UPDATED Sept. 12, 2016, with comment on PMA from Obalon.
Obalon Therapeutics today registered for an initial public offering worth as much as $75 million, revealing in the process that it won pre-market approval from the FDA for its ingestible, gas-filled weight-loss balloon and plans to have it on the U.S. market in early 2017.
Carlsbad, Calif.-based Obalon said the PMA is for temporary use to facilitate weight loss in obese adults with a body mass index of 30 to 40, who have failed to lose weight through diet and exercise. The device is designed to be swallowed in a capsule; once it hits the stomach, it inflates with gas, partially filling the stomach to help patients feel full and eat less. Up to 3 balloons may be added during treatment, after which they’re removed via an endoscopic procedure not more than 6 months later.
An earlier, 3-month version was on the market in the European Union, Mexico and the Middle East beginning in 2012, but Obalon said in its IPO filing that it decided last year to turn toward winning U.S. approval and stopped selling the device everywhere but the Middle East.
“Having received PMA approval for the Obalon balloon system, we are currently focused on commencing U.S. commercialization using a direct sales force, which we anticipate will occur in early 2017. We initially plan to sell the Obalon balloon system on a self-pay basis to bariatric surgeons and gastroenterologists with existing weight loss practices. We believe the design features of the Obalon balloon system will enable us to penetrate these existing physician specialties and later expand into new specialties, such as plastic surgery,” the company said in the filing.
“We’re excited to bring this novel technology to the approximately 70 million adults in the U.S. who are struggling with obesity. For physicians, we believe that the Obalon technology represents an important new option for both their practices and their patients who are obese and looking to lose weight,” CEO Andy Rasdal said in prepared remarks. “I’d also like to recognize the FDA for their efficient and interactive review of our product, which represents another option for physicians and patients in the battle against the obesity epidemic.”
“We participated in the Obalon clinical trial and are excited to now have the Obalon Balloon System readily available for our patients who have been frustrated by not being able to lose weight through diet and exercise alone,” added Dr. Aurora Pryor of the Stony Brook University School of Medicine’s Department of Surgery. “The Obalon balloon is swallowable, can typically be placed in less than 10 minutes without the use of sedation or anesthesia and was well-tolerated by our patients in the clinical trial. Having now received FDA approval, we can begin treating more patients with the device.”
Obalon raised $30 million in January 2015, consisting of $20 million in Series D financing and a $10 million term loan. The cash went toward the 387-patient Smart pivotal clinical trial, a sham-controlled study that backed the company’s PMA bid. Patients treated with the balloon lost roughly twice the weight as patients in the sham arm and showed a low rate of serious adverse device events, Obalon said in the filing.
Losses widened 57.4% to -$15.6 million last year on sales growth of 14.1% to $4.0 million, the company said. Losses grew 7.8% during the 1st half of this year, to -$7.7 million, on a -5.9% sales decline to $1.8 million, Obalon said.
Founded in 2008, the company is backed by Domain Associates, InterWest Partners, Okapi Venture Capital, AmorePacific, Axon Ventures, Bader Sultan & Bros., Mirae Asset Venture Investment, NeoPlux, Striker Asia Opportunities Fund and Square 1 Bank.
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