Allurion Technologies Inc (ALUR) Q1 2025 Earnings Call Highlights: Strategic Advances Amid ...

GuruFocus News

Thu, May 15, 2025, 1:12 AM 4 min read

Allurion Technologies Inc (NYSE:ALUR) achieved a first-quarter revenue of $5.6 million with a significant decrease in operating expenses by 45% compared to the previous year.
The company reported an expansion in gross margin to 75%, up from 73% in the prior year, indicating improved manufacturing efficiencies.
Allurion Technologies Inc (NYSE:ALUR) is making progress towards FDA approval for its balloon product, with a PMA submission expected by the end of June.
The company is implementing a new B2B2C commercial model, which has shown over 40% growth in pilot clinics in Europe, suggesting potential for global expansion.
Allurion Technologies Inc (NYSE:ALUR) has a strong cash position with $20 million in cash and equivalents, providing a runway for achieving key milestones such as FDA approval and profitability.

Negative Points

First-quarter revenue decreased from $9.4 million in the same period in 2024, primarily due to the temporary suspension of sales in France.
The company reported a net operating loss of $5.9 million, although this was an improvement from the previous year.
There is uncertainty around the timeline for the prospective trial of the combination therapy with GLP-1s, which could impact future revenue streams.
The restructuring initiatives, while improving efficiency, have led to reduced investments in sales and marketing, which may affect short-term growth.
The company faces challenges in achieving profitability for its ex-US business by the end of 2025, as outlined in their strategic plan.

Q & A Highlights

Warning! GuruFocus has detected 8 Warning Signs with ALUR.

Q: Can you provide insights into regional trends, particularly in the Middle East and Europe, with the new marketing strategy? A: We are seeing positive momentum with our B2B2C marketing strategy, especially in regions where GLP-1 markets are creating tailwinds. Patients who have tried GLP-1s are re-entering the funnel, and our focus on metabolically healthy weight loss is gaining traction. The expansion of our direct sales force in Europe is also contributing to growth, and we expect revenues to ramp up as the year progresses. Unidentified Executive

Q: What is the timeline and scope for the GLP-1 trial, and when can we expect data? A: We plan to begin enrollment in the latter half of this year, with a one-year follow-up. The study will involve at least 75 subjects across multiple sites in Europe. We are considering interim data looks and may increase the study size based on enrollment demand. Unidentified Executive

Q: Will the trial include different arms, such as the AI suite alone or in combination with the balloon and GLP-1s? A: The trial will focus on validating previous retrospective findings with a single-arm prospective design. We will use historical data for comparison, which will accelerate execution and make the study more efficient, aligning with our goal of accelerating profitability. Unidentified Executive

Q: Can you comment on the gross margin improvements and expectations for the rest of the year? A: The margin expansion in Q1 was due to restructuring and increased manufacturing efficiency. We expect margins to remain in the same ballpark throughout the year, with potential improvements as revenues ramp up in the second half. Unidentified Executive

Q: What are the next steps following the pre-PMA meeting with the FDA, and what analyses are being conducted? A: We were pleased with the FDA meeting and discussed alternative methods for analyzing control group data, which should strengthen our position. We aim to complete our clinical study report and module submission by mid-year, with a more accurate representation of control group performance. Unidentified Executive

Q: Are there any plans for an expanded label or is the focus on commercial implications of the prospective study? A: In the short term, the focus is on commercial implications and providing physicians with validation for the combination therapy. Long-term, the data could support discussions with regulators and payers about the benefits of combination therapy, including improved clinical outcomes and cost-effectiveness. Unidentified Executive

Q: How is procedure growth trending, particularly outside France, and are tariffs impacting procedures? A: Procedure growth is stable, with some regions showing growth and others recovering from earlier marketing strategies. We expect placements in France to resume in the second half of the year. Tariffs have not materially impacted procedures or gross margins. Unidentified Executive

Q: When do you expect the AI-powered virtual care suite to contribute materially to revenue? A: While the virtual care suite is gaining traction overseas, we anticipate the U.S. market will drive significant revenue growth, especially when combined with our ability to prescribe GLP-1s. We do not expect material contributions this year or early next year, but it should become more meaningful as we ramp up in the U.S. Unidentified Executive

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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