ReShape Lifesciences secures key diabetes treatment patent

IRVINE, Calif. - ReShape Lifesciences (NASDAQ:RSLS), a micro-cap company with a market capitalization of $2.69 million specializing in weight loss and metabolic health solutions, has been granted a significant international patent by the State of Israel Patent Office for its Diabetes Neuromodulation technology. According to InvestingPro data, the company’s stock has experienced significant volatility, declining over 64% in the past six months. The patent, numbered 277949 and entitled "Simultaneous Multi-Site Vagus Nerve Modulation for Improved Glycemic Control Systems and Methods," extends protection until December 4, 2039.

This technology leverages the company’s proprietary vagus nerve block (vBloc™) platform, coupled with vagus nerve stimulation, to treat Type 2 diabetes, a condition closely linked to obesity. According to Paul F. Hickey, President and CEO of ReShape Lifesciences, the system has shown promise in reducing medication dependence for diabetics, potentially lowering treatment costs and the complications arising from uncontrolled blood glucose levels and medication non-adherence. While the company maintains a healthy gross profit margin of 68.2%, InvestingPro analysis indicates the company is quickly burning through cash, with a weak overall financial health score.

ReShape’s intellectual property portfolio includes 62 issued or pending patents related to vagal neuromodulation, glucose control, AI, and Bluetooth applications, which the company believes will pave the way for commercialization and provide a defense against competitive threats.

Jonathan Waataja, Ph.D., Director of Research at ReShape Lifesciences, noted the global challenge of treating Type 2 diabetes effectively. The company’s neuromodulation technology modulates vagal block and stimulation to the liver and pancreas, enhancing glycemic control. Pre-clinical developments have shown increased control over blood glucose levels in animal models, with the aim of optimizing insulin production and managing blood glucose in a personalized manner for the potential treatment of Type 2 diabetes and hypoglycemia.

The ReShape Diabetes Neuromodulation system is a minimally invasive implant that modulates vagus nerve branches to organs regulating plasma glucose. It stimulates the pancreas to release insulin and blocks the hepatic vagal branch to decrease glucose release and insulin resistance.

ReShape Lifesciences is recognized for its FDA-approved Lap-Band® and Obalon® balloon technologies, which offer non-surgical weight loss solutions. The company has entered into an asset purchase agreement with Biorad Medisys, Pvt. Ltd., which will result in Biorad acquiring most of ReShape’s assets, including the DBSN™ system, but excluding cash.

This news is based on a press release statement and reflects the company’s ongoing efforts to develop the DBSN™ system as a viable treatment for Type 2 Diabetes and metabolic disorders. Based on InvestingPro’s Fair Value analysis, the stock appears to be undervalued at current levels, though investors should note that analysts do not anticipate profitability this year. For deeper insights into ReShape Lifesciences’ financial health and growth prospects, including 12 additional ProTips and comprehensive valuation metrics, subscribers can access the full Pro Research Report, available exclusively on InvestingPro.

In other recent news, ReShape Lifesciences Inc. has been actively making strategic moves to enhance shareholder value and ensure growth. The company’s third-quarter earnings for 2024 highlighted a 16.6% revenue increase, totaling $2.3 million, and a 6.4% year-over-year growth. ReShape Lifesciences has also amended the terms of its senior secured convertible note with institutional investor Ascent Partners Fund LLC, extending the note’s maturity date and adjusting the prepayment conditions.

A significant development includes the impending merger with Vyome Therapeutics, Inc., which aims to advance Vyome’s immuno-inflammatory assets and explore additional opportunities in the Indian innovation corridor and the U.S. market. ReShape Lifesciences has concurrently entered an asset purchase agreement with Biorad Medisys, contributing to the net cash consideration for the merger’s post-closing ownership allocation.

Despite these positive developments, ReShape Lifesciences has been notified by the Nasdaq Stock Market of an equity shortfall, putting its listing at risk. The company now has 45 days to submit a plan to regain compliance. These are among the recent developments that highlight ReShape’s proactive approach towards growth and compliance.

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