Obalon Therapeutics is hoping to raise some funds through a public sale of $35 million worth of its common stock. The San Diego, CA-based company developed the first FDA-approved swallowable, gas-filled intragastric balloon system for the treatment of obesity, which FDA approved in September 2016.
The offering could fetch an additional $5.25 million if the underwriters' over-allotment option is exercised in full.
The stock sale brings attention to a market that saw a rash of new treatment devices approved in 2015 and 2016. While these newer weight-loss technologies offer potentially less invasive solutions to the obesity epidemic, most of them are not yet covered by insurance as payers wait for more data to support reimbursement.
Last year two of Obalon's closest competitors also landed on FDA's radar after their products were linked to a handful of patient deaths. FDA said at least four patients had died after receiving the Orbera Intragastric Balloon System made by Austin, TX-based Apollo Endosurgery, and at least one patient died after getting the ReShape Integrated Dual Balloon System made by San Clemente, CA-based ReShape Medical.
The root cause and incidence rate of patient death is still unclear and FDA said at the time that it had not yet been able to "definitively attribute" the deaths to the devices or the related procedures.
Both the Orbera and the ReShape systems use liquid-filled intragastric balloons instead of a gas-filled balloon like the Obalon system uses.
The agency recommended close monitoring of patients with liquid-filled intragastric balloon systems for the potential risks of acute pancreatitis or spontaneous over-inflation. Both Apollo and ReShape also revised the product labeling of the devices to address these risks.