Medicis Pharmaceutical Corporation (Medicis) and Solta Medical, Inc. announced that the two companies have entered into a Stock Purchase Agreement for Solta to acquire all of the outstanding shares of Medicis Technologies Corporation (formerly LipoSonix, Inc.), a subsidiary of Medicis.
Under the terms of the agreement, Solta will pay to Medicis $15 million upon closing, up to $20 million upon the achievement of a near-term US Food and Drug Administration (FDA) regulatory milestone and certain additional future contingent payments based upon, among other things, the achievement of specified year–to–year increases in the worldwide commercial performance of the Liposonix technologies. Solta´s obligation to make these additional future contingent payments expires after approximately 7 years. Additionally, Solta will be responsible upon closing for the Bothell, Washington, facility, and has expressed the intent to maintain the Bothell facility and integrate it into its existing worldwide operations. Solta will also assume upon closing Medicis´ obligations to make future contingent payments under the acquisition agreement between Medicis and the former shareholders of LipoSonix, Inc. The transaction is subject to customary closing conditions, including clearance under the Hart–Scott–Rodino Act.
“We are pleased to announce this transaction with Solta,” said Jonah Shacknai, chairman and chief executive officer of Medicis. “We believe Solta, with its specialization in capital equipment among other things, is well-suited to commercialize the novel Liposonix technologies worldwide. Medicis continues to believe the worldwide market for fat ablation is attractive and lucrative. We look forward to Solta´s commercial success, as we remain focused on our core heritage of medical dermatology and facial aesthetics. We thank our employees who have worked so diligently on the Liposonix technologies. Their tremendous contributions have made possible our progress in the rapidly growing worldwide body contouring market.”
“The addition of Liposonix to the Solta Medical family illustrates our strategy to broaden our portfolio of superior aesthetics solutions. As the current industry leader in skin resurfacing and tightening, Solta will expand into the large and growing market for the non-invasive destruction of fat,” said Stephen J Fanning, chairman of the Board, president and CEO, Solta. “The transaction fits extremely well with our existing product offerings as well as with our business model, given the Liposonix system includes a disposable component that will complement Solta´s recurring revenue profile. With a focus on high–end dermatologists and plastic surgeons, the Liposonix product line is a natural extension of the premier solutions our global sales force is currently selling. Our goal is to extend the cross–selling success that we have enjoyed with the Thermage and Fraxel brands to the second generation Liposonix brand. Finally, we anticipate that the transaction will be accretive within 12 months of its completion.”
The transaction is expected to close during the fourth quarter of 2011. Solta expects to fund the acquisition through existing cash balances and credit facilities.
The Liposonix system is currently marketed in Canada, the European Union and Japan, and was recently cleared by the FDA for non–invasive waist circumference reduction. Medicis announced plans in February to explore strategic alternatives for the Liposonix business, including, but not limited to, the sale of the stand–alone business, as Medicis focused on its core heritage of medical dermatology and facial aesthetics. The Liposonix business was classified as a discontinued operation for financial statement reporting purposes beginning in the first quarter of 2011. Medicis will continue supporting existing Liposonix customers worldwide until Solta assumes this responsibility after closing. Deutsche Bank Securities Inc. acted as financial advisor to Medicis on the transaction.
The Liposonix system was evaluated in a multi-centre, randomized, sham–controlled, single blind study. Treatment with the Liposonix system was shown to be superior to a sham control in reducing waist circumference, meeting the pre–specified primary endpoint of the study. The 59 J/cm2 treatment group demonstrated an approximately 1 cm greater waist circumference reduction as compared to sham. On average, the mean change in waist circumference of approximately 2.6 cm (1 inch) compared to baseline was demonstrated in the 59 J/cm2 treatment group. This could equal one dress or pant size.
The safety of treatment with the Liposonix system was assessed through 24 weeks post–treatment. Safety was assessed by monitoring adverse events, results from a pre–specified battery of blood tests and physical examinations. The adverse events resulting from treatment with the Liposonix system during this study included procedural pain, post–procedural pain, bruising and swelling. These were mostly mild, short–lived in duration, and resolved without incident. There were no serious adverse events or unanticipated adverse device effects related to treatment with the investigational device.
The Liposonix treatment is not intended as a replacement for liposuction surgery or a healthy lifestyle, or a way to lose weight, but as a non-invasive, non-surgical approach to aesthetic waist circumference reduction when diet and exercise are not enough. According to the American Society for Aesthetic Plastic Surgery (ASAPS), liposuction represented the second highest number of surgical cosmetic procedures in 2010 with over 280,000 procedures. This equates to a combined US market of over $1.6 billion for liposuction and abdominoplasty.
The Liposonix system technology was developed over a period of 10 years by leading scientists and ultrasound experts with more than 200 years of combined experience in the development of therapeutic and diagnostic ultrasound devices.
The Liposonix system uses advanced High–Intensity Focused Ultrasound (HIFU) technology to permanently destroy targeted fat just beneath the skin in the treatment areas of the abdomen and flanks as a non-invasive, non-surgical approach to aesthetic waist circumference reduction. Clinical studies conducted by Medicis Technologies Corporation showed an average waist circumference reduction of approximately 2.6 cm after a single treatment with the Liposonix system. Results are typically seen in 8 to 12 weeks.
The Liposonix treatment is not a replacement for liposuction surgery or a healthy lifestyle, or a way to lose weight. No special diet or exercise program is required. The system has a well–defined safety profile. There is no need for anaesthesia.
The Liposonix treatment may pose certain risks and may not be suitable for everyone. System is intended for adults over 18 years of age who have at least 1.0 cm of fat thickness beyond the selected treatment focal depth of the system in the area to be treated. The most frequently reported side effects during the Liposonix treatment are: discomfort, pain, cold, prickling, tingling or warmth. The most frequently reported side effects after the Liposonix treatment, when used as recommended, are: pain (discomfort), bruising, redness and swelling, which are generally described (or rated) as mild. You should not have the Liposonix treatment if you are pregnant or think you may be pregnant. The Liposonix treatment is available only from a qualified healthcare professional.
Medicis is the leading independent specialty pharmaceutical company in the United States focusing primarily on the treatment of dermatological and aesthetic conditions.
Solta Medical, Inc. is a global leader in the medical aesthetics market providing innovative, safe, and effective solutions for patients that enhance and expand the practice of medical aesthetics for physicians.