Allurion Reports Third Quarter 2024 Financial Results and Provides Business Update

NATICK, Mass.--(BUSINESS WIRE)--November 13, 2024-- 

Allurion Technologies, Inc. $(ALUR)$ ("Allurion" or the "Company"), a company dedicated to ending obesity, today announced its financial results for the third quarter ended September 30, 2024 and provided a business update.

Recent Company Highlights

   -- 
 Revenue of $5.4 million, which includes a reduction of $1.2 million for 
      product recalled from France during the third quarter 
 
 
   -- 
 AI product revenue in the third quarter from the Virtual Care Suite 
      (VCS) grew by 82% versus prior year as first patients in the United 
      States treated with GLP-1s were on-boarded 
 
 
   -- 
 Last patient in AUDACITY FDA clinical trial successfully exited, 
      putting top-line readout on track for the end of the year 
 
 
   -- 
 Worked collaboratively with ANSM to prepare remediation plan for France, 
      which was submitted in August and completed in September 
 
 
   -- 
 Updating full-year 2024 revenue guidance to between $30 million and $35 
      million 
 
 
   -- 
 Initiated business restructuring which is expected to reduce operating 
      expense by 50% in 2025 and achieve profitability by end of 2025 
 
 
   -- 
 Completed submissions to the FDA of three out of four modules required 
      for the Pre-Market Approval (PMA) application for the Allurion Balloon 
 
 
   -- 
 Announced appointment of Adrian Wild as SVP International Commercial 
      and plans to restructure commercial operations and strategy 
 

"We observed robust growth in procedure volume in the third quarter in regions previously impacted by GLP-1s like the Middle East and in parts of Latin America where the macro headwinds we have faced previously appear to be subsiding," said Dr. Shantanu Gaur, Chief Executive Officer. "Our results were adversely affected by the suspension of sales in France, destocking in certain markets, and the availability of compounded GLP-1s in the UK. Overall, our performance validates the need for considerable change at Allurion. As part of our restructuring, we have installed new leadership in the commercial team and are implementing a new sales strategy that strengthens the sales force in number and focus, shifting them away from less efficient direct-to-consumer approaches and toward what we expect to be more profitable and predictable business-to-business-to-consumer sales strategies with a specific focus on direct markets. With our new plan going into 2025, I have clarity and excitement about our path forward.

"We remain committed to achieving profitability by the end of next year, and we are optimistic about future catalysts, including the AUDACITY read-out expected before the end of this year. We are also optimistic about resuming commercialization in France following the completion of our remediation plan in September. In parallel, we have been pleased to see a steady stream of research articles on the Allurion Balloon published in peer-reviewed journals that validate the balloon's safety and efficacy," Dr. Gaur continued.

"We have also observed robust growth in our AI product revenue, especially as providers expand their practices with GLP-1s. With revenues increasing at this pace, we believe we can expand this business further and plan on testing Coach Iris--our verticalized, conversational AI agent for weight loss--in different use cases in the coming months."

The Company is updating its full-year 2024 revenue guidance to between $30 million and $35 million and expects growth in procedure volume to be flat year-over-year.

In early November 2024, the Company began implementing a worldwide restructuring plan (the "2024 Restructuring Plan"). The 2024 Restructuring Plan was designed to align the Company's operating expenses with its current sales forecast and strategic plan with a focus on sales and marketing outside of the United States. This restructuring included a worldwide reduction in both workforce and operating expenses of approximately 50% to reduce future operating cash burn. These actions are intended to increase operational and financial flexibility, position the Company to navigate an evolving economic landscape, and extend its financial runway for sustained future growth in 2025 and beyond. The Company anticipates recording restructuring charges of approximately $3.5 million in the fourth quarter of 2024.

Third Quarter Financial Results

Total revenue for the quarter ended September 30, 2024 was $5.4 million, compared to $18.2 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, the temporary suspension of sales in France and the resulting reduction to revenue in the period for product recalled in the third quarter of 2024 from France, and reductions in sales to certain accounts to manage credit risk.

Gross profit for the third quarter was 58%, compared to 77% for the same period in 2023, negatively impacted by the reduction to revenue in the period related to the product recalled in France, and lower production volumes, which resulted in less manufacturing labor and overhead being absorbed into inventory costs.

Sales and marketing expenses for the third quarter decreased by approximately $8.8 million to $5.2m million, compared to $14.0 million for the same period in 2023, driven largely by increased operating efficiency and our previous cost reduction initiatives implemented in the fourth quarter of 2023.

Research and development expenses decreased by $4.0 million to $3.2 million in the quarter driven by reduced costs related to our AUDACITY clinical trial.

General and administrative expenses of $7.0 million decreased by $11.9 million, driven by $10.0 million of transaction-related expenses and stock-based compensation expense related to the business combination with Compute Health recognized in the third quarter of 2023 and less bad debts expense recognized in the third quarter of 2024 compared to the third quarter of 2023.

Loss from operations for the third quarter decreased by $13.8 million to $12.3 million, compared to $26.2 million in the same period in 2023. The decrease in loss from operations was driven by $10.0 million of transaction-related expenses and stock-based compensation expense related to the business combination with Compute Health recognized in the third quarter of 2023 and less bad debts expense recognized in the third quarter of 2024 compared to the third quarter of 2023 as well as our efforts to reduce operating costs.

Cash balance on September 30, 2024 was $28.7 million.

Conference Call and Webcast Details

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

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. 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.

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November 13, 2024 08:00 ET (13:00 GMT)