Obalon Says Cash Crunch Could Push Company Into Bankruptcy >OBLN
8:46 am ET June 19, 2020 (Dow Jones) Print
By Colin Kellaher
Obalon Therapeutics Inc. on Friday warned that it may need to liquidate or seek bankruptcy protection amid dwindling resources.
The Carlsbad, Calif., company, which develops medical devices to treat obesity, said it only has enough cash and equivalents on hand to fund its operations through the end of the year and that it has thus far been unable to identify a viable alternative for capital raising.
Obalon in March closed its two retail treatment centers and halted manufacturing operations amid disruptions sparked by the coronavirus pandemic.
The company on Friday said that due to significant concerns about an economic recovery and the fact that its Obalon Balloon System isn't currently covered by any kind of private or public health insurance, it doesn't currently plan to reopen the treatment centers or to ship orders to U.S. customers or its former international distributor.
As a result, Obalon said it doesn't expect to report any meaningful revenue for the foreseeable future.
Obalon said it will continue to explore its strategic alternatives and to seek third-party coverage and reimbursement for its product. It said that if it isn't successful in those efforts, it may need to sell or liquidate all or part of its business or file for bankruptcy protection.
Shares of Obalon, which closed Thursday at $1.07, fell 20% to 86 cents in premarket trading Friday.
Write to Colin Kellaher at colin.kellaher@wsj.com
(END) Dow Jones Newswires
June 19, 2020 08:46 ET (12:46 GMT)
saving nickels saving dimes
working till the sun don't shine
looking forward to happier times
1963, Roy Orbison - On Blue Bayou
