IPO FOCUS: Cellulite and Tattoo Removal IPO Begins Trading on the NASDAQ with only 2.2M Shares in the Float
While Wall Street has been busy focusing their attention on upcoming IPO’s like Uber, Lyft, Slack, Pinterest and a few others, we discovered a much smaller med-device company with a patented breakthrough acoustic shockwave device that just recently listed on the Nasdaq.
Here are some research highlights that we discovered:
Their acoustic shockwave device, which they refer to as Rapid Acoustic Pulse or RAP, is non-invasive and virtually painless (see example below).
- Majority owned by a member of the Hunt family of Hunt Petroleum. According to Forbes, the family’s net worth is around $13B.
- It originated at the MD Anderson Cancer Center, the world’s largest research center and they remain a shareholder of the company today.
- Their RAP device was just honored with the prestigious “Best in Session” award by the American Society for Laser Medicine and Surgery (ASLMS).
- Their RAP device received institutional review board (IRB) approval as a non-significant risk (NSR) device.
- Currently in a collaborative trial with a multibillion-dollar, global aesthetics company to test their RAP device’s ability to accelerate that company’s own fat reduction technology.
- They discovered in preclinical testing that their RAP device was able to affect the structures that result in cellulite and stimulate new collagen growth, therefore they believe it has the potential to reduce cellulite and skin laxity.
- They are currently in human clinical trials for the reduction of cellulite and expect to release that data shortly.
- Executive and science advisory teams, as well as their board of directors, are comprised of aesthetic and medical device experts, including senior management from the makers of CoolSculpting (the leading non-surgical fat reduction technology that was acquired by Allergan for $2.4B [$56 per share]).
- Their RAP device demonstrated the ability in clinical trials to remove tattoos in as little as 2 to 3 treatments versus the 10 to 12 industry average (tattoo removal market is predicted to hit $4.4B by 2023).
- Per their SEC filings, an FDA filing is expected by March 31, 2019.
- They’ve partnered with one of the world’s largest medical device manufacturers, Sanmina, to produce their equipment.
- In their IPO, they sold approximately 2.2M shares, which is a very small float. Float is the actual shares that are able to be traded in the public markets.
Soliton began trading on the Nasdaq in late February under the ticker symbol “SOLY”. They sold 2,172,591 shares of its common stock at the IPO price of $5.00 per share.
In the world of publicly traded companies, having a float of just over 2 million shares would be considered fairly small compared to a stock like Apple, which has a float of over 4.4 billion shares.
The snapshot of the company today is that over the past 5 years, with the help of some of the smartest engineering minds in the world and having spent over $25M on research and development, they have created a breakthrough rapid acoustic pulse (RAP) device that is designed to be used in conjunction with the current standard of care lasers to accelerate tattoo removal by 3 to 4 times faster than lasers alone.
What’s important to understand is that their RAP device, even though it may sound painful, creates little to no pain for the patient.
In their clinical trials, their device demonstrated the ability to remove tattoos in as little as 2 to 3 treatments versus the 10 to 12 industry average. Because of this, Soliton believes that they will ultimately become the new standard-of-care in this industry that is expected to crest $4B by 2023.
It’s hard to argue that fact when the industry average for removals take 3 to 4 times longer than with Soliton’s RAP device.
Because of this breakthrough in acoustic shockwave science, their device was recently honored with the prestigious “Best in Session” award by the American Society for Laser Medicine and Surgery (ASLMS).
Beyond the scope of tattoo removal, what they more recently discovered in preclinical testing, was that their RAP technology may also be able to reduce cellulite, a condition affecting over 90% of women.
Cellulite is believed to be the result of multiple factors. One of those factors is inadequate collagen structure in the dermis leading to a weakening of the dermal extracellular matrix (ECM). Excess subcutaneous fat can then protrude into the weak pockets within the ECM resulting in a mottled or lumpy appearance to the skin.
The cells in the body that are responsible for synthesizing collagen and helping to maintain a well-structured ECM are called “fibroblasts.” Soliton believes its RAP technology is capable of delivering a very compressed, high-pressure shockwave at repetition rates of up to 100 per second, providing the necessary mechanical stress to induce fibroblast production of collagen without pain, or patient downtime.
In preclinical testing, Soliton demonstrated that their RAP device is capable of consistently inducing the production of new collagen within the ECM of the dermis, therefore creating the potential for reducing the appearance of cellulite and skin laxity.
“The discovery that our proprietary rapid acoustic pulse technology has the potential to treat cellulite constitutes a potential game-changer for our company,” commented Dr. Chris Capelli, CEO of Soliton, Inc. “Preclinical research supported conducting a preliminary proof of concept clinical trial for the treatment of cellulite, which we are now close to completing.”
So, what are the next steps for Soliton?
Right now, they are in the process of conducting a proof-of-concept clinical trial targeting the cellulite indication.
The cellulite data from this human clinical trial is expected to be released before the end of Q2 2019.
What is also extremely intriguing to us and what is a must for our readers to understand, is who makes up their board of directors and their scientific advisory board.
Let’s start by learning about a company called ZELTIQ Aesthetics…
ZELTIQ was a publicly traded company that had one technology called “CoolSculpting” for the removal of subcutaneous fat. You’ve most likely seen their ads on TV or online promoting this “non-invasive” procedure, because they are everywhere.
CoolSculpting is the world’s leading non-invasive fat reduction technology and on February 13, 2017, Allergan (NYSE: AGN), one of the largest pharmaceutical companies in the world, with a current market cap of more than $45B, acquired ZELTIQ for $2.4B or $56 per share.
Since 2006, Allergan has sunk north of $8 billion into M&A in the aesthetics space, adding skin creams, double-chin treatments and, most recently, ZELTIQ’s fat-freezing business with CoolSculpting.
So, what does this mean for Soliton?
To begin with, two of their independent board members come from ZELTIQ. The first one is Brad Hauser and the second is Danika Harrison.
Mr. Hauser has served as the Vice President, R&D and General Manager for CoolSculpting at Allergan Pharmaceuticals since ZELTIQ was acquired by Allergan in early 2017. Previously, he served as the Senior Vice President of Research and Development at ZELTIQ from January 2017 to April 2017 and as its Vice President of Research and Development from July 2015 to January 2017. Mr. Hauser joined ZELTIQ in December 2013 as Vice President of Product and Clinical Strategy.
Ms. Harrison served as Senior Vice President of Global Marketing at ZELTIQ from January 2017 until it was acquired by Allergan in 2017, serving as its Vice President of Global Marketing from February 2016 and as VP of Consumer and Brand Marketing from November 2014.
What about their scientific advisory board?
Of the eight members that make up this board, seven are members of the CoolSculpting (ZELTIQ) Medical Advisory Board.
So, when it comes to building a board of advisors focused on the aesthetics space, we cannot imagine a better team than the one Soliton has put together.
If you add up just the indications that Soliton is targeting (tattoo removal, cellulite reduction, acceleration of subcutaneous fat removal), we’re talking an addressable market of over $10 billion.
Unlike a lot of aesthetics plays that we’ve seen, Soliton appears to be heavily rooted in science and they have the board members and advisors to validate that.
With 8 patent families and 38 patents issued and pending, this appears to be a technology platform that could one day make a lot of sense in the hands of one of the major players.
If you are considering taking a position in Soliton (NASDAQ: SOLY), we recommend visiting the following links to begin your due diligence process:
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