Obalon Therapeutics, Inc. (OBLN) stock prices skyrocketed by 30.45% as of the market closing on May 10th, 2021, bringing the price per share up to USD$2.87 at the end of the trading day.
OBLN’s Merger with ReShape
November 10th, 2020 saw the pioneer of the FDA-approved balloon system for obesity treatment announce that it had signed into a non-binding term sheet to merge with ReShape Lifesciences, Inc. A definitive agreement was signed into on January 19th, 2021 for OBLN’s merger with ReShape Lifesciences.
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Revenues and Net Loss
Fourth-quarter revenues for the fiscal year 2020 were reporte at USD$0.1 million, down from the UDS$0.8 million reported for the same time period of the previous year. The decrease is primarily attributable to the indefinite suspension of operations in the second quarter of the fiscal year 2020. Net loss for Q4 2020 was reported at USD$1.3 million down from the USD$4.9 million reporte in the fourth quarter of 2019. Net loss per share for Q4 2020 was USD40.17, a vast improvement on the USD$.64 net loss per share reorted for Q4 2019.
Expenses and Gross Profits
The fourth quarter of the fiscal year 2020 saw OBLN fail to report any cost of revenue, whereas Q4 2019 had reported USD$0.6 million in expenses derived from the generation of revenue. Gross profits were down to USD$0.01 million in Q4 2020 as compared to the USD$0.2 million reported in the fourth quarter of the fiscal year 2019.
R&D and Peripheral Costs
Research and Development costs for the last quarter of 2020 were USD$0.2 million, down from the USD$1.5 million reported in the fourth quarter of the year prior. Selling, General, and Administrative costs were also down, from USD$3.6 million in Q4 2019 to USD$1.2 million in the fourth quarter of 2020. Operating loss for Q4 2020 was USD$1.4 million, down from USD$5 million in Q4 2019.
Solid Liquidity Position
OBLN reported having cash and cash equivalents in the amount of USD$3.9 million as of December 31st, 2020. With the ravaging of global economies by the prolonged Covid-19 pandemic, the U.S. government launched its Payroll Protection Program which serves to safeguard employment rates by subsidizing payroll costs. OBLN took advantage of this program and, consequently, had USD$0.4 million in debt related to its PPP loan.
Future Outlook for OBLN
As economies start to slowly recover from the attritional damaged incurred since the onset of the global pandemic, OBLN has focused on staying afloat while strategizing for future profitability in a post-pandemic market. Having shown improvement in some key areas across their financial reports, the company is poised to leverage its solid liquidity position to usher in sustained and significant increases in shareholder value.
