UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________
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): June 10, 2019
STRATA SKIN SCIENCES, INC.
(Exact Name of Registrant Specified in Charter)
|
Delaware
|
000-51481
|
13-3986004
|
|
(State or Other
|
(Commission File
|
(I.R.S. Employer
|
|
Jurisdiction of
|
Number)
|
Identification No.)
|
|
Incorporation)
|
|
|
|
|
5 Walnut Grove Drive, Suite 140, Horsham, Pennsylvania
|
19044
|
|
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
|
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))
|
Title of each class
|
Trading
Symbol(s) |
Name of each exchange on which registered
|
|
Common Stock, $0.001 par value per share
|
SSKN
|
The NASDAQ Stock Market LLC
|
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 June 10, 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 June 10, 2019.
Exhibit Index
|
Exhibit No.
|
Exhibit Description
|
|
99.1
|
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.
|
|
STRATA SKIN SCIENCES, INC.
|
|
|
|
|
|
|
|
|
Date: June 10, 2019
|
By:
|
/s/ Matthew C. Hill
|
|
|
|
|
Matthew C. Hill
|
|
|
|
Chief Financial Officer
|
|
|
EXHIBIT 99.1
June 2019 Investor Presentation Driving Value to Dermatology Partners Matching Patients with 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 revenue growth, product development, product extensions, product integration or product marketing; any statements regarding continued compliance with
government regulations, changing legislation, insurance or regulatory environments; any statements of expectation or belief and any statements of assumptions underlying any of the foregoing; any 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. In addition there are risks to statements relating to historical contingent
and potential liabilities related to sales and use taxes as well as potential derivative liabilities, the timing and outcome of the completion of our financial statements for the year ended December 31, 2018, the timing of the filing of form
10-K and the completion of the review of the quarter ended March 31, 2019, and regaining compliance with NASDAQ compliance requirements. 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 3 A Win-Win-Win CompanyFor patients – safest, most effective, no side
effectsFor clinics – stable increased revenue baseFor Payers – the least expensive treatment availableExcimer Laser Technology for Dermatology IndicationsPsoriasis, Vitiligo, Atopic Dermatitis and LeukodermaLarge Market Opportunity 35 Million
domestic patients – $6 Billion annual revenueTreatment modality use growing > 25%/year 25% target clinic penetrationUnique and Proven Business ModelBest in class XTRAC® and VTRAC ® Excimer Laser technologiesRecurring revenue driven by
DTCProviding “business in a box” for dermatology practicesGrowing Install base – low hanging fruit DTC – Direct To Consumer awareness and advertising
The Market Opportunity Over 35 million domestic and 100 million Global potential patients$6 Billion
domestic opportunityEstablished reimbursement rate$150-$250 reimbursement based on body surface area affected - 3 Excimer specific CPT Codes (96920, 96921, 96922) Average of 23 treatments per patient -Patient Lifetime Value ~ $4,000Proven
Double Digit Growth Over 25% annual procedure growthXTRAC is available in ~900 (out of 5000 clinical dermatology) clinics 4 Plaque Psoriasis Vitiligo Erythrodermic Psoriasis
Excimer laser use grew at ~30% annual rate in the US over last 15
years 5 Historical phototherapy utilization. Trend in phototherapy utilization among Medicare beneficiaries by billing code across all providers, 2000 to 2015. HCPCS, Healthcare Common Procedure Coding System; PUVA, psoralen plus ultraviolet
A; UVB, ultraviolet B. 30%
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 XTRAC used in optimal therapeutic dose (OTD) protocol that helps patients achieve Optimal Clinical Outcomes leading to increased Patient Retention 6
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 1,000 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 7
Partner academic institutes 8
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 150+ peer reviewed published clinical studies 9 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. Clinical Protocol – 6.2 treatments to PASI75
How XTRAC Works - Vitiligo 10 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
XTRAC Revenue Funnel 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 11
DTC advertisement is generating word of mouth for XTRAC through ‘Shares’ and ‘Comments’ 12
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 13 NYC, NJ, Long Island
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.1,300 OUS devices sold and in service Strategic Growth
Target 14
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 15
XTRAC creates significant recurring revenue for the partners CPT CODE Description 2018 National
AverageMedicare Payment Rate 96920 Laser treatment for inflammatory skin diseases, (psoriasis); total area less than 250 sq cm $168.12 96921 Laser treatment for inflammatory skin diseases, (psoriasis); total area between 250 – 500 sq
cm $184.32 96922 Laser treatment for inflammatory skin diseases, (psoriasis); total area greater than 500 sq cm $250.92 Number of Treatments / Weeks 20 30 # of Weeks / Year 48 48 Total # of Treatments / Year 960 1,440 Average
Revenue Per Treatment $186 $186 Physician Gross Revenue (Annual) $178,485 $267,728 Treatment Patient Type Reimbursement Details Annual Revenue per Patient Can be delegated** XTRAC Mild / moderate / severe CPT Code 96920-96922
($168-$251) average $186; 16 tx/course (2/yr) and Office Visit -$70 (2/Yr) $6,092 Phototherapy* Moderate / severe Office visit - $70 (2/yr) $140 X Biologics Moderate / severe Office visit - $70 (6/yr) $420 X Systemics Moderate /
severe Office visit - $70 (3/yr) $210 X Topicals Mild / moderate Office visit - $70 (3/yr) $210 X *Phototherapy Center Revenue – CPT Code 96910 $40 per tx; 30 tx/course (2/yr) - $2,400**Subjected to state legislation 16
Domestic Market: Installed Base Overview 754 Partner XTRAC clinics 150+ sold XTRAC 4 Regions 24
Sales Territories 15 Field Service Techs In-house call center to qualify leadsOnly one competitor in U.S. 17 Territories color coded
Proven Turnaround Strategy – Install Base and Utilization Growth * STRATA bought XTRAC business from
PhotoMedex in 2015 18 Note the numbers prior to Jan 1, 2018 do not reflect adjustments for the adoption of ASC 606 Q1 ’19 average revenue - 16% growth over Q1 ‘18
DTC – The Driver for Recurring Revenue Growth 19 Q1 ’19 qtr. revenue - 17% growth over Q1 ‘18 *
STRATA bought XTRAC business from PhotoMedex in 2015 Note the numbers prior to Jan 1, 2018 do not reflect adjustments for the adoption of ASC 606
Install Base Growth Drivers 20 1,570 clinics owned by 58 roll-up groups151 (9.5%) of which are XTRAC
partnersStrata signs strategic expansion agreements with major groups Expansion into roll-up groups Comebacks 300-400 Clinics own Excimer lasers Conversion to an XTRAC partner clinic = immediate revenue15 Comebacks in 2018 (compared to 4 in
2017)5 Comebacks in Q1 2019 754 1,570 151
Recent Financial Highlights Q1 2019Q4 2018Q3 2018 21 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 Total Revenue $8.1
million -4% versus Q4 2017 Recurring XTRAC Revenue $6.0 million +10% versus Q4 2017 Gross Margin 67% +17% versus Q4 2017 Dermatology Recurring Procedures Revenue Margin 73% +24% versus Q4 2017 Cash and Cash Equivalents $16.5
million Total Revenue $7.4 million +15% versus Q1 2018 Recurring XTRAC Revenue $5.3 million +17% versus Q1 2018 Gross Margin 62% +13% versus Q1 2018 Dermatology Recurring Procedures Revenue Margin 66% +9% versus Q1 2018 Cash and
Cash Equivalents $16.4 million
Financial Profile Shares and Share Equivalents – Market cap*- $77M (As of June 4, 2019) * On an as
converted basis of the convertible preferred stock** Does not include 2.1M warrants with a weighted average exercise price of $5.41 as of March 31, 2019 of which 1.4M expire by July 2019** Does not include 4.3M options with a weighted average
exercise price of $2.02 Common stock outstanding 31.1M Series C preferred shares* 2.5M Total** 33.6M 22
STRATA Investment Highlights 23 A Win-Win-Win CompanyFor patients – safest, most effective, no side
effectsFor clinics – stable increased revenue baseFor Payers – the least expensive treatment availableExcimer Laser Technology for Dermatology IndicationsPsoriasis, Vitiligo, Atopic Dermatitis and LeukodermaLarge Market Opportunity 35 Million
domestic patients – $6 Billion annual revenueTreatment modality use growing > 25%/year 25% target clinic penetrationUnique and Proven Business ModelBest in class XTRAC® and VTRAC ® Excimer Laser technologiesRecurring revenue driven by
DTCProviding “business in a box” for dermatology practicesGrowing Install base – low hanging fruit DTC – Direct To Consumer awareness and advertising
June 2019 Investor Presentation Driving Value to Dermatology Partners Matching Patients with
Clinics 24
Appendix 25
XTRAC helps patients Live Clear, Live Free… https://youtu.be/GdMBliZYy70 26
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 27
Financial Metrics 28 Note: all quarterly numbers are unaudited