Devices & Diagnostics

Weight Loss in a Pill Device Firm Allurion Heads to NYSE via SPAC Merger

Allurion Technologies has developed a gastric balloon that does not require surgery. The merger deal taking Allurion public comes as the company continues global commercialization of its technology.

Weight loss products are in strong demand right now, and Allurion Technologies is capitalizing on that market appetite with a deal that takes the company public and infuses it with $87 million to support clinical testing in the U.S. and commercialization of its technology worldwide.

Allurion is merging with Compute Health Acquisition Corp., a special purpose acquisition company whose leadership includes former Medtronic CEO Omar Ishrak. The deal announced Thursday values the combined entity at about $500 million. It will keep the Allurion name and be run by the Natick, Massachusetts-based company’s management team. When the merger closes in the coming months, Allurion’s shares will trade on the New York Stock Exchange under the symbol “ALUR.”

Allurion has commercialized a gastric balloon in the form of a capsule. Unlike traditional gastric balloons that are surgically implanted, Allurion’s device is meant to be swallowed by the patient under the guidance of a clinician. The balloon inflates in the stomach and is checked by X-ray to verify its placement. Allurion says this outpatient procedure takes about 15 minutes.

The Allurion platform includes software that collects data and monitors a patient. An app also provides patients with weight loss guidance through information about diet, nutrition, sleep, and more. While the balloon is in place, patients develop new food habits and adjust to smaller portion sizes. After about four months, a valve opens and allows the balloon to empty and pass out of the body with waste. But the dietary and behavioral changes that a patient makes are hoped to last much longer.

Allurion says more than 100,000 patients have been treated by its technology, which received the European CE Mark in 2015. The product has launched in Canada, Mexico, India, Australia, and Brazil. Allurion reported 2022 sales of $64 million, a 68.4% increase over the prior year.

In the U.S., Allurion initially sought FDA approval in 2020 based on the results of a clinical trial that compared the balloon to a sham procedure. But that study missed one of the study goals due to sham overperformance, according to an investor presentation. The FDA asked for more clinical data to support longer treatment duration and higher efficacy. Allurion withdrew its application. The Allurion technology is now being evaluated in an open-label clinical trial with a targeted enrollment of about 1,000 patients who will be evaluated after 48 weeks. Results from that study, which is comparing the balloon and lifestyle therapy to lifestyle therapy alone, could support another FDA submission.

The proposed merger opens the door to a potential collaboration with Medtronic. According to the investor presentation, Allurion’s balloon and digital platform could be offered in weight loss centers covered by Medtronic’s bariatric surgery channel. People could be directed to either Medtronic’s offering or the Allurion technology, depending on patient suitability.

The merger agreement includes a private financing, led by RTW Investments, in which investors will purchase Allurion shares priced at $7.04 each. RTW Investments is also providing synthetic royalty financing, a loan in which repayments are determined by future revenue. In total, these financings will provide Allurion with at least $87 million.

Allurion was co-founded founded in 2009 by Shantanu Gaur and Samuel Levy while they were studying at Harvard Medical School. Gaur is the company’s CEO, and he will continue in that role following the merger. The companies expect to complete the transaction in the first half of this year.

“By combining our revolutionary Allurion Balloon with a digital platform and behavior change program, we have created the world’s first and only full-stack weight loss platform,” Gaur said in a prepared statement. “We look forward to investing this capital to fulfill our mission.”

Photo by Allurion Technologies