HORSHAM, Pa., May 29, 2018 (GLOBE NEWSWIRE) -- STRATA Skin Sciences (NASDAQ:SSKN), a medical technology company in Dermatology and Plastic Surgery dedicated to developing, commercializing, and marketing innovative products for the treatment of dermatologic conditions, today announced that its shareholders have voted in favor of an equity financing, raising proceeds of $17 million. The financing was led by Accelmed Growth Partners (“AGP”), a private equity investment firm focused on value creation for medical device companies and technologies, through the establishment of platform companies. AGP was joined by current shareholders Broadfin Capital and Sabby Management, and incoming CEO, Dr. Dolev Rafaeli.
Financing Details and Amendment of MidCap Financial Trust Agreement
Of the $17 million in proceeds, $3 million will be used to pay down a portion of the current loan with MidCap Financial, as part of an amendment to the loan agreement that provides more favorable terms and covenants.
The remaining proceeds from the equity financing will fund growth opportunities for the Company by focusing on its core recurring revenue business and adding innovative medical devices, which can leverage STRATA’s salesforce, customer relationships and current infrastructure in sales, marketing and reimbursement.
Appointment of New Chairman of the Board of Directors
Following the closing of the financing, Dr. Uri Geiger, Managing Partner of Accelmed, will be appointed Chairman of the STRATA Board. Dr. Geiger brings extensive entrepreneurial, management and investment know-how having created and built many successful medical device enterprises. Among his many accomplishments, Dr. Geiger served as CEO and Founder of Exalenz Bioscience Ltd., and of GalayOr Networks, and is a founding partner of Dragon Variation Fund, as well as most recently the Chairman of Cogentix Medical.
Dr. Geiger stated, “We are excited to become the majority shareholder of STRATA and confident that the combination of Dr. Rafaeli’s leadership and Accelmed’s proven track record of creating successful medtech platform companies will provide tremendous value to patients, physicians and shareholders.”
Appointment of New Management with Experience in the XTRAC Business and Company Turnarounds
In conjunction with the closing of the financing, Dr. Dolev Rafaeli formally assumed the position of CEO, having served as the Company’s interim CEO since April, 2018. Dr. Rafaeli has over 25 years of experience in the healthcare, medical device, consumer and industrial services fields. Prior to STRATA, he served as CEO of PhotoMedex, the company that founded the XTRAC business, and served on its Board from 2006 to 2017. It was under his leadership that PhotoMedex achieved sales growth from $19 million to over $300 million, driven by increases in brand portfolio, distribution channels and M&A transactions. During his tenure, the XTRAC business grew by 335%, and the XTRAC business gross margins grew from 39% to 68%.
Dr. Rafaeli stated, “I am thrilled to lead STRATA at this extraordinary time. The XTRAC device is a best-in-class UV technology for the treatment of psoriasis, vitiligo and other skin conditions. Our business model is differentiated by a combination of clinical superiority, unique value-added services – including a direct-to-patient engine that accelerates awareness and drives consigned XTRAC device utilization – and a reimbursement support team that confirms insurance benefits, thereby expediting the patient experience.”
“Our immediate priority is to execute a comprehensive turnaround strategy to restore the growth potential of the business. The initial steps will include: 1) rebuilding the XTRAC business’ value creation proposition for our physician partner accounts, 2) improving patient retention through improved clinical outcomes and protocol compliance, and 3) re-engaging our proven direct-to-consumer, end-to-end patient acquisition strategy to drive more patients into the dermatology practices,” Dr. Rafaeli added, “We believe that stricter adherence to protocol compliance will lead to better clinical outcomes for patients, resulting in a higher patient retention rate for physicians. We also believe that our Optimal Therapeutic Dose (OTD) technology for XTRAC, currently in development, will jump start adherence to the preferred protocol, once deployed.”
“Our nationwide network of XTRAC partner clinics offers a significant opportunity to increase market penetration in psoriasis and to broaden our market penetration with other approved indications, including vitiligo and atopic dermatitis (eczema).” Dr. Rafaeli concluded, “Lastly, we are formulating a strategy that is expected to drive revenue growth outside the U.S., where we currently enjoy significant market penetration in such markets as China, South Korea and the Middle East, to name a few.”
The Company also announced the appointment of Matthew C. Hill as Chief Financial Officer, effective as of May 15, 2018. Mr. Hill brings to STRATA over two decades of experience in the medtech industry, having previously served as CFO of two publicly traded companies, Velcera, Inc. and EP Medystems Inc.
“I am thrilled to join STRATA at this exciting time and believe that the Company’s portfolio of skin science technologies has enormous potential,” said Matthew Hill, STRATA’s Chief Financial Officer. “I look forward to growing with the Company and working with the management team to help STRATA become one of the leaders in the dermatology space.”
About STRATA Skin Sciences, Inc. (www.strataskinsciences.com)
STRATA Skin Sciences is a medical technology company in Dermatology and Plastic Surgery dedicated to developing, commercializing and marketing innovative products for the treatment of dermatologic conditions. Its products include the XTRAC® excimer laser and VTRAC® lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions; and the STRATAPEN™ MicroSystem, marketed specifically for the intended use of micropigmentation.
