LITTLETON, Colo. - Vivos Therapeutics, Inc. (NASDAQ: VVOS), a medical device company focused on sleep-related breathing disorders, announced a strategic marketing and distribution alliance with a network of sleep treatment centers in Colorado. The partnership, which is expected to commence operations in July 2024, aims to expand the company's reach for its obstructive sleep apnea (OSA) appliances and is anticipated to contribute positively to Vivos' revenue growth.
This collaboration is part of a shift in Vivos' marketing and distribution approach and is expected to be the first in a series of similar alliances across the United States. The alliance will enable the offering of a full spectrum of OSA treatments, including Vivos' FDA-cleared CARE oral medical devices, to patients at two existing sleep treatment centers in Colorado.
Concurrent with the alliance, Vivos also closed a $7.5 million equity growth investment from New Seneca Partners, Inc., a private equity firm. This investment is intended to support the launch of the new strategic alliance and may aid in establishing further alliances. Seneca's investment includes purchasing common stock and warrants, and the firm has been granted observation rights on Vivos' Board of Directors.
Kirk Huntsman (NYSE:HUN), CEO of Vivos, expressed confidence that the alliance and investment would help the company progress toward profitability and potentially eliminate its cash burn. Seneca's Managing Director, Michael Skaff, echoed this sentiment, citing the effectiveness of Vivos' products and the potential for the new marketing model to increase revenue while reducing customer acquisition costs.
The alliance is based on a revenue-sharing model, and Seneca will also provide management advisory services to Vivos, participating in the net cash flow allocation from the alliance as part of the arrangement.
Vivos is known for developing the Vivos Method, a nonsurgical treatment for mild to severe OSA that has been effective in over 42,600 patients treated worldwide. The company also offers SleepImage diagnostic technology for home sleep testing.
This news is based on a press release statement.
In other recent news, Vivos Therapeutics, a medical company specializing in sleep apnea treatments, reported mixed results for the first quarter of 2024. The company's total revenue was $3.4 million, a decline from the same period in the previous year, due to decreased VIP enrollments and appliance sales. However, gross profit stood at $1.9 million with a 57% gross margin, and operating expenses were reduced by 22%, leading to a lower operating loss of $3.8 million for the quarter.
Despite the dip in revenue, Vivos Therapeutics remains optimistic about growth prospects, citing FDA clearance for severe sleep apnea treatment and new strategic initiatives aimed at expanding access to their products. It secured $4 million through a common stock purchase warrant exercise and aims to be cash flow positive by the end of 2024 or early 2025. The company is also pursuing new channel relationships to drive revenue and reduce burn.
These are recent developments that highlight the company's efforts to navigate financial challenges while focusing on strategic growth initiatives and cost management.
InvestingPro Insights
In light of Vivos Therapeutics, Inc.'s (NASDAQ: VVOS) recent strategic moves, a glance at the company's financial health and market performance offers additional context. According to InvestingPro data, Vivos has a market capitalization of $8.23 million, reflecting its size in the medical device sector. Despite the positive outlook from the alliance with Colorado sleep treatment centers, the company's P/E ratio stands at -0.24, signaling that investors are currently not expecting earnings from Vivos. This is further underscored by an adjusted P/E ratio for the last twelve months as of Q1 2024 at -0.53, indicating continued investor skepticism about near-term profitability.
The company's stock has experienced significant volatility, with a 21.43% return over the last week and a 20.0% increase over the last month. However, it's important to note that there has been a 44.08% decline over the last three months, and a stark 76.17% drop over the last six months, which may concern potential investors about the stock's stability. This volatility is reflected in the high Price / Book multiple of 14.14, suggesting that the stock is trading at a premium compared to the company's book value.
InvestingPro Tips highlight that Vivos is quickly burning through cash and that short-term obligations exceed liquid assets. This could be a point of caution for investors, as it may impact the company's ability to sustain operations without further financing. Additionally, Vivos does not pay a dividend, which might be a factor for income-focused investors to consider. For those interested in a deeper dive into Vivos Therapeutics, there are 13 additional InvestingPro Tips available, providing a comprehensive analysis of the company's financial position and market performance. To explore these insights, visit https://www.investing.com/pro/VVOS and remember to use coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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