UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 26, 2019
STRATA SKIN SCIENCES, INC.
(Exact Name of Registrant Specified in Charter)
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Delaware
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000-51481
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13-3986004
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(State or Other
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(Commission File
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(I.R.S. Employer
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Jurisdiction of
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Number)
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Identification No.)
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Incorporation)
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5 Walnut Grove Drive, Suite 140, Horsham, Pennsylvania
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19044
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant's telephone number, including area code: 215-619-3200
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions:
☐ Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities
Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01 Regulation FD Disclosure
On February 26, 2019, Strata Skin Sciences
(the “Company”) posted an investor presentation to its website at http://investors.strataskinsciences.com/investors/home. A copy of the investor presentation is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall
not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed subject to the requirements of amended
Item 10 of Regulation S-K, nor shall it be deemed incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general
incorporation language in such filing. The furnishing of this information hereby shall not be deemed an admission as to the materiality of any such information.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
99.1 Strata Skin Sciences Investor Presentation dated February 26, 2019.
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Exhibit Index
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Exhibit No.
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Exhibit Description
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99.1
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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STRATA SKIN SCIENCES, INC.
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Date: February 26, 2019
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By:
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/s/ Matthew C. Hill
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Matthew C. Hill
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Chief Financial Officer
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February 2019 Investor Presentation Driving Value to Dermatology Partners Matching Patients and Clinics
This presentation includes “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995 that are subject to risks, uncertainties and other factors. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements of the
plans, strategies and objectives of management for future operations; any statements regarding product development, product extensions, product integration or product marketing; any statements regarding continued compliance with government
regulations, changing legislation or regulatory environments; any statements of expectation or belief and any statements of assumptions underlying any of the foregoing. In addition, there are risks and uncertainties related to successfully
integrating the products and employees of the Company, as well as the ability to ensure continued regulatory compliance, performance and/or market growth. These risks, uncertainties and other factors, and the general risks associated with the
businesses of the Company described in the reports and other documents filed with the SEC, could cause actual results to differ materially from those referred to, implied or expressed in the forward-looking statements. The Company cautions
readers not to rely on these forward-looking statements. All forward-looking statements are based on information currently available to the Company and are qualified in their entirety by this cautionary statement. The Company anticipates that
subsequent events and developments will cause its views to change. The information contained in this presentation speaks as of the date hereof and the Company has or undertakes no obligation to update or revise these forward-looking statements,
whether as a result of new information, future events or otherwise. Safe Harbor Statement 2
STRATA Investment Highlights Seasoned Management Team – with Deep Domain KnowledgeDr. Dolev Rafaeli, CEO
returns with the Accelmed transaction Excimer Laser Technology for Dermatology IndicationsPsoriasis, Vitiligo, Eczema, Atopic Dermatitis and Leukoderma Large Market Opportunity Over 35 Million available patients in the United States
alone Proven Strategy and Unique Business ModelBest in class XTRAC® and VTRAC ® Excimer Laser technologies Features stable base of recurring revenuePatient generation to dermatology practices using DTC techniques 3
XTRAC Revenue Growth Strategy 8n6 Protocol Treatment *RDX – Reimbursement Database XTRAC
(proprietary system) REOCCURRENCE DTC ADVERTISING ASSIGNING A DOCTOR PARTNER PATIENTAPPOINTMENT TREATMENT WIN WIN WIN DOCTOR PATIENT STRATA (AND PAYER) INTEREST
CREATION IN-HOUSE CALL CENTER INSURANCE ADVOCACY VERIFY APPOINTMENTPrescription of treatment VERIFY XTRACTREATMENT Clinic Appointments DTC Appointments RDX Fee Per Use 4
XTRAC DTC Advertising 5
Lead Generation is a Business Driver Patient leads in one quarterLeads turn into appointmentsAppointments
lead to XTRAC partner revenueOther revenue for the partner clinicRevenue for STRATA 6 NYC, NJ, Long Island
DTC Results – Lead generation – by quarter 2017 and 2018 7
The Market Opportunity XTRAC cleared in four indications PsoriasisVitiligoEczema and Atopic
DermatitisLeukodermaOver 35 million domestic patients3 CPT codes ($150 - $250 based on BSA)$170 average reimbursement rate per treatmentClinical Protocol – 6.2 treatments to PASI 75 Average of 23 treatments per patient lifetimePatient Life Time
Value ~ $4,000Codes 96920, 96921, 96922 PASI - A 75% reduction in the Psoriasis Area and Severity Index (PASI) score (PASI 75) is the current benchmark of primary endpoints for most clinical trials of psoriasis.BSA = Body Surface Area
affected 8 Plaque Psoriasis Vitiligo Erythrodermic Psoriasis Plaque Psoriasis
Excimer Laser Technology - XTRAC® / VTRAC® TechnologyXTRAC excimer laser uses highly targeted (308nm)
beam of UVB light to treat affected skin area without damaging surrounding tissueVTRAC is a lamp based 308nm laserTreatment avoids side effects, cost of biologics and messy topicalsTreatments are safe and efficaciousMultiple FDA 510(k) and other
international clearancesOver 500,000 patients treated Over 2,000 devices installed base WWCompelling partner clinic economicsXTRAC DTC provides a significant revenue sourceHalo effect of XTRAC DTC marketing platform Center of Excellence partner
clinic revenue approx. $500,000/year Charge revenue on a per-use basis 9
How XTRAC Works - Psoriasis After 4 tx After 2 tx Baseline Beam of UVB light applied to the affected
area UVB light induces apoptosis of the keratinocytes and T cells in the dermis Promotes immunosuppression Induces alterations in cytokine profile 140+ peer reviewed published clinical studies 10
How XTRAC Works - Vitiligo 11 Long-term skin condition characterized by patches of skin losing its
pigment Disease is believed to be due to genetic susceptibility where the autoimmune disease is then triggeredPotentially the immune system is attacking and destroying melanocytes of the skinLife-altering disease that leads to low self esteem UVB
light reduces the immune system’s attack on the melanocytes and enhances the migration and proliferation of melanocytes resulting in re-pigmentation EXCLUSIVE LICENSE FOR TREATMENT USING EXCIMER LASER
Domestic Market: Installed Base Overview 750 Partner XTRAC 138 sold XTRAC 4 Regions 22 Sales
Territories 15 Field Service Techs In-house call center to qualify leadsOnly one competitor in U.S. 12 Territories color coded
International Market: Installed Base OUS sales are through distribution with no current recurring
revenue model appliedMajor Markets – China, Japan, Saudi Arabia, South KoreaInsurance covered in most marketsUsage/device higher than domestic market – untapped potential in U.S.Over 1,200 OUS devices sold and in service Strategic Growth
Target 13
Turnaround Strategy DOMESTIC MARKET OUS MARKETS Enhance technology offeringExpand geographical reach
in certain markets Rebuild XTRAC value proposition for partner dermatologistsDTC is a revenue driver: Online and offline advertisement, in-house call centerPatient Communication: For both referrals and enrollment patientsPractice Development
Programs: increase prescriptions for XTRACOptimize Clinical Outcomes: Deploy Education for High Dose/OTD and 8N6 as driversCurrent Excimer owners – Revisit “Comeback Program” (>250 dermatologists “came back” to recurring revenue model between
2012-2014)Expanding installed base (location within 10 miles of every patient)Improving XTRAC market share across all disease indications Revenue = # of lasers x # of treatments/pt x # patients x cost/tx x recurrence factor 14
Transformative Transaction – “Back to the Future” Based on STRATA 10-k Annual Report; Dec 31, 2017 and
quarterly filings* STRATA bought XTRAC business from PhotoMedex in 2015 15 Note the numbers prior to Jan 1, 2018 do not reflect adjustments for the adoption Of ASC 606
Media Spend to Recurring XTRAC Treatment Revenue: The Opportunity Based on STRATA and PhotoMedex Investor
Presentations* STRATA bought XTRAC business from PhotoMedex in 2015 16
Financial Metrics 17
Comebacks – Important path to growing recurring revenue Existing excimer laser-sites: comeback drives
revenue quicker 18
Changing Dynamic in Healthcare – Clinic Roll-Ups* Mapped 1,570 PE and private national group roll ups 58
different groups identifiedXTRAC placement penetration 151** – 9.5% - Huge OpportunityAugust 20, 2018 – Company announces “Strategic Agreement with a Large Private Equity Backed Group of Dermatology Clinics”Additional agreements executed
since 19 * Company estimates 151 ** Of which 131 are recurring revenue
Current Clinical Protocol For Optimal Patient Outcomes: 8N6 Protocol 01 Twice a week: Minimum 8
visits in 6 weeks 02 Starting dose of at least 300 mj 03 Increase Dose over Time 04 Patient Returns: At least 8 visits per patient 05 …and management of the database to track results 20
Maximizing Dermatologist Partner Clinical Revenue Data collected directly from the lasers demonstrates the
importance of following treatment guidelines Revenue = # of lasers x # of treatments/pt x # patients x cost/tx x recurrence factor 21
Optimal Therapeutic Dose (“OTD”) – 510(k) Received August/2018The Path to Optimal Clinical Outcomes
and Patient Retention MECHANISMTip applies 4 simultaneous doses of energy to the patient’s plaque PURPOSETo minimize number of treatments to clearance USEDose allows provider to determine blister threshold unique to each patient and each
plaque. 510(k) submission Approved Baseline After 2 tx Clinical Studies 22
Recent news OTD Clinical Study92% of the included participants responded to treatment by achieving a
reduction in mPASI score of 75% or moreCompared to current average of 16-20 treatments with NB-UVB 308nm devices, OTD treatment produced statistically significant mPASI improvement by the second treatment It took an average of four sessions for
patients to reduce mPASI by 50% or more relative to baselineStatistical survival models predict mPASI scores to stay below 50% of baseline for 78 daysS3 Launch Smaller, Faster, Smarter Exclusively pairs with the OTD ApproachAllows physicians to
maximize results efficiently Aggressive IP strategy Vitiligo patent license from Mt SinaiXTRAC trademark enforcement 23
Strong Leadership Team 24 Dr. Uri Geiger Chairman of the Board Dr. Dolev Rafaeli Chief Executive
Officer Matthew C. Hill Chief Financial Officer Dr. Daniel Siegel Consultant
XTRAC used by leading teaching institutions
Recent Financial Highlights Q2Q3 26 Total Revenue $7.5 million +17% versus Q1 2018 Recurring XTRAC
Revenue $5.2 million +15% versus Q1 2018 Gross Margin 54% +5% versus Q1 2018 Dermatology Recurring Procedures Revenue Margin 64% +7% versus Q1 2018 Total Revenue $7.9 million +8% versus Q3 2017 Recurring XTRAC Revenue $5.6
million +1% versus Q3 2017 Gross Margin 61% +6% versus Q3 2017 Dermatology Recurring Procedures Revenue Margin 68% +6% versus Q3 2017 Cash and Cash Equivalents $15.9 million +$1.5 million versus Q2 2018
Financial Profile Shares and Share Equivalents – Market cap*- $109M (As of Feb 19, 2019) * On an as
converted basis of the convertible preferred stock** Does not include 2.4M warrants with a weighted average exercise price of $5.22 as of September 30, 2018 of which 1.6M expire in the first 7 months of 2019** Does not include 4.4M options with a
weighted average exercise price of $2.06 Common stock outstanding 31.0M Series C preferred shares* 2.6M Total** 33.6M 27
STRATA Investment Highlights Seasoned Management Team – with Deep Domain KnowledgeDr. Dolev Rafaeli, CEO
returns with the Accelmed transaction Excimer Laser Technology for Dermatology IndicationsPsoriasis, Vitiligo, Eczema, Atopic Dermatitis and Leukoderma Large Market Opportunity Over 35 Million available patients in the United States
alone Proven Strategy and Unique Business ModelBest in class XTRAC and VTRAC Excimer Laser technologies Features stable base of recurring revenuePatient generation to dermatology practices using DTC techniques 28
February 2019 Investor Presentation Driving Value to Dermatology Partners Matching Patients and Clinics
Appendix 30
XTRAC is to excimer what Xerox is to photocopy Over 150 peer-reviewed published
clinical-studiesMultiple academic institutes in U.S. use XTRAC Over 2,000 device installed base worldwideOver 1000 dermatology practices in the U.S have XTRAC providing device access to over 3,000 dermatology providers Over 5 Million treatments
performedMore than 500,000 patients treated Best in class excimer technologyLatest product launched in 2018 with advanced featuresOnly platform with Vitiligo and OTD protocol 1 4 2 3
Multicenter Psoriasis Study1 Scalp Study3 124 patients were enrolled and 80 completed the protocol.
72% achieved at least 75% clearing in an average of 6.2 treatments. 84% of patients reached improvement of 75% or better after 10 or fewer treatments. 50% of patients reached improvement of 90% or better after 10 or fewer treatments. Common side
effects included erythema, blisters, hyperpigmentation, and erosions, but were well tolerated. All patients improved. 17/35 (49%) of patients cleared>95% (mean: 21 treatments; range: 6-52) and 16/35 (45%) cleared 50-95%. Conclusion - The
excimer laser is a successful approach to treatment of psoriasis of the scalp being a simple treatment that can be performed in a short period of time and which has a high rate of effectiveness. Sample studies from 150+ clinical
studies Vitiligo Study2 Out of 221 vitiligo patches treated, 50.6% showed 75% pigmentation or more, 25.5% achieved 100% pigmentation of their patches, and 64.3% showed 50% pigmentation or more. Lesions on the face responded better than
lesions elsewhere. Conclusion: The 308-nm xenon chloride excimer laser is an effective and safe modality for the treatment of vitiligo, with good results achieved in a relatively short duration of time Pediatric Study4 4 children with a mean
age of 11.0 years and 12 adults with a mean age of 48.8 years completed the protocol. Both the children and the adult groups yielded a significant decrease in psoriatic severity scores of their respective target lesions. The children’s group had
a greater reduction (91.3% reduction) as compared to the adult treatment group (61.6% reduction). 1Multicenter Psoriasis Study - Feldman SR, Mellen BG, Housman TS, Fitzpatrick RE, Geronemus RG, Friedman PM, Vasily DB, Morison WL. Efficacy of
the 308-nm excimer laser for treatment of psoriasis: Results of a multicenter study. J Am Acad of Dermatol; vol. 46, no. 6, June 2002, pp. 900-906 2Vitiligo Study - Suhail Hadi, Patricia Tinio, Khalid Al-Ghaithi, Haitham Al-Qari, Mohammad
Al-Helalat, Mark Lebwohl, and James Spencer. Photomedicine and Laser Surgery. Treatment of Vitiligo Using the 308-nm Excimer Laser. Jun 2006.ahead of printhttp://doi.org/10.1089/pho.2006.24.3543Scalp Study - Morison WL, Atkinson DF and Werthman
L. Effective treatment of scalp psoriasis using the excimer (308nm) laser. Photodermatol Photoimmunol Photomed 2006; 22: 181-1834Pediatric Study - Pahlajani N, Katz BJ, Lonzano AM, Murphy F and Gottlieb A. Comparison of the Efficacy and Safety of
the 308nm Excimer laser for the Treatment of Localized Psoriasis in Adults and in Children: A Pilot Study. Pediatric Dermatology Vol. 22 No. 2, March/April 2005, pp. 161-165Induration Protocol Study - Taneja A, Trehan M, Taylor C. 308-nm Excimer
Laser for the Treatment of Psoriasis – Induration-Based Dosimetry. Arch Dermatol, Vol. 139, June 2003, pp. 759-764High Dose Protocol Study - Michael Abrouk,1 Ethan Levin,2 Merrick Brodsky,1 Jessica R Gandy,1 Mio Nakamura,2 Tian Hao Zhu,3 Benjamin
Farahnik,4 John Koo,2 and Tina Bhutani2 Excimer laser for the treatment of psoriasis: safety, efficacy, and patient acceptability. Published online 2016 Dec 12. doi: 10.2147/PTT.S105047
Continuous technology investment and business growth 510 (K) FDA
Approval AL-7000 Ultra Velocity 400 Velocity 700 Velocity 7 Series S3 2000 2005 2008 2010 2014 2018 CPT code Approval DTC platform creation 510 (K) FDA Approval (MMD)* Full Insurance
Reimbursement 2012 *MMD tip is a diagnostic accessory for XTRC used in optimal therapeutic dose (OTD) protocol that helps patients achieve Optimal Clinical Outcomes leading to increased Patient Retention
Patient Rebate Program Up to $500 Toward Out-of-Pocket Costs www.xtrachelps.com
Practice development program In Office Patient Education Materials for psoriasis, vitiligo & atopic
dermatitis:Patient BrochuresCounter CardsIn Office Branding“Patient-Directed” marketing initiative:Patient Education MailingsOutreach ProgramsEblasts