Vyome Holdings, Inc. Q2 FY2023 earnings call

Paul Hickey outlined ReShape's three growth pillars: 1) Disciplined metrics-driven approach to drive predictable revenue expansion. 2) Expand product portfolio and pipeline across the care continuum. 3) Validate evidence-based weight loss solutions with the Scientific Advisory Board. In Q2, ReShape submitted a PMA supplement application to the FDA for Lap-Band 2.0, continued progress with the ReShapeCare virtual health and wellness program, and held the first meeting with the Scientific Advisory Board. Dr. Christine Ren-Fielding provided insights on GLP-1 drugs in obesity treatment, noting their efficacy but also limitations such as cost, supply issues, and side effects, and how they lead patients to consider bariatric surgery like Lap-Band.

For the second quarter ended June 30, 2023, ReShape Lifesciences reported revenue of $2.3 million, a decrease of $600,000 compared to the second quarter of 2022. Gross profit was $1.2 million in the second quarter of 2023, down from $1.9 million in the same period of 2022. Gross profit as a percentage of total revenue was 53% in Q2 2023 compared to 65% in Q2 2022. Operating expenses were reduced by 53% in Q2 2023 compared to Q2 2022, with an $8.4 million reduction in the first half of 2023 compared to the first half of 2022, and an additional $4 million in annualized savings expected starting in July 2023.

ReShape anticipates that efforts in the second half of 2023, including targeted digital media campaigns near bariatric surgical centers and rollout of the Hive platform, will drive revenue growth. The company expects continued reduction in operating expenses and moving closer to cash flow breakeven as they invest in growth strategies.

Risks include supply chain issues and side effects associated with GLP-1 drugs, potential delays in FDA approval of Lap-Band 2.0, and the short-term potential delay of surgical consults due to GLP-1 adoption, though long-term GLP-1 use is expected to drive more patients to bariatric surgery.

Q: Anthony Vendetti asked Dr. Christine Ren-Fielding about side effects of GLP-1 drugs, including brain swelling, and if GLP-1s can be used with Lap-Band surgery.

A: Dr. Ren-Fielding responded that brain swelling is not a known side effect of GLP-1s and that GLP-1s can be used in conjunction with Lap-Band surgery. Paul Hickey added on the benefits of weight loss and the importance of addressing obesity-related comorbidities.

Q: Anthony Vendetti also asked about the timeline for Lap-Band 2.0 approval.

A: Paul Hickey stated that ReShape submitted the PMA supplement in June, expects FDA interaction to ramp up over the next several months, and anticipates approval by the end of 2023 or early 2024 at the latest.