use this supplemental non-GAAP financial measure internally to understand, manage and evaluate our business, and make operating decisions. We believe that making non-GAAP financial information available to investors, in addition to GAAP financial information, may facilitate more consistent comparisons between the company's performance over time with the performance of other companies in the medical device industry, which may use similar financial measures to supplement their GAAP financial information. However, our non-GAAP financial measure is not meant to be considered in isolation or as a substitute for the comparable GAAP metric.
About Apollo Endosurgery, Inc.
Apollo Endosurgery, Inc. is a medical technology company focused on development of next-generation, less invasive devices to advance therapeutic endoscopy designed to treat a variety of gastrointestinal conditions including closure of gastrointestinal defects, managing gastrointestinal complications and the treatment of obesity. Apollo's device-based therapies are an alternative to invasive surgical procedures, thus lowering complication rates and reducing total healthcare costs. Apollo's products are offered in over 75 countries today and include the OverStitch™ Endoscopic Suturing System, the OverStitch Sx™ Endoscopic Suturing System, X-Tack TM Endoscopic HeliX Tacking System and the ORBERA® Intragastric Balloon.
Apollo's common stock is traded on the Nasdaq Global Market under the symbol "APEN". For more information regarding Apollo Endosurgery, go to: www.apolloendo.com.
Cautionary Note on Forward-Looking Statements
Certain statements in this press release are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. In addition, there is uncertainty about the spread of the COVID-19 virus and the impact it may have on the Company's operations, the demand for the Company's products, the Company's liquidity position, global supply chains and economic activity in general. Important factors that could cause actual results to differ materially include: reports of adverse events related to our products, outcomes of clinical studies related to our products, development of competitive medical products by competitors, regulatory approvals and extensive regulatory oversight by the FDA or other regulatory authorities, unfavorable media coverage related to our products or related procedures, coverage and reimbursement decisions by private or government payors, Apollo's ability to support the adoption of its products and broaden its product portfolio; the potential size of Apollo's addressable markets; the execution of our gross margin improvement projects; the ability to collect future payments from ReShape; and the availability of cash for Apollo's future operations as well as other factors detailed in Apollo's periodic reports filed with the Securities and Exchange Commission, or SEC, including its Form 10-K for the year ended December 31, 2020 and its Form 10-Q for the period ending June 30, 2021. Copies of reports filed with the SEC are posted on Apollo's website and are available from Apollo without charge. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, Apollo disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.
Disclosure Information
Apollo uses the investor relations section of its website as a means of complying with its disclosure obligations under Regulation FD. Accordingly, we recommend that investors monitor Apollo's investor relations website in addition to following Apollo's press releases, SEC filings, and public conference calls and webcasts.
Contacts
Apollo Endosurgery, Inc.
investor-relations@apolloendo.com
Darrow Associates Investor Relations
Matt Kreps, 214-597-8200
mkreps@darrowir.com
APOLLO ENDOSURGERY, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except for share data)
(unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
| 2021 | 2020 | 2020 | 2021 | |||||||||||||
Revenues | $ | 16,610 | $ | 5,644 | $ | 30,467 | $ | 16,362 | ||||||||
Cost of sales | 7,487 | 3,215 | 13,837 | 8,296 | ||||||||||||
Gross margin | 9,123 | 2,429 | 16,630 | 8,066 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 6,005 | 2,265 | 10,795 | 8,595 | ||||||||||||
General and administrative | 5,338 | 2,157 | 9,407 | 5,496 | ||||||||||||
Research and development | 2,550 | 1,815 | 4,478 | 3,962 | ||||||||||||
Amortization of intangible assets | 471 | 490 | 945 | 986 | ||||||||||||
Total operating expenses | 14,364 | 6,727 | 25,625 | 19,039 | ||||||||||||
Loss from operations | (5,241 | ) | (4,298 | ) | (8,995 | ) | (10,973 | ) | ||||||||
Other (income) expenses: | ||||||||||||||||
Interest expense, net | 1,334 | 1,316 | 2,686 | 2,560 | ||||||||||||
Gain on forgiveness of PPP loan | (2,852 | ) | - | (2,852 | ) | - | ||||||||||
Other (income) expense, net | (775 | ) | 633 | (1,339 | ) | 2,927 | ||||||||||
Net loss before income taxes | (2,948 | ) | (6,247 | ) | (7,490 | ) | (16,460 | ) | ||||||||
Income tax expense | 71 | 6 | 130 | 49 | ||||||||||||
Net loss | $ | (3,019 | ) | $ | (6,253 | ) | $ | (7,620 | ) | $ | (16,509 | ) | ||||
Net loss per share, basic and diluted | $ | (0.11 | ) | $ | (0.30 | ) | $ | (0.28 | ) | $ | (0.78 | ) | ||||
Shares used in computing net loss per share, basic and diluted | 27,269,838 | 21,152,937 | 26,790,801 | 21,135,032 | ||||||||||||
APOLLO ENDOSURGERY, INC. AND SUBSIDIARIES
Product Sales by Product Group and Geographic Market
Unaudited (In thousands)
| Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | % Increase/ (Decrease) | ||||||||||||||||||||||||||||||||||
| U.S. | OUS | Total Revenues | U.S. | OUS | Total Revenues | U.S. | OUS | Total Revenues | ||||||||||||||||||||||||||||
ESS | $ | 6,860 | $ | 3,764 | $ | 10,624 | $ | 2,384 | $ | 1,206 | $ | 3,590 | 187.8 | % | 212.1 | % | 195.9 | % | ||||||||||||||||||
IGB | 2,094 | 3,659 | 5,753 | 760 | 1,039 | 1,799 | 175.5 | % | 252.2 | % | 219.8 | % | ||||||||||||||||||||||||
Other | 232 | 1 | 233 | 255 | - | 255 | (9.0 | )% | 100.0 | % | (8.6 | )% | ||||||||||||||||||||||||
Total revenues | $ | 9,186 | $ | 7,424 | $ | 16,610 | $ | 3,399 | $ | 2,245 | $ | 5,644 | 170.3 | % | 230.7 | % | 194.3 | % | ||||||||||||||||||
| Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | % Increase/ (Decrease) | ||||||||||||||||||||||||||||||||||
| U.S. | OUS | Total Revenues | U.S. | OUS | Total Revenues | U.S. | OUS | Total Revenues | ||||||||||||||||||||||||||||
ESS | $ | 12,255 | $ | 7,008 | $ | 19,263 | $ | 6,139 | $ | 4,283 | $ | 10,422 | 99.6 | % | 63.6 | % | 84.8 | % | ||||||||||||||||||
IGB | 3,564 | 7,152 | 10,716 | 1,658 | 3,667 | 5,325 | 115.0 | % | 95.0 | % | 101.2 | % | ||||||||||||||||||||||||
Other | 474 | 14 | 488 | 582 | 33 | 615 | (18.6 | )% | (57.6 | )% | (20.7 | )% | ||||||||||||||||||||||||
Total revenues | $ | 16,293 | $ | 14,174 | $ | 30,467 | $ | 8,379 | $ | 7,983 | $ | 16,362 | 94.5 | % | 77.6 | % | 86.2 | % | ||||||||||||||||||
Non-GAAP product sales percentage change in constant currency were as follows:
| Three Months Ended June 30, 2021 | Six Months Ended June 30, 2021 | |||||||||||||||
| % Increase/Decrease in Constant Currency | % Increase/Decrease in Constant Currency | |||||||||||||||
| OUS | Total Revenues | OUS | Total Revenues | |||||||||||||
ESS | 191.3 | % | 189.0 | % | 55.5 | % | 81.5 | % | ||||||||
IGB | 229.6 | % | 206.8 | % | 84.2 | % | 93.8 | % | ||||||||
Total revenues | 209.0 | % | 185.7 | % | 67.2 | % | 72.8 | % | ||||||||
SOURCE: Apollo Endosurgery, Inc.
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