Good afternoon, and welcome to the last session of Oppenheimer's 34th Annual Healthcare Conference. I'm Shaymus Contorno from the MedTech Research Team. Last but not least, we're happy to have Shantanu Gaur, co-founder and CEO of Allurion, for a presentation followed by some brief Q&A. Shantanu, over to you. Thank you very much, Shaymus. Thanks for having me. I'm looking forward to presenting Allurion to all of you today. A little bit of background on myself: I founded Allurion back in 2009, actually when I was a medical student at Harvard Medical School, having gotten very interested in obesity and metabolic disease and all things related to weight loss, and started Allurion to develop programs and experiences that deliver weight loss, without the procedures, without the invasiveness of surgical intervention, and without the systemic side effects that often arise from weight loss drug therapy. Many of you are probably familiar with how the weight loss space has exploded over the past few years with the rise of GLP-1s. This is a market opportunity in terms of revenue by 2030, with estimates of between $50 billion-$100 billion. But there are a lot of issues and challenges with the GLP-1 therapy that Allurion can really capitalize on. The first is these drugs require a weekly injection and have a very high churn rate. Two-thirds of patients who start a GLP-1 will actually stop within the first year. With longer-term use, there are potential issues with certain cancers and neoplasms and also pretty severe GI-adverse events, including small bowel obstruction. Obviously, the cost is a major issue here in the U.S. but also all over the world. At price points of over $1,000 a month, these drugs are more or less outside the average middle-class consumer. And finally, what's gotten a lot more press recently is that a significant portion, almost 40%, of the weight that is lost with these drugs comes from muscle mass. Of course, once you stop taking these drugs, the weight really comes right back on. These are all challenges and issues that are well-known in the GLP-1 space now and challenges that Allurion can really capitalize on with the weight loss program that we've developed. The same challenges really come to the fore for devices that require endoscopy or anesthesia that are intended for weight loss and also surgical approaches for weight loss. There's obviously a poor experience related to those procedures, high risks related to those procedures. Anything that requires endoscopy or anesthesia or surgery is going to come with a big price tag. From a commercialization standpoint, when you are selling a device or a surgical approach that requires a highly skilled surgeon or gastroenterologist, it's going to limit the number of channels that you can sell into, which will really limit the scalability of that underlying business. At Allurion, we've solved these challenges and issues with the Allurion Program. At the heart of the Allurion Program is the Allurion Balloon, and it is the world's first and only procedureless weight loss device. The balloon is deployed in a 15 minute outpatient office visit without any sedation, with no endoscopy, and no surgery. The balloon comes in a capsule. You can see it in the camera here. It's about the size of a fish oil capsule attached to a very thin tube. And you swallow the capsule; it goes down into the stomach. The balloon is filled through the tube, through this end of the tube, hooked up to a bag of water, which we provide. Filling takes about five minutes. And when you're done filling, you just remove the tube from the patient's mouth, and you end up with a 0.5 liter sized balloon inside the stomach that takes up space and immediately leads to satiety and a sense of fullness. The balloon remains in the stomach for four months. And after four months, there's a patented release valve that's now covered by over 50 patents that opens up on its own. The balloon empties out and passes out of the body. So a 15 minute office to get the balloon, and then four months later, the balloon disappears, out of the patient's body. And as you can imagine, when you take the procedures out of the equation, there's no surgery, endoscopy, or anesthesia. It becomes a much safer experience for the patient, and also a much more tolerable one. Our balloon is actually made from very thin polyurethane that's very smooth and very gentle on the stomach lining. Unlike historical intragastric balloons that were made from thick silicone that could be abrasive on the stomach lining, our balloon has a much lower rate of intolerance. We've already treated over 130,000 patients with the balloon around the world and have done so with a cash-pay go-to-market strategy. But we're beginning to see some green shoots when it comes to reimbursement. We recently treated our very first patients in the U.K. outside of the private sector in the public sector in the NHS, fully funded and reimbursed by the NHS. Here in the United States, the balloon is going through our FDA pivotal study called the AUDACITY trial, which fully enrolled in October 2023, with top-line data expected at the end of this year. We've already begun conversations with payers and potential partners in the U.S. to help accelerate our launch in the U.S. market. The effectiveness of the Allurion Balloon in terms of weight loss is supported by a number of clinical studies and clinical trials. With one balloon cycle, our patients will lose approximately 14% of their total body weight after just four months. And this data comes from a very large study, in fact, the largest study ever done on intragastric balloons, looking at patients from all over the world, going through the Allurion Program. Importantly, one year after the balloon has left the body, our patients will keep 96% of that weight off. This is really a testament to the long-lasting behavior change that's enabled by our digital platform and our Virtual Care Suite, which comes with the balloon and is designed to change a patient's behavior and lifestyle so that they can actually keep the weight off in the long run. For patients at higher BMIs who need to lose additional weight, they can go through a second balloon cycle. And with that second balloon cycle, in total, patients are losing over 20% of their total body weight loss, extremely effective for patients who are considering bariatric surgery or considering one of the more potent GLP-1 drugs. A second balloon cycle is a fantastic alternative to those approaches. And our effectiveness isn't just measured in terms of pounds lost. It also extends into obesity-related comorbidities like diabetes. This data is from a study of in total 518 patients, 225 of whom had Type 2 diabetes, where in just four months on the Allurion Program, their A1c comes down into the normal range, effectively putting their diabetes into remission. Similarly, for the 293 prediabetics in this study, they lost almost a point of A1c, again bringing their A1c down to the normal range, putting their prediabetes into remission. There's no shortage of unmet need here in the diabetes space. Approximately 100 million Americans have prediabetes, and an additional 38 million have Type 2 diabetes. It's one of the biggest unmet needs in the world, related to this underlying issue of obesity. And with the rise of the GLP-1s, we've actually seen the potential for some real long-term tailwinds for our business. When we survey our providers who are actually administering the Allurion Balloon, 45% of them remark that the anti-obesity medications, these new GLP-1s, have actually boosted awareness and interest in the Allurion Program. Approximately a third of our patients have actually tried a GLP-1 prior to getting the Allurion Balloon. So clearly, there's a bit of an ecosystem that's coming to life where patients are interested in losing weight. They may try a GLP-1 or learn about GLP-1s and then end up getting a therapy like the Allurion Program because of all the benefits that it has, over lifelong drug therapy. At the same time, we're seeing organically in the marketplace and in clinical settings our balloon being combined with GLP-1 drugs. We presented data recently showing that when a patient takes a GLP-1 drug with the Allurion Balloon, and this was an early-generation GLP-1, they can actually lose additional weight, during that four month period, 17.6% instead of 14% with the Balloon alone. And if you actually start a GLP-1 after the Balloon is gone, you can continue to lose weight even in absence of the Balloon, which will further enhance our long-term weight maintenance data. So this is another tailwind for us in the long run where for patients who, need to use a lower dose of GLP-1 or patients who are looking to lose significant, amounts of weight, combining the Balloon with the drugs, seems to be a very attractive option for patients and providers. I mentioned this earlier, but I think it bears repeating that we are not just selling a Balloon. We are selling a weight loss program, an entire experience, to patients. At the heart of it is our balloon. But the day that a patient gets the balloon, they also go home with our Bluetooth scale, and they download our mobile app. And through the Allurion app, they actually receive our behavior change program. It's something we designed in-house, both the digital platform and our behavior change program, featuring over 150 modules of content related to healthy eating, nutrition, exercise, sleep, mental health, all of the aspects of your lifestyle that need to be improved as you go through a weight loss journey. And that behavior change program is delivered at scale through our app. So from a patient perspective, they're interacting with all of this content, through our app. They're able to message their dietitian. They're able to do telehealth visits with their dietitian, as they go through their weight loss journey. But also for the providers, we have the Virtual Care Suite, which is a remote monitoring platform that tracks all of their patients in real time. And we have a layer of machine learning and artificial intelligence sitting on top of all of that data, literally millions of data points, that's constantly combing through this patient data, identifying any patients who may not be at who may be at risk of a less than optimal outcome from a weight loss perspective. Those patients are flagged for providers to take further intervention, so that quite literally our hope is that no patient really falls through the cracks here, that everyone has a shot at reaching their ideal body weight. Last year, we also rolled out a new feature on the Allurion App, which is called Coach Iris. This is a 24/7 AI-powered weight loss coach, using the same technology that underlies ChatGPT, but a large language model that we've actually fine-tuned in-house at Allurion to remain within the confines of our behavior change program so that this coach, which is on 24/7, can answer questions in a much more evidence-based manner than ChatGPT and align with our philosophies around behavior change that we know can generate fantastic outcomes for our patients and alleviate the need for providers to spend inordinate amounts of times answering patient inquiries. The digital side of our offering has really shown signs of increasing engagement and the ability to lead to better outcomes. In 2023, we had over 4 million in-app sessions on our app all over the world. When you actually ask our providers, who are using the Virtual Care Suite to manage their patients at a practice level, they report increased patient engagement, increased accountability, increased efficiencies in their practice, the ability to see more patients with fewer resources because of things like Coach Iris that are handling some of those first-level and second-level patient inquiries. Then when we look at our data on the back end, looking at the clinics who use the Virtual Care Suite the most, we actually see those clinics achieving higher weight loss results, more patients who are reaching their weight loss goals, and a higher patient satisfaction score. So the digital part of our program is actually instrumental in turbocharging the results of the balloon, but also creating that experience that allows patients to walk away afterwards with a better shot at weight maintenance and also increased levels of satisfaction. What we found is that the Virtual Care Suite can actually be a powerful tool for providers who are prescribing GLP-1 drugs and doing bariatric surgery in their practice. One commercialization opportunity that we've identified with the Virtual Care Suite is actually making it available to practices as a SaaS product, software as a service product, extremely high-margin recurring revenue for Allurion, but a software solution that actually offers providers the ability to manage their practices at scale while doing GLP-1 drugs, bariatric surgery, and the Allurion Balloon. In January 2024, we announced commercial agreements with three of the largest weight loss centers and chains throughout Europe. These chains have multiple locations and are using our software and our behavior change program to manage all of their patients. These chains offer GLP-1 drugs, bariatric surgery, and the Allurion Balloon. And I believe that this could be a real green shoot for Allurion in the future as a source of extremely high-margin recurring revenue, leveraging all of the software and behavior change know-how that we've built for the balloon to these fast-growing segments of GLP-1 drug therapy and bariatric surgery. Looking a bit to the future now, building on 2023, where we saw an increase in procedural volume of 30%. As I mentioned earlier, a real increase in engagement on our digital platform. 2023 was a year where we really cemented our clinical data, publishing and presenting a number of different studies which validate our 14% total body weight loss and long-term weight maintenance. We, in 2024, are going to be leveraging our 77% gross margin to further improve our cost structure, get to a clear path to profitability, and chalk out that path to get from 77% to over 80% gross margin, while improving efficiencies along the way. We also see some catalysts related to expansion of our digital platform, which I just reviewed with regards to our SaaS business. We also have our AUDACITY trial readout, top-line results expected by the end of this year. These are major catalysts for our business, and not to mention, our existing base business all over the world outside the United States, which continues to grow and allows us to leverage all of that infrastructure that we have built and all of that know-how to enter one day the U.S. market. And our hope there is we get off to a very fast start in the United States by leveraging all of the know-how that we've built outside. So in 2024, we are forecasting 20% procedural volume growth, approximately $60 million to $65 million of top-line revenue. And that's really going to be driven by prioritizing investments in our key growth areas, in our direct markets, where we've seen consistent growth in procedural volume, and also making investments in our digital platform, having it stand, begin to stand on its own two feet, as a a separate product generating its own revenue. And looking a little bit more granularly at 2024, going into 2024, after having gone public in August of last year, we launched several initiatives to bring in our cash burn to, on average, $7 million to $8 million per quarter or approximately $30 million for the full year in 2024. We have several initiatives ongoing to maintain our gross margin of 77% and potentially grow it to 78% to 79% in 2024. And we've shifted around our marketing spend to allocate that spend towards high-growth areas that are high-margin and much more efficient, especially in light of the prominence of GLP-1s. We've been able to allocate more resources towards markets where we have a clear and reproducible business model that we know works. And looking forward to 2024, as I mentioned, we will continue to scale our digital platform, continue to support all of our clinical initiatives, including the AUDACITY study, and explore some of these green shoots that we are seeing from a reimbursement perspective, building off the initial success we've had in the U.K. And then finally, you know, looking much further into the future, I really believe that the program that we've developed has the ability to treat all obesity-related comorbidities simply because of the pace at which we can generate weight loss, and our fantastic weight maintenance results that we've now demonstrated in a large number of patients. And building on those clinical results, we intend to expand our partnerships with payers, with other strategic partners, to begin exploring more of a more efficient business model and commercialization model, especially as we enter the United States market. So I'll stop there. I won't go through the individual key highlights. And I think we have some time for questions, Shaymus. Yeah, wonderful, wonderful presentation. And thank you for that nice overview and going through. This sounds like a very interesting and kind of differentiated technology. I guess to start, so to speak, you know, what is kind of the referral pathway through this? Are you seeing people get it through, you know, an obesity specialist? Is it a general practitioner that maybe could do this? I guess walk through how you see that both, you know, kind of in the U.S. when potentially you do eventually get approval and launch and how it currently is working OUS. Yeah, it's a great question. We have significant flexibility there given how easy it is to administer the Allurion Balloon. Historically, we've gravitated towards the bariatric surgery channel, because a lot of bariatric surgeons also have the infrastructure and the existing patients who are quite interested in losing weight. Because bariatric surgery has such low penetration, only 1% of patients who qualify for bariatric surgery go on to get it. There's typically a long waiting list at many of these practices for patients who don't want surgery but will do something like the Allurion Balloon quite readily. But we also have a very exciting business in the aesthetics channel. You know, we have seen some green shoots there recently in terms of plastic surgeons and even, you know, aesthetic other types of aesthetic surgeons that are using the Allurion Program for aesthetic weight loss but also as a precursor to things like liposuction, breast augmentation, Botox, fillers, et cetera, because all of those aesthetic interventions look much better from a cosmetic standpoint once there's a little bit of weight loss. We also have, you know, users in the OB/GYN segment, in the general practitioner segment, gastroenterologists. This is something that can be done by almost any type of physician. But we are, you know, we've been very selective so far in choosing the providers that we know can drive great weight loss outcomes and have a focus on long-term weight maintenance. Wonderful, wonderful. And, you know, just when they do this procedure in a doctor's office, you know, how do they ensure it's, so to speak, in the correct place? You know, how do you titrate it per a patient? I'm assuming someone who is, you know, rather morbidly obese, and has been overeating for years may need a slightly larger volume than someone who, you know, is, for lack of a better term, you know, has only been obese for one or two years, you know? Yeah, there's a lot of interesting data on this, actually, that, human adults actually, have the same size stomach, and it doesn't really vary with your body mass index. After you go through puberty, your stomach is at maximum capacity between 1 liter and 1.5 liters. And so our balloon actually doesn't need to be titrated. It can generate, a pretty powerful effect at the 500-milliliter volume no matter whose stomach it's in. And the way the balloon works is actually, partly by occupying space inside the stomach but also by delaying gastric emptying. So the food that you do eat with the balloon inside of it, the food remains in the stomach for a lot longer and actually gets titrated into the intestines much more slowly. And that's partly what explains this impact that we're able to have on diabetes, because as food enters the intestines much more slowly, there's lower spikes of insulin, less fat storage, and better glucose control as a result. So, the mechanism behind the balloon is actually very much aligned with the fact that, you know, most human stomachs are going to be roughly the same size. Got it, understood. I have one or two live chat questions, so let me go to these first. Do doctors make more of a profit using the Allurion Balloon or prescribing a GLP-1? And are you seeing, you know, I guess if yes, so to speak, are you seeing doctors upselling patients to the balloon? It's a great question. And, you know, in most instances, when you prescribe any sort of drug, not just a GLP-1 drug, doctors don't make any money. That is not an economic event for them. They may make a small fee to see the patient in the office for the visit. But, you know, in most countries, it's actually illegal to pay doctors to write a prescription for a regulated substance like a GLP-1. Whereas for the Allurion Balloon, it's a cash-pay intervention. And we have seen instances where prescribers or providers are using the Allurion Balloon in patients where the patient is a great candidate for the balloon. They may actually be a better candidate for the balloon than a GLP-1 drug and also generating a significant amount of revenue in the process. At the end of the day, we leave that decision of whether or not to give someone a balloon or a drug up to the doctor. But certainly, there is going to be better economics associated with our balloon for the doctor than in prescribing a GLP-1 drug. Got it, got it. And then this next one, I want to ask this question first to tie this back in, but I guess, you know, what are you seeing the typical usage of patients? You know, is it typically one balloon? Is it two? You know, and how does that differ versus, I believe, AUDACITY? I believe it is a two-balloon trial. Correct, that's right. And so typically, it depends on the patient's starting BMI. So at the lower end of the BMI range, where you're looking at patients who are just overweight and don't have obesity or have moderate levels of obesity, typically one balloon cycle is enough to get them down to an ideal or normal body weight, and then our Virtual Care Suite and Behavior Change Program can help them stay there. At BMIs greater than 35, that's typically a population of patients that may be considering bariatric surgery or high-dose GLP-1s. In that population, because they have more weight to lose, a second balloon cycle is much more common, and so as we think about the AUDACITY study and a U.S. population which has very high average BMI and has a significant segment of the population that is BMI greater than 35 and BMI greater than 40, we built in a second balloon cycle into AUDACITY to generate that data, to demonstrate that in the U.S. population, for instance, which may want a second balloon cycle at higher levels than we see outside the U.S., that we have that on-label, and we have the data available for the patient to make that decision. Got it, appreciate that. And, you know, on AUDACITY, you know, I know you said, you know, top-line data by the end of the year. I guess, you know, it's always a question, but, you know, when do you expect a submission to the FDA, potential approval timelines, all that fun stuff? We will be doing a modular PMA submission. So, as we submit the various modules, we'll be, you know, letting the market know that. Once we have our top-line data available, at that point, we'll be submitting our final module to the FDA, and we'll provide, you know, further guidance on, you know, FDA approval timelines at that point. Got it, completely understand. Then, kind of on the Behavior Change Program, you know, and coaches for that, you know, do individuals have continued, you know, access to this program after usage of the balloon? Because I'm just curious, you know, you're seeing sustained weight loss, so to speak, out to, I believe it was 16 months. You know, I know you've noted that that's the change, but what kind of is keeping and stopping people from just falling back into that? You know, because you're seeing it with GLP-1s, they come off of it, and they're right back and regaining that weight. It's mostly because while they are on the GLP-1s, there's really not an effort being made to help them change their lifestyle. You know, when I present the Allurion Program, those three pillars, our balloon, our digital platform, and our behavior change program, in my mind, have equal weight. You know, you cannot just do one and expect long-lasting outcomes. And so the difference with Allurion versus just getting a script for a GLP-1 or even going through a bariatric surgery is the balloon is just the first step. Once you have the balloon inside your stomach, then you actually have sort of a secret weapon to help you change your behavior and your lifestyle. The balloon makes it much easier to make those changes. And once the balloon is gone, through our program, those changes really do stick. And that's not to say that we can't get there with bariatric surgery or GLP-1s. I think what we've seen with these commercial agreements that we've struck so far is that our Behavior Change Program and our digital platform can be just as effective in helping GLP-1 patients and bariatric surgery patients achieve those longer-lasting outcomes. So I really see a future where the Allurion Program, with the balloon at the heart of it, is a fantastic first-line and second-line therapy for patients who want to lose weight, but our digital platform and our Behavior Change Program could become the ideal companion for whatever weight loss intervention a patient eventually undergoes. Perfect, that makes sense. And we have about a minute left, but, you know, I want to just kind of turn this back to you. Is there anything that you ever feel that isn't touched on enough or that we don't kind of broach that you want to, you know, just take this minute and, you know, highlight, so to speak? Well, look, I mean, there's 1 billion people around the world now with obesity. And I think one thing that is often difficult to wrap your head around is just how big of a market opportunity that is. I see a lot of the same trends happening in obesity that I saw as a medical student back in 2009 in cardiology, where it used to be that if you had heart disease, you got a bypass surgery, and then stents came along, and then ACE inhibitors and beta-blockers came along. And all of those treatments, drugs, devices, surgery, are coexisting peacefully in cardiology today. I see that in the future for obesity as well, where GLP-1s, bariatric surgery, interventions like the Allurion Balloon will be complementary and create this ecosystem where patients have multiple options to manage their weight over the long haul. So, I think the future is very bright for obesity, and there's going to be plenty of room for a whole host of different companies attacking this problem from different angles. Wonderful, wonderful. Thank you for that. I just want to say thank you for coming to present. Thank you for all that are online, and have a wonderful day. Thank you, Seamus. Take care. Thank you all.