Weight Loss in a Tablet Gadget Agency Allurion Heads to NYSE by way of SPAC Merger

Weight reduction merchandise are in sturdy demand proper now, and Allurion Applied sciences is capitalizing on that market urge for food with a deal that takes the corporate public and infuses it with $87 million to assist medical testing within the U.S. and commercialization of its expertise worldwide.

Allurion is merging with Compute Well being Acquisition Corp., a particular goal acquisition firm whose management consists of former Medtronic CEO Omar Ishrak. The deal introduced Thursday values the mixed entity at about $500 million. It should preserve the Allurion identify and be run by the Natick, Massachusetts-based firm’s administration workforce. When the merger closes within the coming months, Allurion’s shares will commerce on the New York Inventory Trade underneath the image “ALUR.”

Allurion has commercialized a gastric balloon within the type of a capsule. In contrast to conventional gastric balloons which are surgically implanted, Allurion’s gadget is supposed to be swallowed by the affected person underneath the steering of a clinician. The balloon inflates within the abdomen and is checked by X-ray to confirm its placement. Allurion says this outpatient process takes about quarter-hour.

The Allurion platform consists of software program that collects knowledge and screens a affected person. An app additionally offers sufferers with weight reduction steering by details about eating regimen, diet, sleep, and extra. Whereas the balloon is in place, sufferers develop new meals habits and alter to smaller portion sizes. After about 4 months, a valve opens and permits the balloon to empty and go out of the physique with waste. However the dietary and behavioral modifications {that a} affected person makes are hoped to final for much longer.

Allurion says greater than 100,000 sufferers have been handled by its expertise, which obtained the European CE Mark in 2015. The product has launched in Canada, Mexico, India, Australia, and Brazil. Allurion reported 2022 gross sales of $64 million, a 68.4% improve over the prior 12 months.

Within the U.S., Allurion initially sought FDA approval in 2020 based mostly on the outcomes of a medical trial that in contrast the balloon to a sham process. However that research missed one of many research objectives resulting from sham overperformance, in line with an investor presentation. The FDA requested for extra medical knowledge to assist longer remedy length and better efficacy. Allurion withdrew its utility. The Allurion expertise is now being evaluated in an open-label medical trial with a focused enrollment of about 1,000 sufferers who can be evaluated after 48 weeks. Outcomes from that research, which is evaluating the balloon and life-style remedy to life-style remedy alone, may assist one other FDA submission.

The proposed merger opens the door to a possible collaboration with Medtronic. In keeping with the investor presentation, Allurion’s balloon and digital platform could possibly be provided in weight reduction facilities coated by Medtronic’s bariatric surgical procedure channel. Folks could possibly be directed to both Medtronic’s providing or the Allurion expertise, relying on affected person suitability.

The merger agreement features a personal financing, led by RTW Investments, during which buyers will buy Allurion shares priced at $7.04 every. RTW Investments can also be offering artificial royalty financing, a mortgage during which repayments are decided by future income. In whole, these financings will present Allurion with at the very least $87 million.

Allurion was co-founded based in 2009 by Shantanu Gaur and Samuel Levy whereas they had been finding out at Harvard Medical College. Gaur is the corporate’s CEO, and he’ll proceed in that function following the merger. The businesses anticipate to finish the transaction within the first half of this 12 months.

“By combining our revolutionary Allurion Balloon with a digital platform and habits change program, we’ve got created the world’s first and solely full-stack weight reduction platform,” Gaur mentioned in a ready assertion. “We sit up for investing this capital to satisfy our mission.”

Photograph by Allurion Applied sciences