Allurion Technologies, Inc.

Good morning and thank you all for joining us today. Earlier today, Alurion Technologies Inc. issued a press release announcing financial results for the quarter ended September 30, 2024, as well as a review of the company's recent business highlights. You can access a copy of the announcement on the company's website at www.investors.alurion.com. With me on the call today are Shantanu Goor, Founder and Chief Executive Officer, Brian Conyer, Vice President of Digital Health, Adrian Wild, Senior Vice President, International Commercial, and Chris Geber, Chief Financial Officer. Before we begin, I'd like to inform you that comments mentioned on today's call contain forward-looking statements within the meaning of federal securities laws, including but not limited to the financial outlook for 2024 and our expectations regarding profitability in the future, the market and demand for our products and elective procedures, the impact of cost reduction initiatives on cash burn and runway, the ability to compete with GLP-1 drugs or use of the Allurion program in combination with GLP-1 drugs, time and expectations regarding our ongoing clinical trials, and expectations regarding our ability to launch our products in new markets and growth and procedure volumes. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are described in detail in our Securities and Exchange Commission filings, including our most recent 10-K filed on March 26, 2024. Our SEC filings can be found through our company website at investors.allurion.com or on the SEC's website. Investors are cautioned not to place undue reliance on such forward-looking statements, and DeLorean undertakes no obligation to publicly update or release any revisions to these forward-looking statements. Please note that this conference call is being recorded and will be available for audio replay on our website at DeLorean.com under the Invents and Presentations section on our Investor Relations page shortly after the conclusion of this call. Today's press release and supplementary financial data tables have been published to our website. And with that, I'll turn the call over to Shantanu.

Good morning, and as always, thank you for joining us today. While we've had a challenging year financially, I have clarity and excitement about the path forward we are announcing today, composed of five tangible levers for Allurion to maximize shareholder value, given our products, our team, and the massive opportunity in weight loss. which we have not truly capitalized on to date. We will also discuss the success of our AI product, which I've only touched on in the past, but believe can have a significant impact for shareholders in 2025. You will also hear us talk about a more efficient commercial strategy for our balloon business, both globally and in preparation for the U.S. market, given our audacity trial readout slated for the end of this year. I have deep conviction that our balloon platform works very well as we have ever-increasing data that demonstrates its effectiveness, and we have a plan now to realize its full potential. First, let's discuss financials. Third quarter revenue was $5.4 million, which includes a reduction to revenue of $1.2 million for product recalled during the third quarter that was sold in France in prior quarters. Our performance this quarter was adversely affected by the suspension of the Allurion balloon in France, macro headwinds in certain markets, and the launch of compounded and, in some cases, counterfeit GLP-1 drugs in the UK. In addition, while no similar action has been taken by any other regulatory authority outside of France, we believe we did incur some temporary disruption in other markets as patients and providers became aware of the actions taken in France. In the third quarter, we worked with ANSM on a remediation plan, which we completed in October. we remain optimistic about resuming commercialization in France as soon as possible. We have certain areas of strength in the third quarter, particularly in the Middle East where procedure volumes grew by 20% compared to last year and growth in parts of Latin America that appear to be recovering from a macroeconomic standpoint. We believe that what is occurring now in the Middle East, approximately one year after the introduction of GLP-1 drugs, is driven in part by patients who have tried GLP-1s, churned off, and return to their doctors for a second-line therapy like the Allurion program. We believe that we may see a similar phenomenon play out in other markets in the future, lending more credence to our belief that GLP-1s may be a short-term headwind, but a long-term tailwind for Allurion. One of the most exciting things I have to announce today for the first time is that we have seen significant growth in recurring revenue from our AI-native platform, the Allurion Virtual Care Suite, or VCS, for a third quarter in a row. This business line is led by Brian Conyer, and I will pass it over to him to provide further details.

Thanks, Shantanu. I've been with Allurion for almost a year now and have a track record as a digital health entrepreneur. I've always looked at Allurion's rich data set and global footprint as right for digital product lines. We've been very quiet about our AI products until we had traction, but it's clear to me now that our digital business could be a driver of value for shareholders. Our AI product revenues have grown more than 80% year-over-year, despite having invested minimal resources into the team thus far. We're on track to double revenues from our AI products by year-end. This growth was driven by expansion in the United States, where we onboarded our first patients who were taking GOP1s, and in Europe, where we're seeing growth in GOP1 prescribing and a growing need for remote patient monitoring and 24-7 coaching. With revenues increasing at this pace, we believe we can expand this business further in 2025 and plan on testing Coach Iris, our verticalized conversational AI agent for weight loss, in different use cases in the coming months, including for patients seeking GLP-1s as a first-line option. I look forward to exploring these exciting use cases in the near future, and I'll now turn the call back over to Shantanu.