- Simplifies capital structure through prepayment of existing
term loan
- Reduces annual interest expense, providing increased near-term
cash flow and operational flexibility
- Extends expected cash runway in advance of AUDACITY FDA trial
read-out
- Strengthens long-term partnership with RTW Investments
Allurion Technologies, Inc. (NYSE: ALUR) (“Allurion” or the
“Company”), a company dedicated to ending obesity, today announced
the closing of a $48 million convertible senior secured note
financing with certain entities managed by RTW Investments, LP
(“RTW”). Proceeds will be used to repay in full the Company’s
obligations under its existing term loan with Fortress Credit
Corp., reducing the Company’s interest expense and increasing
operational flexibility.
Management anticipates this transaction will better position the
business for the future. Of note, the convertible notes reduce the
interest rate on the Company’s debt to 6%, lengthen the maturity
over Allurion’s existing term loan by nearly four years, from June
2027 to April 2031, and allow for interest payments to be made
in-kind for the first three years. The net benefit of these
changes, together with the amended terms of Allurion’s existing
Royalty Interest Financing Agreement with RTW, extends the
Company’s expected cash runway in advance of the AUDACITY FDA trial
read-out, which is anticipated by year-end.
"RTW’s investment underscores our shared belief in the long-term
potential of the Allurion Program,” said Dr. Shantanu Gaur, Founder
and CEO of Allurion. “Our impressive clinical results and continued
growth in procedural volume in our foreign markets give us
confidence that Allurion will be a significant player in obesity
management. The investment furthers our long-term partnership with
RTW and provides us additional flexibility to achieve our long-term
goals,” Dr. Gaur continued.
“We are pleased to strengthen our relationship with Allurion as
it continues its mission to end obesity around the world. The
Allurion Program is a proven weight-loss method, and we eagerly
await the results of its U.S. FDA trial,” said Roderick Wong, M.D.,
Managing Partner and Chief Investment Officer of RTW Investments,
LP.
About the Notes
The notes bear interest at the rate of 6% per annum, with the
Company’s option to pay interest in kind for the first three years,
and mature on April 16, 2031. The notes may be converted at the
option of the noteholders into common stock of Allurion, subject to
certain conditions and limitations, at a 35% conversion premium to
the lower of (i) the 30-day VWAP at signing and (ii) the price per
share in the Company’s next equity offering. The Company has agreed
to customary registration rights with respect to the shares of
common stock issuable upon conversion of the notes. The notes may
be redeemed by Allurion at its option under certain circumstances
following the fourth anniversary of the date of issuance.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy the securities described herein,
nor shall there be any sale of these securities in any state or
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of such jurisdiction.
Additional information about the notes and the terms of the note
purchase agreement will be filed with the U.S. Securities and
Exchange Commission (the “SEC”) and will be available on the SEC’s
website at www.sec.gov.
About Allurion
Allurion is dedicated to ending obesity. The Allurion Program is
a weight loss platform that features the Allurion Gastric Balloon,
the world’s first and only swallowable, procedure-less intragastric
balloon for weight loss, and offers access to the Allurion Virtual
Care Suite, including the Allurion Mobile App for consumers,
Allurion Insights for health care providers featuring the Coach
Iris AI Platform, and the Allurion Connected Scale. The Allurion
Virtual Care Suite is also available to providers separately from
the Allurion Program to help customize, monitor and manage weight
loss therapy for patients regardless of their treatment plan:
gastric balloon, surgical, medical or nutritional. The Allurion
Gastric Balloon is an investigational device in the United
States.
For more information about Allurion and the Allurion Virtual
Care Suite, please visit www.allurion.com
Allurion is a trademark of Allurion Technologies, Inc. in the
United States and countries around the world.
About RTW
RTW Investments, LP is a global, full life-cycle investment firm
and company builder that focuses on identifying transformational
and disruptive innovations across the biopharmaceutical and medical
technologies sectors. As a leading partner of industry and
academia, RTW combines deep scientific expertise with a
solution-oriented investment approach to support emerging medical
therapies and the companies and/or academics developing them.
Forward-Looking Statements
This press release may contain certain forward-looking
statements within the meaning of the U.S. federal and state
securities laws. These forward-looking statements generally are
identified by the words “believe,” “project,” “expect,”
“anticipate,” “estimate,” “intend,” “strategy,” “future,”
“opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,”
“will continue,” “will likely result,” and similar expressions and
include statements regarding the simplification of Allurion’s
capital structure, availability of cash runway, operational
flexibility, procedure growth, Allurion’s expectations for, and
market acceptance of, the Allurion Program, and Allurion’s ability
to compete with other weight loss products, improve its market
position, scale its business and achieve long-term goals.
Forward-looking statements are predictions, projections and other
statements about future events that reflect the current beliefs and
assumptions of Allurion’s management based on information currently
available to them and, as a result, are subject to risks and
uncertainties. Many factors could cause actual future results or
developments to differ materially from the forward-looking
statements in this communication, including but not limited to (i)
the ability of Allurion to obtain and maintain regulatory approvals
for and successfully commercialize the Allurion Program, including
the Allurion Balloon and the Allurion Virtual Care Suite (“VCS”),
(ii) the timing of, and results from, our clinical studies and
trials, (iii) the evolution of the markets in which Allurion
competes, (iv) the ability of Allurion to defend its intellectual
property, (v) the impact of the COVID-19 pandemic, the Russia and
Ukraine war, and the Israel-Hamas conflict on Allurion’s business,
(vi) Allurion’s expectations regarding its market opportunities,
including those for the VCS platform, (vii) the risk of economic
downturns and a changing regulatory landscape in the highly
competitive industry in which Allurion operates, and (viii) the
ability of Allurion to comply with the covenants and terms and
conditions of the note purchase agreement. The foregoing list of
factors is not exhaustive. You should carefully consider the
foregoing factors and the other risks and uncertainties described
in the “Risk Factors” section of Allurion’s Annual Report on Form
10-K filed on March 26, 2024 and other documents filed by Allurion
from time to time with the SEC. These filings identify and address
other important risks and uncertainties that could cause actual
events and results to differ materially from those contained in the
forward-looking statements. Forward-looking statements speak only
as of the date they are made. Readers are cautioned not to put
undue reliance on forward-looking statements, and Allurion assumes
no obligation and does not intend to update or revise these
forward-looking statements, whether as a result of new information,
future events, or otherwise. Allurion does not give any assurance
that it will achieve its expectations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240417667976/en/
Global Media: Cedric Damour, PR Manager Allurion
Technologies, Inc. +33 7 84 21 02 20 cdamour@allurion.com
Investors Mike Cavanaugh, Investor Relations ICR
Westwicke +1 617 877-9641 mike.cavanaugh@westwicke.com
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