On October 7, 2021 Apollo Endosurgery, Inc. ("Apollo") (NASDAQ:APEN), a global leader in less invasive medical devices for gastrointestinal and bariatric procedures, reported that preliminary unaudited financial results and corporate updates for the third quarter ended September 30, 2021, including anticipated revenue in the range of $16.0 million to $16.4 million and anticipated revenue growth in the range of 25% to 28% compared to third quarter 2020 (Press release, Apollo Endosurgery, OCT 7, 2021, View Source [SID1234591010]).
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Preliminary, Unaudited Third Quarter 2021 Financial Results
"We continue to successfully deliver against the priorities that we committed to early this year: specifically, to energize our business and drive near-term growth while laying the foundation for additional large-scale opportunities," said Chas McKhann, president and CEO. "Our recent De Novo 510(k) classification request for Apollo ESG and Apollo REVISE is an important, critical milestone for the company, and I am extremely proud of the work our clinical and regulatory teams have done to get us to this point. We believe we are well-positioned to become a leader in therapeutic endoscopy through continued execution on both our commercial and clinical initiatives. I’m excited about the bright future ahead for Apollo."
Anticipated revenue growth in the third quarter was led by the company’s endoscopic suturing (ESS) portfolio, which grew between 31% and 33% over the same period in 2020, highlighting continued demand for Apollo’s OverStitch and X-Tack products across a range of patient indications. Anticipated intragastric balloon (IGB) revenue increased by 19% to 21% despite a stronger-than-expected rebound in elective procedures for the ORBERA balloon in the prior year third quarter.
Apollo estimates that it had approximately $28 million in cash, cash equivalents, and restricted cash at September 30, 2021.
The company expects to announce third quarter final financial and operating results on November 1, 2021, after market close.
De Novo 510(k) Classification Request Submitted for Apollo ESG and Apollo REVISE
Apollo announced that it has submitted a De Novo classification request to the U.S. Food and Drug Administration (FDA) seeking 510(k) classification and clearance for the Apollo ESG and Apollo REVISE devices, which consist of the OverStitch Endoscopic Suturing System and related components (e.g., tissue helix, sutures, cinches). Apollo ESG is intended for use in the endoscopic sleeve gastroplasty procedure for weight loss and Apollo REVISE is intended for use in revision of bariatric surgery procedures. This submission follows recent announcements made during the Surgical Disruptive Technologies Summit by the principal investigators of the MERIT study (Multi-Center ESG Randomized Interventional Trial), that, based upon a preliminary analysis, the trial had met its primary endpoints for safety and efficacy.
The De Novo Classification Process is available to medical devices of low-to-moderate risk that do not have a legally marketed predicate device. Actual timing for the De Novo 510(k) process varies. The company currently expects a decision from the FDA within approximately 12 months.
2021 Financial Outlook
Based on results in the first three quarters of 2021, the company is updating its revenue guidance for the full year 2021 to between $63 and $64 million, which represents growth of 50% to 52% over 2020.
Apollo continues to monitor the potential and uncertain impact of the ongoing COVID-19 pandemic. Should hospitals or outpatient centers where the company’s procedures are performed experience continued or additional surges in cases and need to defer elective procedures to preserve capacity for COVID-19 patients, the company’s ability to achieve these financial projections could be adversely affected.
About the MERIT Study
The MERIT study (NCT03406975, FDA IDE G190189) is a multi-center, prospective randomized clinical trial evaluating the safety and effectiveness of the ESG procedure, a minimally invasive, endoscopic weight loss procedure performed with Apollo Endosurgery’s OverStitch Endoscopic Suturing System compared to a medically monitored regimen of diet and healthy lifestyle. The co-principal investigators are Dr. Erik Wilson, University of Texas at Houston (Houston, TX), and Dr. Barham Abu Dayyeh, Mayo Clinic, (Rochester, MN) under a collaborative research agreement sponsored by Apollo Endosurgery. The study’s primary efficacy endpoint is to achieve at least 25% excess body weight loss (%EBWL) at 12 months and at least 15% EBWL vs. control at 12 months, and the primary safety endpoint is a serious adverse event rate of less than 5%. Additionally, patients undergoing ESG are being evaluated for improvement in hypertension and type 2 diabetes at 24 months.
The MERIT study investigators submitted an abstract to the International Federation for the Surgery of Obesity and Metabolic Disorders (IFSO). The company anticipates that the MERIT investigators will present the study’s primary efficacy and safety endpoints in a global, virtual session entitled the "Top 10 Papers at IFSO" on Friday, October 22, 2021. The company anticipates that the full MERIT study results, including patient follow-up to two years, will be published in the first half of 2022.