ReShape Lifesciences, Inc.

Good afternoon, and thank you for joining the Reshape Life Sciences first quarter 2023 conference call. I would like to turn the call over to Michael Miller from RX Communications.

Good afternoon, and thank you for joining the Reshape Life Sciences first quarter 2023 earnings call. I'm pleased to be joined today by Paul Hickey, President and Chief Executive Officer, and Tom Stankovich, Chief Financial Officer. Paul will provide an overview and update on the company's activities and Tom will review the financial results for the period. He will then turn the call back over to Paul for some closing remarks, after which we'll open the call to a question and answer session. As a reminder, this conference call, as well as Reshape Life Sciences' SEC filings and website, including the investor information section of the website, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those discussed due to known and unknown risks, uncertainties, and other factors. These and additional risks and uncertainties are described more fully in the company's filings with the Securities Exchange Commission, including those factors identified as risk factors in the company's most recent annual report on Form 10-K. As an additional reminder, reshaped stock is listed on NAVVAC, trading under the symbol RSLS. I will now turn the call over to Paul Hickey, President and CEO of ReShape. Paul?

Thank you, Mike. I'd like to thank all of you for joining us this afternoon for our first quarter 2023 earnings call. In the first quarter of 2023, we have continued to execute our strategies to become a sustainable and scalable organization on a path towards growth and profitability. Before I delve into our first quarter highlights, I'd like to briefly remind you of our three growth strategies or pillars for growth. Our first pillar is to operate our business with a disciplined metrics driven approach to drive predictable revenue growth through a sustainable and scalable business model. Key to this first strategy is the revamping of our lead generation initiatives. The second pillar is to continue to expand our product portfolio and pipeline across the care continuum. And our last pillar is to continue to validate our evidence-based weight loss solutions, leveraging our scientific advisory board for key insights on strategic initiatives. I'm proud to say that during the first quarter, we had many successes. In particular, before one-time adjustments, we significantly reduced operating expenses by 43% as compared to the first quarter of 2022, allowing us to invest in our growth initiatives, including marketing and R&D. Additionally, these cost reductions, combined with our laser focus on executing on our growth pillars to drive revenue, put us in a strong position to achieve our goals. Before I further detail our highlights and upcoming initiatives, I'd like to mention the enormous market opportunity before us. The global multibillion-dollar obesity market opportunity remains largely untapped. Currently, 2.5 billion people, or more than 30% of the global population, is considered overweight or obese, a figure that's expected to grow by 50% by 2030. The global weight loss and obesity management market is expected to rise in an estimated value of $300 billion, representing a substantial compound annual growth rate of 6.7% from 2019 through 2026. Thrilling down a bit, the overall bariatric surgical device market alone is projected to reach $2.8 billion worldwide by 2025, with the U.S. portion accounting for $1.8 billion in the same timeframe. Additionally, with 50% of adults in the U.S. trying to lose weight every year, we believe our differentiated suite of weight loss and metabolic health solutions is well-positioned to address the entire weight loss continuum. Moreover, according to the FDA, approximately 70% of American adults are obese or overweight, resulting in serious health issues at tremendous cost. It's important to remember that weight loss is tied to a dramatic drop in an individual's cancer risk. It can help lower blood pressure and manage diabetes. The most recent development in the obesity market is the median and recent consumer adoption of GLP-1 agonists for weight loss. The related big pharma marketing efforts have significantly increased the number of overweight and obese individuals who are seeking medically managed weight loss. While in the past obesity has been a sensitive topic and treatment has not been normalized, we are pleased to see a shift in perception as well as a greater awareness and acceptance of how critical obesity care is for both adults and children. Given the known limitations of behavioral modification, the inaccessibility, side effects, and durability of pharmaceutical therapy, and the anatomy altering and irreversible nature of other bariatric surgical approaches, we believe more than ever that there is substantial need for the less invasive, adjustable, and reversible lap band. Our product has proven a safe, effective, and durable solution providing long-term weight loss. Now let me turn back to the discussion of our recent highlights and growth initiatives. Based on the cost reductions I previously mentioned, we remain on path to profitability, with the balance sheet bolstered by two capital raises this year, totaling $12.7 million in gross proceeds. These funds will allow us to invest in our growth drivers in order to expand awareness of our evidence-based product portfolio, including the lap band. We are steadily increasing visibility for the lap band through our highly targeted direct consumer marketing campaign, which has already helped yield higher quality and lower cost patient leads in specific markets that align with our surgeon advocates. Through our experience, we know the primary driver of lap band surgeries is patient engagement. As I mentioned on our last call, we are strategically targeting key touchpoints in the patient's decision process for surgery, including developing an improved patient-centric website experience, which we're on target to launch in the third quarter. This will also be combined with the launch of a marketing automation initiative to improve this process with automated email, text, call, and web retargeting to ensure that every patient inquiry has the highest possible chance of transferring to a surgeon. We are building these core competencies in-house, including our call center, to align with the marketing automation and lead nurturing efforts. Even when considering the new technology implementation and headcount associated with these efforts, we believe we can save money while ensuring ongoing optimization and nimble marketing to responsive to the market. In summary, we're improving our marketing efforts to better address patient needs with the intent of increasing conversions on the website driving more brand engagement and ultimately more lap band surgeries. At the upcoming ASMBS meeting in June, we will have the first full meeting of our recently formed Global Scientific Advisory Board, comprised of internationally recognized experts and surgeons in the obesity and metabolic disease fields. Reshapes SAB provides us access to an extensive and unparalleled knowledge base, as well as relationships and insights that will be invaluable as our SAB members provide feedback on our growth initiatives. We expect that each member will be integral in helping us expand access for patients to safe and effective treatments for durable weight loss. This is critical as we continue to execute our disciplined approach to drive revenue and expand our product pipeline. To that end, one of our newly launched products is the redesigned calibration tubes. with three new sizes, which are used in a broad range of laboratory procedures, such as laparoscopic sleeve gastrectomy and gastric bypass. We expect the reshape calibration to add incremental new customer revenue this year. It is important to reiterate this product is used in procedures other than the lap band, and therefore provides a great opportunity for us to increase future revenues. Further, in the coming weeks, we intend to submit a PMA supplement to the FDA for the next generation enhanced lap band 2.0, which was developed with physician feedback to improve the patient experience. Similar to our current lap band, the lap band 2.0 is adjustable postoperatively to increase or decrease the opening of the band in order to optimize an individual's comfort, thereby improving the therapy effectiveness. At the same time, a unique feature of the lap band 2.0 is an enhanced band reservoir technology that serves as a relief valve designed to alleviate discomfort from swallowing large pieces of food that may require in-office patient band adjustments. We expect feedback from the FDA by year end, and if approved, we believe, based on discussions we've had with physicians, that there will be broad adoption by existing and new surgeons. As I've noted in the past, surgeons I've spoken with about the improved product believe the LapBand 2.0 will allow us to engage new surgeons and reengage many of those who have used the LapBand historically. At the same time, we continue to engage with healthcare professionals to expand awareness and use of personalized treatments, including both our proprietary lap band and the HIPAA-compliant novel weight management program, Reshape Care, to ensure that patients can achieve durable weight loss goals, improvements in obesity-related comorbidities, and quality of life. Additionally, we continue to engage several large self-insured employers to provide Reshape Care to employees in order to positively impact overall employee health and thus reduce employers' healthcare costs. The reception from our discussions have been very positive. As a reminder, Reshape Care Weight Management Program supports healthy lifestyle changes for all persons, not just individuals who qualify for lap band surgery. We look forward to sharing updates on this exciting program in the future. Well, one of our most compelling pipeline products is our proprietary diabetes block stim neuromodulation, or DBSN device. The DBSN's dual vagus nerve neuromodulation selectively modulates vagal block and stimulation to the liver and pancreas, respectively, to manage insulin and blood glucose levels. We had the opportunity to present compelling preclinical evidence on the DBSN at the recent Keystone Symposium on Type 2 Diabetes. demonstrating that this technology may be able to reduce diabetes dependence, diabetic patients' dependence on medications in a very individualized manner. As a reminder, the DBSN has been funded with non-dilutive NIH grants and will continue to collaborate with leading researchers and industry-leading strategic corporate partners while seeking additional NIH grant support. We believe that if approved for commercial use, the DBSN device will further enhance our differentiated medical device offerings. Now, before I wrap up my opening remarks, I want to remind our listeners that one of Reshape's many assets is their strong intellectual property portfolio of 155 patents surrounding all of our products, including the lap band, Reshape DBSN device, and Reshape Obalon balloon system. We have worked diligently to strengthen our IP position, most recently evidenced by the notice of allowance from the U.S. Patent Office for an additional patent covering the Reshape Obalon balloon system. As always, we will continue to build an offensive mode around our product portfolio and commercialization efforts, and also take offensive action when it is appropriate. I would now like to turn the call over to Tom Stankovich to provide a recap of our financial performance. Tom?