ReShape Lifesciences Inc.
Q3 2021 Earnings Call Transcript

Published: 12 Nov 2021

[Operator:]

Good morning, and thank you for joining the Third Quarter 2021 ReShape Lifesciences Earnings Webinar. I am pleased to be joined by Bart Bandy, Chief Executive Officer of ReShape Lifesciences Inc., who will provide an overview of the Company's recent activity during the third quarter of 2021. Tom Stankovich, Chief Financial Officer of ReShape, will then review the financial results for the recent quarter and then turn the call back over to Bart to finish. As a reminder, this conference call as well as ReShape Lifesciences' SEC filings and website, including the Investor Information section of the website, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those discussed due to known and unknown risks, uncertainties and other factors. These and additional risks and uncertainties are described more fully in the Company's filings with the Securities and Exchange Commission, including those factors identified as risk factors in our most recent annual report on Form 10-K and our quarterly report on Form 10-Q. As an additional reminder, our stock is listed on the NASDAQ capital market trading under the ticker symbol RSLS. I will now turn the call over to our CEO, Bart Bandy. Bart?

[Bart Bandy:]

Thanks, Daniel. Good morning, everyone, and thank you for joining us today. Throughout the third quarter of 2021, we executed several initiatives to further build momentum on the accomplishments we garnered in the previous quarter, including our merger with Obalon and listing on the NASDAQ. I am also pleased to report that we continue to strengthen our market position as demonstrated by our growing revenues for the first nine months in 2021 of $10.5 million, representing a 29% increase from the same period last year. Before I discuss in detail the work we've done to maximize the value of our product portfolio, I'd like to provide a brief synopsis of the massive market opportunity to ReShape. Studies show that 73% of American adults are overweight or obese, with about 50% of that population seeking to lose weight every year. To capitalize on this multibillion-dollar opportunity in the U.S. market by 2025, we made the informed and strategic decision to allocate our resources towards the debut of the Company's first and largest mass media, multi-platform advertising campaign for our lead product, the LAP-BAND, which has specific weight loss indications approved by the FDA and is covered by most insurance plans. Available across national television channels and major print publications, our goal is to effectively communicate the important benefits of the LAP-BAND directly to our targeted audience. We want to ensure that our product has high visibility in the marketplace for anyone seriously considering weight loss options. It is essential for the Company to promote the differentiators of our product, including its safety and efficacy profiles as well as the ability of this technology to be adjusted for individual needs and the procedure being available in outpatient surgery centers, with most patients going home the same day. Confirmed through recent test marketing programs and corroborated with historical impact of patient marketing programs for the LAP-BAND, we are highly encouraged by the substantial consumer engagement and revenue potential this campaign presents. To capture and retain patients in our ecosystem of weight loss solutions, we are also promoting ReShape Care, our reimbursed virtual weight management program led by physicians as a nonsurgical-based weight loss program as well as an after care support model for the bariatric surgeries that are available. Regarding product demand and interest, a Harris Poll research study reported that 61% of American adults experienced undesired weight changes during the pandemic, with 42% claiming they gained more weight than intended an average of 29 pounds. As the go-to company for physician-led weight loss products, we were approached by a number of health care professionals to help them adapt their practices for patients seeking weight last treatment during the pandemic. We responded in two ways

[Tom Stankovich:]

Thanks, Bart. And once again, thank you all for joining our webcast this morning. Following our capital raise of $46 million in June of 2021, which significantly improved our balance sheet. We embarked on executing our growth initiatives, including the launch of our major advertising campaign. Before turning to our detailed metrics, I'd like to provide some color on our noncash stock-based compensation expenses and costs related to the merger with Obalon that drove substantial increases in our operating expenses for the following areas

[End of Q&A:]

Thanks, Tom. In conclusion, the third quarter marked another period of robust performance and strengthening of our status as the premier, multifaceted, physician-led weight loss solutions company positioned for ongoing success through 2021 and beyond. Lastly, I would like to thank our Board, executive leadership team and all ReShape employees for their commitment that has fueled our rapid execution on initiatives that will help us to engage with millions of patients seeking weight loss and an improved quality of life. To our customers and shareholders, we sincerely appreciate your ongoing support, and we look forward to delivering future updates on our evolution towards progressive profitability and high sustainability.