STRATA Skin Sciences (SSKN) Announces Acquisition of the U.S. Dermatology Business of Ra Medical Systems

STRATA Skin Sciences, Inc. (NASDAQ: SSKN), a medical technology company dedicated to developing, commercializing, and marketing innovative products for the treatment of dermatologic conditions, today announced the acquisition of the U.S. dermatology business of Ra Medical.

The transaction immediately provides STRATA with the opportunity to market its full business solution to Ra Medical’s existing customer base of 400 dermatology practices, thus making way for STRATA to substantially increase its recurring revenue base in the future. It also provides a highly synergistic path to gain additional placements for STRATA’s XTRAC excimer laser system.

“As we sought opportunities to further drive our commercial growth through both organic and inorganic opportunities, Ra Medical's Pharos dermatology business stood out as an ideal fit, as the only other significant provider of excimer laser solutions available to the U.S. market for treating chronic skin diseases,” said Robert J. Moccia, Chief Executive Officer of STRATA Skin Sciences. “This transaction’s advantages include an opportunity to increase our current installed base by more than 40% as we welcome Ra Medical’s customers to our platform. Going forward, as we continue to prioritize commercial execution, we anticipate that there will be sufficient migration of the existing Ra Medical customers to our recurring business model, to positively impact our short and long-term growth.”

“In addition, we gain a sophisticated pipeline of potential customers with expired contracts. These dermatologists are already familiar with the benefits of excimer treatments and have a current patient base, reducing the standard startup time and training normally associated with onboarding new customers.

“Lastly, we expect to see an increase in our service contract revenue, as we successfully renew expiring service contracts,” concluded Moccia.

Under the terms of the agreement, STRATA will acquire Ra Medical’s dermatology business in an asset transaction for consideration consisting of an upfront cash payment of approximately $3.7 million for certain assets and the assumption of estimated customer warranty and service agreement liabilities and other assumed liabilities. The Company also signed a services agreement to cover services to be provided by Ra Medical.

Ra Medical’s Pharos excimer laser system is FDA-cleared and used as a tool in the treatment of chronic skin diseases, including psoriasis, vitiligo, atopic dermatitis and leukoderma. Ra Medical’s U.S. customer base includes more than 280 active service contract customers and approximately 150 currently inactive accounts. STRATA will provide the opportunity to the current Pharos customers to join the over 850 dermatology partners under the XTRAC recurring business model.

“STRATA is a great home for our dermatology partners,” said Will McGuire, Chief Executive Officer and Director of Ra Medical. “Their sole focus on the dermatology market and significant investment in supporting dermatologists, as well as patients seeking treatment for chronic skin diseases, made this a logical next step for both of our businesses.”

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