Vyome Holdings, Inc. Q3 FY2023 earnings call

• Cost reductions: Implemented approximately $8 million in cost reductions by November 1, 2023, including reduction in force, pause of Reshape care program, and compensation cuts. Core operating expense reductions between 2022 and 2024 are estimated at $22 million or 70%.
• Product pipeline: Filed PMA supplement with FDA for Lap-Band 2.0 Flex, expecting FDA approval by year end or early 2024. Signed exclusive license agreement with Biorad for Obalon Gastric Balloon System in Asian territories.
• Digital initiatives: Improved digital lead generation and patient engagement campaign with AI SMS patient self-service technology to enhance patient intake and volume.
• Scientific Advisory Board: Work closely with SAB to develop launch strategy for Lap-Band 2.0 Flex and market weight-loss solutions.

For the third quarter ended September 30, 2023, revenue totaled $2.2 million, a decrease of $600,000 compared to the same period in 2022. Gross profit was $1.3 million, down from $2.1 million in 2022. Sales and marketing expenses decreased by $800,000 to $1.8 million, general and administrative expenses decreased by $1.7 million to $2.1 million. The Lap-Band system is a key product, and the company has an exclusive royalty-bearing license agreement with Biorad for the Obalon Gastric Balloon System in certain Asian territories.

• Anticipate revenues increasing in 2024 with continued reduction in operating expenses.
• Expect FDA approval for Lap-Band 2.0 Flex late 2023 or early 2024, which will contribute to increased sales going forward.
• Aim to increase Lap-Band procedures and revenue through marketing automation, improved website, and frictionless booking system.

• Impact of GLP-1 adoption on revenue, as growing popularity of GLP-1 drugs for weight loss has decreased sales volume of Lap-Band products.
• Regulatory risks related to FDA approval of new products like Lap-Band 2.0 Flex.
• Competition from other weight-loss treatments and medical devices in the obesity market.

Q: What is the timeline for the impact of GLP-1 adoption on bariatric surgery procedures and when will the effects start to be seen?

A: Dr. Apovian mentioned there is a backlog of patients due to limited obesity medicine specialists and prior authorization issues, but over time, patients who plateau or have issues with GLP-1 accessibility may consider bariatric surgery. Paul Hickey noted a center in Louisville is seeing year-over-year Lap-Band procedural growth despite GLP-1 pressures.

Q: What are the expectations for the Obalon Gastric Balloon System license agreement with Biorad?

A: Paul Hickey stated Bio-Rad has aggressive goals, with project kickoff and teams engaging in meetings. While aiming for progress this year, initial production and verification may push it into early 2024. Both sides are eager to get the product produced and verified for global quality standards.

Q: Will there be one-time charges in the fourth quarter related to the $8 million cost reductions?

A: Michael Miller indicated no big charges expected in Q4, but there may be some one-time severance costs related to reduction in force, which will be accrued during Q4.