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Company funding

Obalon gains US$30 million for US Pivotal Trial

Proceeds will be used primarily to fund US clinical trials to support an FDA approval of the Obalon balloon

Obalon Therapeutics has completed a $20 million Series D private equity financing and a $10 million term loan from Square 1 Bank, the proceeds will be used primarily to fund US clinical trials to support an FDA approval of the Obalon balloon, a novel, nonsurgical, fully-reversible device for weight loss, the company said.

The Obalon treatment consists of an initial consultation with a weight loss specialist, which involves an analysis of their medical history and the swallowing of a placebo capsule to verify the patient’s suitability.

This is then followed by a short five minute placement procedure where the patient swallows a small capsule attached to a micro-catheter. Once the capsule arrives in the stomach, the outer layer dissolves. The balloon is then simply inflated to the size of an apple, through the micro-catheter, without the need for an endoscopy or sedation.

Once inflated, Obalon sits comfortably at the top of the stomach sending messages to the brain to decrease the feeling of hunger, which encourages reduced food consumption and calorie intake. Following a healthy eating plan in conjunction with Obalon ensures enhanced weight loss. Unlike other balloon treatments, there is no need to eliminate certain foods; you simply eat less due to a reduced appetite, the company claims.

"Our new and existing investors recognize the significant potential of the Obalon balloon. We look forward to executing this pivotal clinical trial, which will bring us closer to making the Obalon balloon available to people in the US who seek nonsurgical weight-loss solutions," said Andy Rasdal, CEO of Obalon.

The Obalon balloon is approved and available in the European Union, Mexico and the Middle East. Proceeds from the financing will also be used to fund the continued evolution and development of Obalon Therapeutics' novel pipeline and commercialisation of the Obalon balloon in territories outside the US.

A new syndicate of international investors, including Axon Ventures, Bader Sultan & Bros Co WLL, Mirae Asset Venture Investment, NeoPlux Co and Striker Asia Opportunities Fund, participated in the US$20 million Series D financing along with existing investors, Domain Associates, InterWest Partners and Okapi Venture Capital. The Series D and Square 1 Bank funding brings the total capital raised by Obalon to US$65 million since its inception in 2008.

The company has received Investigational Device Exemption approval from the FDA and is currently enrolling its first US feasibility clinical trial evaluating the safety and efficacy of the device. The company has completed four clinical trials outside the US.

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