8:00 am ET June 23, 2015 (Dow Jones) Print
MELA Sciences Acquires XTRAC and VTRAC Businesses From PhotoMedex, Inc.
Becomes a Multi-Product Medical Dermatology Business
Conference Call at 8:30am Eastern Time Today
IRVINGTON, N.Y., June 23, 2015 (GLOBE NEWSWIRE) -- MELA Sciences, Inc. (Nasdaq:MELA), today announced that it has signed and completed the purchase of the XTRAC and VTRAC Dermatology business from PhotoMedex, Inc. for $42.5 million in cash and the assumption of certain business-related liabilities. The purchase price includes all of the accounts receivable, inventory and fixed and intangible assets of the businesses. To fund the purchase price of the transaction, the Company has issued senior secured notes and convertible debentures equal to the transaction purchase price to certain investors. The XTRAC and VTRAC businesses generated $30.6 million in revenues in 2014.
Michael R. Stewart, President and CEO of MELA Sciences, stated, "This is a transformational event for MELA Sciences. As a result of this acquisition, MELA becomes a multi-product company with a single salesforce focused on meeting the needs of dermatologists for the diagnosis and treatment of serious dermatological conditions. The XTRAC laser in particular provides us with a recurring source of revenue that has been growing significantly over the past few years and is expected to generate sufficient cash flow to fund our ongoing operations beginning this year. This should enable us to continue our current commercialization efforts while growing the XTRAC and VTRAC businesses globally.
Added MELA Sciences Chairman, Jeffrey F. O'Donnell, Sr., "I am thrilled we have completed this acquisition as it transforms MELA Sciences into a sustainable commercial enterprise, providing it with a sales infrastructure, a synergistic product line and a positive-cash flow business platform on which to build a leading franchise in medical dermatology. Given Mike Stewart's previous experience running the XTRAC and VTRAC businesses at PhotoMedex, we look forward to a smooth transition with him as CEO of the combined businesses."
XTRAC is an ultraviolet light excimer laser system that has become a widely utilized treatment among dermatologists for the treatment of psoriasis, vitiligo and other skin diseases. The VTRAC Excimer Lamp system, offered internationally, provides targeted therapeutic efficacy demonstrated by excimer technology with the simplicity of design and reliability of a lamp system. In 2014, the acquired businesses generated $30.6 million in revenues, representing year-over-year growth of 41% and a gross profit of 60.1%. As of March 31, 2015, there were 640 installed XTRAC systems in the United States, up from 527 at the end of March 2014. There are approximately 7.5 million people in the U.S. and up to 125 million people worldwide suffering from psoriasis, and 1% to 2% of the world's population have vitiligo. In 2014, over 300,000 XTRAC laser treatments were performed on approximately 19,000 patients in the United States.
To finance the transaction, the Company entered into a securities purchase agreement with institutional investors in connectio
