Obalon Therapeutics is making its stock market debut with an IPO of $75 million to fuel U.S. commercialization of its weight loss balloon device.
The product launch comes a few weeks after Obalon registered for an IPO and revealed that it won the FDA’s PMA approval for its ingestible weight loss balloon. The device enters the body through a swallowed capsule and fills up with gas once it reaches the stomach, helping curb patients’ appetites.
Obalon was already selling a 3-month version of the device in the EU, Mexico and Middle East. But the company last year decided to switch gears and only sell the balloon in the Middle East to prepare for a U.S. launch.
“Having received PMA approval for the Obalon balloon system, we are currently focused on commencing U.S. commercialization using a direct sales force, which we anticipate will occur in early 2017,” the company said in its September filing.
The company initially plans to market its balloon to bariatric surgeons and gastroenterologists with weight loss practices. But Obalon also has its eye on other specialties such as plastic surgery, it said.
Meanwhile, Obalon continues to rope in funding to support R&D. In January 2015, the company raised $30 million including $20 million in Series D financing and a $10 million term loan.
The company used the funds to complete a 387-patient Smart pivotal trial aimed at PMA approval for its weight loss balloon. Patients treated with Obalon's balloon lost twice as much weight as patients in the sham arm, and also experienced fewer serious side effects, the study showed.
The San Diego-based company is offering 5 million shares at $15 per share and plans to trade on the NASDAQ. UBS Investment Bank, Canaccord Genuity and Stifel are joint book-running managers on the offering and BTIG is a co-manager, Obalon said in a statement.
Obalon shares were flat on its first day of trading.