ReShape Lifesciences (RSLS) 5 Jan 182017 Q4 Earnings call transcript

Good day ladies and gentlemen and welcome to the Obalon Therapeutics' Fourth Quarter and Full Year 2017 Preliminary Unaudited Revenue Results and Business Update Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Mr. Bill Plovanic, Chief Financial Officer for Obalon. Sir, you may begin.

you. Thank welcome unaudited fourth update revenue and year and conference Obalon preliminary XXXX results to morning quarter Therapeutics' full call. Good and business Therapeutics'. Bill am Plovanic, Financial for I Chief Obalon Officer Rasdal, With Chief me call on is Executive of Obalon. today's Officer Andy press This detailing revenue months full preliminary three XX, December release year morning, the issued ended for XXXX. unaudited company and the a results This website at Obalon section of release the can be accessed through the Investor Relations obalon.com.

webcast of this from You also access the can there. call

webcast from And year except archived presenting are the projected required performance. The obalon.com. are results review differ closing available on to and any intent the that made guarantees result would expectation, statements company's like events management those involves Obalon’s the to may today those forward-looking materially update to and from or Private the conference Obalon the final release procedures including in the forward-looking morning's procedures. preliminary SEC. of defined considered uncertainties, Before that subject available on and and website statements as to any of Such Obalon maybe forward-looking forward-looking may preliminary we be get call are by everyone statements. results these our statements today's independent Litigation started, I Securities for projection, remind company's Act. forecast, information unaudited statements final These auditors regarding as the risks of Reform will statements expresses noted with a the one differ belief, and forward-looking as press performance results future Actual not specifically law. anticipation obligation that future in or those filings this results on by disclaims of are also in note based intent as future we

related and filings. was turn to to may this X, the be announcements of to so that, discussed, please have then XXXX, the Obalon’s company’s since Obalon benefit recorded most call the the archived SEC Andy who January those And and press made reference over CEO, held the Rasdal. releases with listening For call webcast, may topics on recent I’ll

Good year briefly call, of briefly and Thank commercial revenue will highlights everyone. results for was our for On and with Obalon year will full I business grew Bill. the at am achieved the morning We with experience, a joining Thank commercialization. afterwards year transformational pleased QX. finished the have over a this discuss year today. XXXX first success and very QX of us I Obalon answer you, ended strong in you we and U.S. our questions. we full

East. of franchise quarter the increase was million in $X.X be expected is unaudited number over the revenues XXXX reorders we the XXXX. in for exceeded revenue fourth to continued and QX the highest we has quarter to for believe XX% sales, sales QX our month sustainable the preliminary growing our of the number largest first for approximately starts, order several X million, XX% registry, ever $X.X revenue and an encouraging XXX% fulfill QX placements QX to Middle our the from was million, quarter were from important of more International areas quarter the balloon approximately of of the In roughly account gen QX for revenue patient was XXX% XXXX U.S. greatest full about Overall $X up the XXXX. the in Perhaps from six patients highest for $X.X the existing was to-date $XXX,XXX accounts as account unaudited million, XXXX. of revenue was in from the stocking any million the our Preliminary in approximately new of number treating According revenue to balloon new in U.S. quarter highest to-date. of unaudited continue accounts year For approximately commercial from XXXX. revenues any initial fourth reorder distributor over preliminary improvement a long-term. $XXX,XXX time, in the new up XXXX or even $XX.X

international We opportunity and believe highest continue do East. in beyond, not U.S. the greatest plans and current make our our distributor the the to for we have meaningfully expanding values Middle our for us continue XXXX U.S. to beyond creating our executing will existing in priority

very patient performance seeking over period. our in would that are in to the was substantially weight QX counter interest loss and encouraged treatment holiday We volume and belief slightly slow with XXXX revenue it the

patient was in ahead some quarter the of demand patient purchased accounts may highest New XXXX, the any anticipation have Year. believe in with While demand higher associated of we

or would to this year’s new expect, what you we running a we At not weight able project As resolution reorder QX these in promotion. volume sales are are new time XXXX. dynamics will on loss account have impact

time to this require back requested clock. additional the addition as was is unusual, review not have we and a do once In major to as a we the At as would Because best we letter FDA loss for filling, loss such this believe the complete expect PMAs follow-up on a Navigation not and rejection, data term asked most efficient means working provide we or the are durability. For response data. the weight we things not clinical determine letter data weight us deficiency FDA. from received be provide longer the such clinical would to the

believe The current balloon system, into Finally system in is and we’d also and combine in this ease which for of market of terms both infancy a to opportunity in its to single further use. plan safety use Touch improvements we provide the Obalon development. will Navigation the

year progress commercial in U.S. We are by sales. full our encouraged of and of success our first level

provides providers. important strong our experience reinforce Obalon's very there and for because belief transfers outcomes a Our the significant problem, unique to balloon, swallowable is that solves in continues to economic gas-filled it large

required We like the valuable to operator, Obalon. call very line the would please will will believe a its potential now I continue hand investments the operator the over you to the market to be create open for we continue I franchise. sustainable and now future business to develop make to and optimistic for are the to questions. about

comes Rick Thank first Instructions] Wise Stifel. [Operator Our from question you.

line is open. Your now

morning Andy, good morning a Good Bill on terrific fourth and quarter. congratulations really

be you me would high be more of or fourth thoughts a first any a the weaker sustainable year. much seasonal on us there? likely give picture perspective us great. how bigger into you Andy perspective talked with the quarter the dynamics Let your little mean, I start Is just -- about question. this is Can How to seasonally than level a couple -- again this, give going

quarters. year. last would ended And stronger call, successfully here. finish accounts could we the Yes, sure, the new account was I is There We've the know conference growth, we if building Rick. growth, I follow as with is look Actually strong growing. that, no it we we up to a very the what on a this, into the think path like, last prior the patient the success We've pleased new the listen, didn't interesting category said placing, we're period had holiday we're to very and having we've had what take go had. -- everything

provide our solid ramp what we we we footing than have future have any So provide I to actual just And guidance. building But that looks the a from think more guidance. yet. history still history understand and we're standpoint, when upon, happy can don't like which enough

XX So of finalized won't quarter even and then, you commercialization. month probably with fourth the

detailed us guidance giving You probably for more be won't XXXX.

history At this time have I I the enough year off predict need of history. enough think Rick, future is one to of. to don't

you. Got

there Turning Andy sales to what just being sales productive are some ahead. Clearly Can you clearly team. plans expansion. more gains are assume productive here, the I thoughts is is and about very about marketing updated thoughts initial the the your force, from your positive. talk that? further your experience team about that

sure. Yes,

I effective. more of -- and I the pilot we’ve which think been become a able optimize throughout we year, a to learn targeted, learning, lot more to then think from efficient more of lot programs

force more based patient they It we QX. appear that in day knowledgeable. we into every practice in the to the sales would have flow development impact those think I QX. Certainly saw managers begin becomes the force on sales good added that

I model. sustainable and encouraged quarter little think we're I more have every by, we’re more think confidence goes So repeatable that a we

specific think will I we'll think we the begin that so to the create the return extent any of at on or sales for And time. timing and in guidance force when I sense have this expand makes don't value financial that. But the appropriate it

Okay.

system went it one give to like a timelines is any a you. to taking us think quickly, out last and outlook from FDA care Can you a on obviously how need critical that you're one XXXX little data product. request quickly went perspective not? for flush to little by critical that navigation how possible it system. seems the do comments getting How is expeditiously, Thank do your what to navigation there? or going the critical on more of the Again just me, terrific Just you for by --

Rick. sure, Thanks. Yes,

performance we're selling strong pleased product. commercially demand. both believe is I interest first a be technical very offering think and today very a continue important; and continues with the that the strong to to I most we this be and product and there clinical of

is anything be currently been to in the unlike I think that or in performing market and it's encouraging. continues before the market that has

very product -- So if this and is generation not ever of first launched. it's as our

balloon essentially is us this for So third generation already. of

feel potential So ability about we it combine the No only excited not the I we're but navigation, think question into strongly. to for touch.

collect leverage it's data is have the of some data. don't as to clinical deployments. terms In data we intend to clock into balloon back review together some our We so start The deployment over. of commercial centers to the to quickly them. that was acute can rejection going a with have essentially our to on will provide more data, be volume not we as higher essentially hold response we and get rapidly It

deficiency additional primary information as previously, we I'm will As we've control to request going FDA FDA not again letter additional said answers questions. to predict the to timing their be. obtain mechanism the try the is don't timing But has and what you that to know or

finish congrats year. the on the and excellent for Thanks,

Rick. thanks, Yes,

Our next with from Kyle Genuity. Canaccord comes Instructions] [Operator Rose question

Your line open. is now

all Can right? much very questions. Thank the hear me Great. you taking everyone for

Kyle. Yes. Good morning,

Good morning, Kyle.

morning, Good gentlemen.

talked as how And were for you seasonality fair ricks that stocking standpoint. little So upside, think in the in want to of the a positive about Wanted strong QX as hats you a Did given bit into customer of try the QX, mean, in bit think as off or far the agreement flush from to potential to not QX? little about a should think that wanted stocking prepare the the potentially how the QX to QX as bit whether I we a that QX you kind Sono then in a the And or or out revolution bit in could Bello touched it's for QX slowdown close just far XXXX? should to and a to there push? as partnership far the QX of you little relationship we so maybe that if comments as for QX. see came I just to about echo you just any to the moving I on talk about about just see lot that on also just some little and

customer as they to we a but Kyle. to as very QX. Yes, start Bello were treat not meaningful they mentioned Sono but -- I'll they Sono started QX. patients, pleased, a they became with expected we've so were have in contribution Bello, We're

we’re thus partnership So very and pleased they with up treating far. the running, patients they are are

would In patients. last can't the patient terms back -- is and but fourth accounts the for I our I flow, comments we it of treat to half seasonality, comments quarter strongest look very predict to was QX Andy's very our to the and look didn’t QX our typically to and need continue strong we was what pleasantly we back know surprise going month were quarter. strongest quarter call like solid on conference like, or go of just quarter's what is

like So, can't I at in look we'll time. to be provide monitoring that's this, any this guidance you and point but what going

Okay.

the I TV which what just treating, ads timeframe sort to to on makes in have little only and the wasn't treated number weight would health Certainly have during add fourth -- the loss that think been wasn't number would that turn just I accounts to of ads. having us the right what counter we would have reticent Yes, off was seasonality maybe. literally course of revenues the It the it quarter. QX to I there is see surprised a most predict Kyle most number of of thing club and patients

encouraged, So place, year our this of with we in with we're quarter never accounts I think this we've accounts running. the been come and be through the but where in would first up

into And make the in you've lot sense. I a little bit direction, that you how in That's the to account going doing starting the utilization the fair, roll gave new and in right As into QX, moved high any -- reorder some just exceed account where utilization far the base? you QX finally more your just versus touch that to everything's as that or regions, utilization mean, understand in but are rates density you there we discernible the more regions QX and metrics of starts? mean, has other trends positive see translating accounts pattern are patients I a there I the just wanted the happen is through then on XXXX, as that seen trying in saw

Yes, what began again accounts order trying since is model tried us to again stocking we say a that this reorder upon I and would think utilization sustainable hit moving we're build and well I based simply the on. new make into think not creating thing we to

and comment and And still relatively don't or the perhaps lie nothing specific our some each QX median a still across I so, the still geographical QX number we're in to I fair It’s to any the really amount they trends tend think though trends, other. be approaches. of validate range right candidly specific and fairly that where we're of a metrics markets. can’t point of getting especially is mean There still and necessary begin -- limited have any wide the

and we we we trend do that utilization PDM more see within a our the drive the to beginning see making think becoming have little I impact think efficient to I the is role and accounts. sure

And in queue. lastly and hop I'll back

feels will are you it obviously be like Just one moving the tool powerful in year forward. registry a

that of to forward? wanted might we and expect moving start be see seeing Just inform when when will registry real data to that world able you better some metrics

Yes, I data we're out and that the figuring or think is form best to vehicle presented what have published.

rather pursuing I'm in a we scientific not by not out will history would prefer be. white do to And For than put has But marketing forum sure, that -- our presented been a valid the that sure we're clinicians we're best just simply that. that certainly paper. what meeting for

Congrats thank Great, very strong a you QX. much. on

Thanks, Kyle.

Thanks.

you. Thank

Our from next BTIG. question comes Ryan with Zimmerman

Your now line open. is

for guys hear you questions. okay? Can me the Thanks taking

Yes, Ryan. morning. Good

Ryan. morning, Good

force. the you've briefly Good on it year. strong various end morning. the Fully the amongst echo Andy on touched congrats of your sales sentiments roles just

those geographies account bit added a your think you roles opportunities more those backfilled utilization reps. sales You sales little additions if help infill roles about next that just some And with we hunting And through amongst talk type year. new support how maybe into to the or various other to on where the about should expand further haven't year? you I'm other those on wondering roles and could

five everybody's this that actually Yes, which just say the role. you know make months of experience course weight or and We're and and company a the launch product. with to novel through we're a that in new three importantly patients really sure fully anything and you granted and were pleased get launch the more losing as you reinforces is as product six have technology distinct effective implemented of like staffed I safe that anytime is manner product first really want specialist the for we you a only never roles. Because take that think

those So had The gain organically on ever. appeared the that patient QX QX work previously folks We flow. prospecting traction practice patient who begun in then as are is appears highest flow highest productive pleased contingent of Obviously course quarter executive qualifying who always the through account drive to [ph] that QX of AMs customers we you practices. targeting substantial with and to I to commented managers that be full. would manager have and new of the called pretty increase to and hand-in-hand to and to in our and number over utilization development hunters, we're and and refer

So England make reach it when essentially are I that model think I extent from. you to have territories. less And the we those like the more but New I absent financially is the just or your instance like we think to as to repeatable noted have, for model, pounder there question, does into expense think we geographies we'll begin we comment

the good appreciate a And the marketing to and little your bit pretty the in just I you've you've you've driven then and your really mean, there. media some had earlier color that good that want not funnel. year fills done. DTC if social of talk pipeline Okay, has that about metrics done

could social the the about half done Just the impact perspective on this the back media filling, your And a that of quarter? talk success that of if that the bit pipeline, year. little you're what of kind may you've from fourth been have through the you funnel promotions

Sure.

said, we've media interest I to and impact amazed media. of as be the potential and every social by think I the digital day continue

team is kind just I in The every us we anytime expertise any nice about think is social that our as indication an the we’d we that we that launch again metrics at immediate, We time any and is and as continue the the very more all we spend. have thing that outsource create do that how thing has product agency and a But before media launched that strong. is very feedback digital before, the have just or And efficient. allowed patient general out. I quarter year sharpen and quick to nice that to we media we'll about mentioned the The measured quarter talk the hire results make become the the to be question be in-house. overall don't doing think continues it to to decided I very very at top-line and say call, one I full our showed metrics were without interest almost level. targeted and continues be focus you would digital of finished campaign of the which exceptional high

this new quarter. mean, me trial, you them, this if account about sticks we think lastly with some the users ease know use then talked that's I was clearly out little Okay. And and was of past quarter had what best account with your product, you What new and that growth driving you physicians. mean, your a trends just dig can When I for of the over clinical the out stuck a your of the have account deeper. I it really clinicians talk to it resonated bit about just in mind success I

If you could pinpoint something?

to experience I offers -- didn't the them those product. at happy customers in events them convenience think had it outcomes accounts we it the increasingly that efficiently or pleased who one, Obalon to had of ease end so of practice. was think which think we incorporated the product adverse significant go use, I The system or make now, anecdotally it’s enables with this are they busy terms into was And I intolerance have any have I financial Ryan. talk their Well our from encouraging. patients from the of reactions, think have as because in that to them, hard the the But year,

forward. get existing about a I to are we momentum talk are to each accounts. is positive to some helping that's creating of new the sharing account think are I that's some managers executive acquisition. anything us within they successes I I now think But this take customers, to move now where it specialties we of and some and hard work getting are the the point their to away out customers experience to starting new organic want flowing for new from of don't sort their think in account starting momentum where of the now getting our

Thank for you the questions. taking guys

Thanks, Ryan.

time. questions further turn Thank any further showing you. I'm Mr. now call this for at remarks. like the to would I back Plovanic no to

Great, for this you participation. call, thank concludes your today’s

today's disconnect. Ladies have all great and program day. you gentlemen a in this conference, concludes you may today's thank for Everyone participating