Allurion Technologies, Inc.

a question during this time, please press star 1 on your telephone keypad. I would now like to turn the conference over to Tara Brady. You may begin.

Good morning, and thank you for joining us. Earlier today, Allurion Technologies, Inc. issued a press release announcing financial results for the quarter ended March 31, 2025, and provided a business update. You can access a copy of the announcement on the company's website at investors.allurion.com. With me on the call today is Shantanu Goar, Founder and Chief Executive Officer. Before we begin, I would like to inform you that the comments mentioned on today's call contain forward-looking statements within the meaning of federal securities laws. 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 annual report on Form 10-K filed on March 27, 2025. Our SEC filings can be found through our company website at investors.allurion.com or the SEC's website. Investors are cautioned not to place undue reliance on such forward-looking statements, and Allurion undertakes no obligation to publicly update or release any revisions to these forward-looking statements. Please note that this conference call is being recorded. It will be available for audio replay on our website under the events and presentation section on our investor relations page shortly after the conclusion of this call. In addition to the company's gap results, management will also provide supplementary results on a non-gap basis. Please refer to the press release issued today and the accompanying supplementary financial data table for a detailed reconciliation of GAAP and non-GAAP results, which can be accessed from the investor relations section of the company's website. And with that, I will turn it over to Shantanu.

Good morning, everyone, and thank you for joining us as we kick off an exciting 2025 for Allurion, a year we expect to be rich in catalysts. We were pleased to deliver the first quarter in line with expectations, setting us up to deliver on the year ahead. First quarter revenue of $5.6 million was achieved on adjusted operating expenses of $10.1 million, a decrease in expense of 45% compared to the prior year. Adjusted net operating loss of $5.9 million narrowed by 48% compared to prior year, and gross margin expanded to 75% compared to 73% in the prior year and 45% in the previous quarter. Our financial results reflect increased efficiency as we move toward profitability with expenses continuing to reduce, gross margin expanding, and operating loss narrowing. As we have stated previously, we have a new vision for the future of Illyrian. That vision begins with our plan for 2025, which is built around five pillars. First, a new commercial plan focused on key geographies with deeper penetration within these geographies and a business-to-business-to-consumer, or B2B2C, direct sales model versus a direct-to-consumer, or DTC, marketing model. Second, gaining FDA approval for the Illurion balloon and preparing for U.S. launch. Third, achieving profitability for the ex-U.S. business by the end of 2025. Fourth, scaling our now-proven AI product platform and leveraging a variety of new business models. And fifth, resuming commercialization in France. Thus far in 2025, I am extremely proud of our team for the significant progress we have made across all five pillars. Regarding our new commercial plan, our first quarter results speak to the efficiency of our B2B2C model. We piloted several aspects of the B2B2C model in clinics in Europe in the first quarter and observed over 40% growth quarter over quarter and year over year, giving us confidence in the model as we expand its implementation globally. In the first quarter, we also filled several open positions in our direct markets and will continue to attract top talent in the second quarter. We expect revenues to ramp as the year progresses, as the use of our B2B2C model expands and our enhanced sales team on boards. As part of our new commercial plan, we are increasingly leaning in to the areas where Allurion products either our entire program or just our AI-powered virtual care suite intersect with GLP-1 therapy. In addition to the combination of the Illurion program with low doses of GLP-1s, which I will provide an update on later in the call, we are seeing a number of different approaches being taken by clinicians organically that combine Illurion with normal doses of GLP-1s. As we announced yesterday, We presented two abstracts at the European Congress on Obesity that touch on this. In one study of 138 patients who were prescribed GLP-1s with normal dose escalation and used our VCS, through which they received behavioral support and had changes in lean body mass tract, lean body mass increased by 6.1% and muscle mass increased by 6.4%, while fat mass decreased by 10.2%. In another study of 60 patients who were treated with the Allurion balloon and semaglutide with a normal dose escalation, the average reduction in total body weight was 21.2%, with improvement in LDL cholesterol, triglycerides, and hemoglobin A1C after 10 months. This approach led to outcomes similar to those achieved with bariatric surgery without the risks inherent to surgery. While we believe that the best option for most patients seeking higher weight loss is likely a combination of the Allurion program with a low dose of GLP-1s, these studies speak to the versatility of Allurion's product portfolio. The first study supports our thesis that even at normal doses of GLP-1s, Allurion's virtual care suite can be useful in driving better weight loss outcomes and maintaining muscle compared to what patients can achieve using GLP-1s alone. The second study describes an option that may be attractive for patients with severe obesity who are seeking an alternative to bariatric surgery and may be more willing to tolerate the higher side effects observed with normal dose escalation. Commercially, we believe this versatility will open new doors for us that will ultimately drive higher balloon and software revenues. Regarding our path to FDA approval, we recently completed our pre-PMA meeting with FDA where we presented our top line results from Audacity. We were very pleased with FDA's openness to considering additional analyses that address the control group performance we observed in Audacity. We believe these analyses will further underscore the strength of our data and overall application. We were very encouraged by FDA's feedback, and we very much look forward to completing our PMA submission, which we expect will occur by the end of June, and working collaboratively with FDA toward an approval. Regarding our path to profitability, we believe our first quarter results demonstrate the increased efficiency of our business, following the restructuring we implemented at the end of 2024. With the financings we conducted in the first quarter, along with our continued discipline in our cash use, we ended the first quarter with cash and cash equivalents of $20 million, which provides the company the runway we believe we need to achieve our FDA approval, profitability, and other milestones that could generate significant value for shareholders. Looking forward to the rest of the year, our direct exposure to tariffs is negligible. As many of you know, the Illurion balloon and almost all of its components are manufactured in the US, and we do not expect any impact on gross margin from tariffs for the balance of the year. We are maintaining our guidance that revenues of approximately $30 million with a reduction in operating expenses of approximately 50% compared to 2024. Turning now to our digital product, with the shortages of compounded GLP-1s now officially over, we have started to build out Allurion meds to offer brand-name GLP-1s. We have performed pilot work with pharmacy partners that offer these medications at low and high doses and are in discussions to perform a more complete integration later this year. We believe that having brand-name GLP-1s available through Allurion meds could be an attractive option for U.S. patients, especially at lower doses in combination with the Allurion balloons. With over 40% of adults in the US with obesity and 9% with severe obesity, we believe the combination approach could become the standard of care when the Allurion balloon launches in the United States. Finally, we are making good progress in treating patients in France again. We have reengaged clinics, retrained providers, and are now in the final phases of updating our collateral to reactivate placements. We look forward to providing further updates on this in future calls. Before I turn it over to Tara, I want to provide an update on our vision for the future of obesity care that I shared on our last call and how we believe Allurion can bring this vision to reality and have a significant positive impact for shareholders in 2025 and beyond. We believe that combining the Allurion program with low-dose GLP-1s could become a new standard of care for obesity. By combining the two approaches, our initial data indicate that patients can achieve sustained weight reduction of greater than 20% while maintaining muscle mass and increasing long-term adherence to GLP-1 therapy, driven in part by the fewer side effects experienced at lower doses. This trifecta, losing weight, keeping it off, and maintaining muscle, is what we call metabolically healthy weight loss. The science behind our focus on muscle, use of low doses of GLP-1, and long-term engagement to enable behavior change is clear and continues to be elucidated at physiological, cellular, and psychological levels. First, from a physiological perspective, muscle mass is crucial for driving weight loss and weight maintenance. Compared to fat, muscle burns two to three times more energy per kilo at rest, and during exercise, increased muscle leads to increased energy expenditure. Muscle is also the primary site for glucose storage, removing it from the blood, leading to increased insulin sensitivity and less fat storage. Muscle also releases myokines during exercise, which increase satiety, reduce appetite, and actually stimulate release of endogenous GLP-1. Second, from a cellular perspective, high doses of GLP-1 stimulate pathways that lead to protein degradation and inhibit pathways that lead to protein synthesis, leading to a breakdown of muscle and muscle wasting. Using lower doses of GLP-1 in combination with the Allurion balloon mitigates these effects without impacting overall weight reduction. Further, as discussed on the previous call, the combination of the Allurion balloon with GLP-1s is highly synergistic, as the Allurion balloon primarily works by inducing satiety and GLP-1s work by reducing hunger, two mechanisms of action that are distinct at the cellular and molecular level. Third, from a psychological perspective, behavior change is key for weight maintenance. and takes time. Adopting new eating behaviors typically takes two to three months, and it usually takes six months for these behaviors to become second nature. Data from the National Weight Control Registry, which studies individuals who have successfully maintained a weight loss of at least 30 pounds for at least a year, clearly indicates that maintaining weight loss for one year significantly improves the chances to sustain long-term behavior change. While we have already reported out retrospective data on the combination approach, we now intend to launch a prospective trial, the details of which I am pleased to share today. The trial will be conducted across three obesity centers of excellence in Europe and will enroll subjects with a BMI greater than 30. Subjects will receive the Allurion balloon and will start 0.25 milligrams semaglutide 30 days after balloon placement. Semaglutide dose will increase over the subsequent 11 months to a maximum of 1.0 milligrams. For reference, standard dosing for semaglutide typically reaches between 1.7 and 2.4 milligrams, so the maximum dose that will be used in this study is approximately half. Body weight, muscle mass, and compliance with semaglutide will be evaluated throughout the study using the Allurion scale and Allurion virtual care suites. Subjects will receive lifestyle modification and behavior change counseling through the Illurion app. With the site selected and protocol now drafted, we will begin the process to seek IRB approvals to conduct the trial and expect enrollment to start by the end of this year. We are extremely excited to begin this clinical program. We believe that if successful and validated in larger sample sizes, this combination protocol could become a new standard of care for the treatment of obesity. I will now turn the call over to Tara Brady our Interim Chief Financial Officer. Tara?