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Allurion: first HealthTech IPO of 2023 via SPAC with Compute Health



Exec Summary:


Allurion, a weight loss company that makes a swallowable gastric balloon, went public this week on August 2, 2023 through a merger with a special purpose acquisition company (SPAC) called Compute Health. The deal valued Allurion at $500 million.


Compute Health is a blank-check company that was formed to acquire a health care technology business. The company is led by former Medtronic CEO Omar Ishrak.


The SPAC merger was announced in February 2023. The deal included $100 million in cash from the SPAC and a private investment in public equity (PIPE) of $50 million. The PIPE was led by RTW Investments.


Allurion's gastric balloon is a non-surgical weight loss device that is inserted into the stomach through the mouth. The balloon is filled with saline and stays in the stomach for up to 12 weeks. During that time, the balloon helps to reduce the amount of food that the person can eat.


Allurion's gastric balloon is FDA-approved and has been shown to be effective in helping people lose weight. The company's clinical trials have shown that people who use the balloon lose an average of 20% of their body weight.


The SPAC merger gives Allurion access to capital that it can use to expand its sales and marketing efforts. The company also plans to use the money to develop new products and services.


Allurion's IPO is the first health tech IPO of 2023. The company's success will be seen as a sign of whether the health tech IPO market is thawing after a period of dormancy.


Here are some of the key takeaways from Allurion's IPO:

  • The company's gastric balloon is a non-surgical weight loss device that is FDA-approved.

  • The SPAC merger gave Allurion access to capital that it can use to expand its sales and marketing efforts.

  • The company plans to use the money to develop new products and services.

  • Allurion's IPO is the first health tech IPO of 2023


Allurion is facing some challenges, however. The obesity market is highly competitive and there are a number of other weight loss products on the market. Additionally, the company has been criticized for its high price tag. The Obalon Balloon System costs $2,000 and the digital weight loss program costs $199 per month.


Despite these challenges, Allurion is well-positioned for growth. The obesity market is a large and growing market, and Allurion's products have the potential to help millions of people lose weight. The company is also expanding its product offerings and it is developing new technologies to address the obesity epidemic.


It will be interesting to see how Allurion performs as a public company. The company has a strong management team and a promising product portfolio. However, the company will need to overcome the challenges of the obesity market and the high price of its products in order to be successful.


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Intro to Allurion


Allurion is a medical technology company that develops and markets weight loss products. The company's flagship product is the Allurion Gastric Balloon, a swallowable, procedure-free balloon that is inserted into the stomach through the mouth.


The balloon is filled with saline and stays in place for up to 12 weeks. During this time, the balloon helps to reduce the amount of food that the person can eat, leading to weight loss.


Allurion was founded in 2010 and is headquartered in Boston, Massachusetts. The company has received FDA approval for the Allurion Gastric Balloon in the United States, Europe, and other countries.


In addition to the Allurion Gastric Balloon, Allurion is also developing other weight loss products, including a digital weight loss program and a non-surgical weight loss pill.


The company's mission is to "end obesity globally, helping our patients to live fuller, longer lives."


Here are some of the benefits of using Allurion's weight loss products:

  • Non-surgical: The Allurion Gastric Balloon is a non-surgical device, which means that there is no need for anesthesia or incisions.

  • Procedure-free: The Allurion Gastric Balloon is inserted into the stomach through the mouth, so there is no need for surgery.

  • Effective: The Allurion Gastric Balloon has been shown to help people lose an average of 10% of their body weight.

  • Safe: The Allurion Gastric Balloon is a safe and effective weight loss device.

Allurion's Investors


Allurion has raised over $150 million in funding from a number of venture capital firms, including:

  • Romulus Capital

  • Novalis LifeSciences

  • Venrock

  • GV (formerly Google Ventures)

  • NEA (New Enterprise Associates)

  • Northpond Partners

  • Tau Ventures

  • Runway Growth Capital

These investors are attracted to Allurion's innovative technology and its potential to disrupt the weight loss market. The company's gastric balloon is a non-surgical, minimally invasive procedure that is safe and effective for many people.


Allurion's venture capital investors believe that the company has the potential to become a major player in the weight loss market.


In addition to venture capital funding, Allurion has also received funding from the National Institutes of Health (NIH). The NIH grant is supporting the company's research on the use of its gastric balloon for the treatment of obesity.


Allurion's venture capital investors and the NIH grant are a testament to the company's potential to make a significant impact on the weight loss market. With continued investment and development, Allurion could become a leading provider of weight loss solutions.




Intro to Compute Health


Compute Health Acquisition Corp. (NYSE: CPUH.U, CPUH & CPUH WS) is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganisation or similar business combination with one or more businesses.


On February 9, 2021, Compute Health closed its initial public offering of $862.5 million. The company is led by the management team of Omar Ishrak, Jean Nehmé and Joshua Fink. The company’s strategy is to focus on healthcare businesses that are already leveraging or have the potential to leverage computational power, with an emphasis on companies in the medical device space, including imaging and robotics. https://www.compute-health.com


Compute Health Allurion strategy


The Compute Health Allurion strategy is to combine Allurion's innovative weight loss technology with Compute Health's expertise in healthcare technology to create a leading provider of weight loss solutions.


The company plans to use the funds from the merger to expand Allurion's sales and marketing efforts, develop new products, and pursue international growth.


Compute Health believes that the combination of Allurion's technology and its own expertise will allow the company to disrupt the weight loss market. The company's goal is to become the leading provider of weight loss solutions by 2025.


Here are some of the key elements of the Compute Health Allurion strategy:

  • Expand sales and marketing: Compute Health plans to expand Allurion's sales and marketing efforts to reach more patients and providers. The company plans to do this by increasing its presence at medical conferences, launching a new marketing campaign, and expanding its sales team.

  • Develop new products: Compute Health plans to develop new products that build on Allurion's technology. The company is currently working on a new gastric balloon that is smaller and easier to swallow. The company is also developing a digital platform that will help patients track their weight loss progress.

  • Pursue international growth: Compute Health plans to pursue international growth by expanding Allurion's presence in new markets. The company is currently focused on expanding in Europe and Asia.

The Compute Health Allurion strategy is ambitious, but the company has the potential to be successful. The company has a strong management team with a proven track record in the healthcare industry.


The company also has a unique technology that has the potential to disrupt the weight loss market.


If Compute Health is able to execute on its plans, it could become a leading provider of weight loss solutions in the years to come.

Compute Health Allurion: key risks


The Compute Health Allurion merger has a number of key risks, including:

  • The weight loss market is competitive. There are a number of other companies that are developing innovative weight loss technologies. Compute Health and Allurion will need to compete with these companies to attract patients and grow their market share.

  • The Allurion gastric balloon is a new technology. There is no long-term safety data on the Allurion gastric balloon. It is possible that the balloon could have side effects that are not yet known.

  • The Allurion weight loss program is expensive. The Allurion weight loss program is more expensive than other weight loss programs. This could make it difficult for the company to attract patients.

  • The company is a SPAC. SPACs are a type of blank-check company that is formed to acquire a business. There is no guarantee that Compute Health will be able to complete a successful acquisition.

Overall, the Compute Health Allurion merger is a high-risk, high-reward investment. The company has a strong team with a proven track record, and it has the resources to execute on its plans.


However, the company faces a number of challenges, including the competitive weight loss market and the lack of long-term safety data on the Allurion gastric balloon.


Here are some additional risks that could impact the Compute Health Allurion merger:

  • Changes in the regulatory environment. The regulatory environment for weight loss technologies is constantly changing. If there are changes in the regulations, it could impact the company's ability to market and sell its products.

  • Economic downturn. A economic downturn could lead to a decrease in demand for weight loss products. This could impact the company's revenue and profitability.

  • New technologies. The development of new weight loss technologies could make the Allurion gastric balloon less competitive. The company will need to continue to innovate in order to stay ahead of the competition.


Compute Health Allurion: future predictions

It is difficult to make predictions about the future of Compute Health Allurion. The company is still in its early stages, and it faces a number of challenges. However, the company has a strong team with a proven track record, and it has the resources to execute on its plans.


If the company is successful, it could become a major player in the weight loss market. The global weight loss market is worth over $200 billion, and there is a growing demand for effective and convenient weight loss solutions.


Here are some predictions for the future of Compute Health Allurion:

  • The company will expand its sales and marketing efforts. This will help the company reach more patients and grow its market share.

  • The company will develop new products. This will help the company offer a wider range of weight loss solutions and stay ahead of the competition.

  • The company will pursue international growth. This will help the company reach more patients and grow its revenue.

The company's success will depend on a number of factors, including the regulatory environment, the economic climate, and the development of new technologies.


However, if the company is able to overcome these challenges, it could become a major player in the weight loss market.


Here are some additional predictions for the future of Compute Health Allurion:

  • The company's stock price will fluctuate. The stock price will be volatile as the company navigates the challenges of the weight loss market.

  • The company will face competition from other weight loss companies. The company will need to continue to innovate in order to stay ahead of the competition.

  • The company's products will be subject to regulatory scrutiny. The company's products will need to meet regulatory requirements in order to be marketed and sold.

Engage with the HealthTech Community


HealthTech M&A Newsletter from Nelson Advisors - Market Insights & Analysis for Founders & Investors. Subscribe today! https://lnkd.in/e5hTp_xb


HealthTech M&A Advisory by Founders for Founders, Owners & Investors. Buy Side, Sell Side, Growth and Strategy mandates - Email lloyd@nelsonadvisors.co.uk


HealthTech Thought Leadership from Nelson Advisors - Industry Insights & Analysis for Founders, Owners & Investors. Visit https://www.healthcare.digital






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