ReShape Lifesciences Inc. (NASDAQ: RSLS) dropped 7.86% at the close of the market on Friday despite rising 7.25% pre-market. The stock traded in high volume with 42.55 million shares exchanging hands, which is higher than the average daily trading volume of 6.25 million shares.
ReShape transitions to a fully-fledged Lap-Band manufacturer
The company announced the completion of its Lap-Band production shift to a Massachusetts-based manufacturer from Apollo Endosurgery Inc. ReShape expects the transition to enable it to improve margins, cut costs and directly manage the manufacturing processes.
Notably, the Lap-Band manufactured by the company is the only laparoscopic weight loss approved FDA device in the US indicated for a BMI of more than 30. Since 1993, the surgery has been performed over a million times globally, and most insurance companies compensate qualifying patients. In addition, the Lap-Band has been demonstrated to be the safest available bariatric operation on the market, with 20 years of clinical data showing lower fatality and complication rates than most surgical weight-loss operations.
The transition will enable ReShape to reduced manufacturing process costs
Bart Bandy, ReShape Lifesciences President and Chief Executive Officer, said, “Moving Lap-Band production under our direct operations allows us to have better control of the manufacturing process for significant cost reductions, anticipated scale and improved efficiencies. As we all emerge from the recent pandemic, we are proud to provide products that are able to help a growing population of people with weight-loss needs and to support the addition of new manufacturing and logistics jobs in the United States.”
The Lap-Band program offers a long-term and minimally invasive obesity treatment, and it is an option for invasive surgical stapling operations such as sleeve gastrectomy and gastric bypass. The company’s Vest System, which is laparoscopically implanted, wraps the stomach to emulate the gastric volume decrease effect of the normal weight-loss operation.