Alliqua Biomedical Inc. 10.13.16
Alliqua BioMedical Inc., a regenerative technologies company, is acquiring Soluble Systems LLC. As part of the transaction, Soluble will contribute and transfer substantially all of its assets into a newly formed subsidiary of Alliqua (New Alliqua) and Alliqua will complete a holding company reorganization resulting in New Alliqua becoming the new public parent of Alliqua. New Alliqua will remain publicly traded and change its name to Alliqua BioMedical Inc.
Under the terms of the agreement, Soluble will receive $35 million, plus warrants to purchase 4 million shares of New Alliqua common stock at an exercise price of $1.07. In addition, Soluble will have the right to appoint one new director to the company’s board of directors. The transaction is expected to close in the first quarter of 2017.
Soluble markets and distributes a human skin allograft with living cells under the brand name, TheraSkin. Soluble employs a direct distribution model supported by approximately 40 selling resources that primarily target hospital and wound care customers in outpatient facilities, and generated more than $18 million in revenue during the first half of 2016.
“We could not be more excited to announce this transaction, as we believe the combination of Alliqua BioMedical and Soluble Systems will enhance our competitive position with a portfolio of regenerative solutions,” said David Johnson, CEO of Alliqua BioMedical. “I believe this transaction offers the opportunity to combine two regenerative technologies companies where the sum of their parts should be greater than the parts themselves. The combination of these companies presents many strategic and financial benefits, and I would like to highlight a few that I believe are the most compelling: Financially, the benefits from this combination are powerful. The organization’s commercial scale will increase dramatically, as the combined selling infrastructure will nearly double the size of Alliqua’s existing direct salesforce. We expect that broader U.S. direct sales coverage will drive rapid additional market penetration for all Alliqua products with the potential for cross-selling opportunities over time."
"Post-closing, the combined company’s financial profile should improve with a 2016 annualized revenue base estimated to be between $36 and $38 million, gross margins in excess of 70 percent, and significant operating margin benefits from synergies. Clearly, we believe this financial profile positions us with the requisite scale, a clear path to profitability and improving returns for our stockholders going forward," Johnson continued.
"Strategically, this transaction allows Alliqua to enhance both our portfolio of regenerative technologies, and our executive leadership team. Soluble’s TheraSkin is a cryopreserved human skin allograft, composed of living cells, fibroblasts, keratinocytes and a fully developed extracellular matrix. Mist Therapy, Biovance, Interfyl and now TheraSkin, will allow Alliqua Biomedical to offer clinicians a variety of clinically efficacious regenerative technologies for the treatment of challenging wound and tissue repair. Importantly, each of these solutions is supported by a compelling economic value proposition. In addition, I am pleased to announce that Allan Staley, the CEO and co-founder of Soluble Systems, and Woody Staub, the president of Soluble Systems, have each accepted management positions in charge of Alliqua’s Reimbursement and Payor Policy group and Alliqua’s new specialized surgical sales force, respectively, effective upon the closing of the transaction. Allan’s expertise in the regenerative technologies space is exceptional, as evidenced by the success to-date of TheraSkin. Similarly, Woody’s experience in the medical device and surgical sectors, with the likes of KCI, Mitek and J&J, should prove immensely valuable as we look forward to rapid market share growth of our regenerative technologies portfolio in the surgical market," Johnson concluded.
“Soluble Systems is excited to combine its excellent products and passionate employees with Alliqua to grow a great company together,” said Allan Staley, CEO of Soluble Systems.
The combined company’s headquarters will be based in Yardley, Pa.
Soluble’s TheraSkin product is a cryopreserved human skin allograft, composed of living cells, fibroblasts, keratinocytes and a fully developed extracellular matrix. TheraSkin is a U.S. Food and Drug Administration (FDA)-regulated HCT/P product to be used on all external acute and chronic wounds, including, but not limited to, diabetic foot ulcers, venous leg ulcers, pressure ulcers, burns, radiation injury, necrotizing fasciitis and for use over exposed muscle, tendon, bone and joint capsule. For the six-month period ended June 30, Soluble’s sales of TheraSkin was approximately $9.1 million, a 32 percent increase over the same period in 2015.
Cowen and Company LLC served as Alliqua’s exclusive financial advisor in connection with thr transactio while Canaccord Genuity Inc. served as Soluble’s exclusive financial advisor.
Alliqua currently markets the human biologic regenerative technologies, Biovance and Interfyl. The company also markets its Mist Therapy System, which uses painless, noncontact low-frequency ultrasound to stimulate cells below the wound bed to promote the healing process. In addition to these technologies, Alliqua markets its line of dressings for wound care under the SilverSeal and Hydress brands, as well as its TheraBond 3D advanced dressing which incorporates the TheraBond 3D Antimicrobial Barrier Systems technology.
In addition, Alliqua can provide a custom manufacturing solution to partners in the medical device and cosmetics industry, utilizing its hydrogel technology. The company has locations in Yardley, Pa., Langhorne, Pa., and Eden Prairie, Minn.
Soluble Systems manufactures and/or distributes advanced wound care products under the brand names TheraSkin and TheraGauze. Soluble’s patented SMRT Polymer technology is found in its advanced wound care dressing TheraGauze, which regulates moisture differentially across a wound bed to aid in wound healing without maceration. The company's corporate offices are located in Newport News, Va.
Under the terms of the agreement, Soluble will receive $35 million, plus warrants to purchase 4 million shares of New Alliqua common stock at an exercise price of $1.07. In addition, Soluble will have the right to appoint one new director to the company’s board of directors. The transaction is expected to close in the first quarter of 2017.
Soluble markets and distributes a human skin allograft with living cells under the brand name, TheraSkin. Soluble employs a direct distribution model supported by approximately 40 selling resources that primarily target hospital and wound care customers in outpatient facilities, and generated more than $18 million in revenue during the first half of 2016.
“We could not be more excited to announce this transaction, as we believe the combination of Alliqua BioMedical and Soluble Systems will enhance our competitive position with a portfolio of regenerative solutions,” said David Johnson, CEO of Alliqua BioMedical. “I believe this transaction offers the opportunity to combine two regenerative technologies companies where the sum of their parts should be greater than the parts themselves. The combination of these companies presents many strategic and financial benefits, and I would like to highlight a few that I believe are the most compelling: Financially, the benefits from this combination are powerful. The organization’s commercial scale will increase dramatically, as the combined selling infrastructure will nearly double the size of Alliqua’s existing direct salesforce. We expect that broader U.S. direct sales coverage will drive rapid additional market penetration for all Alliqua products with the potential for cross-selling opportunities over time."
"Post-closing, the combined company’s financial profile should improve with a 2016 annualized revenue base estimated to be between $36 and $38 million, gross margins in excess of 70 percent, and significant operating margin benefits from synergies. Clearly, we believe this financial profile positions us with the requisite scale, a clear path to profitability and improving returns for our stockholders going forward," Johnson continued.
"Strategically, this transaction allows Alliqua to enhance both our portfolio of regenerative technologies, and our executive leadership team. Soluble’s TheraSkin is a cryopreserved human skin allograft, composed of living cells, fibroblasts, keratinocytes and a fully developed extracellular matrix. Mist Therapy, Biovance, Interfyl and now TheraSkin, will allow Alliqua Biomedical to offer clinicians a variety of clinically efficacious regenerative technologies for the treatment of challenging wound and tissue repair. Importantly, each of these solutions is supported by a compelling economic value proposition. In addition, I am pleased to announce that Allan Staley, the CEO and co-founder of Soluble Systems, and Woody Staub, the president of Soluble Systems, have each accepted management positions in charge of Alliqua’s Reimbursement and Payor Policy group and Alliqua’s new specialized surgical sales force, respectively, effective upon the closing of the transaction. Allan’s expertise in the regenerative technologies space is exceptional, as evidenced by the success to-date of TheraSkin. Similarly, Woody’s experience in the medical device and surgical sectors, with the likes of KCI, Mitek and J&J, should prove immensely valuable as we look forward to rapid market share growth of our regenerative technologies portfolio in the surgical market," Johnson concluded.
“Soluble Systems is excited to combine its excellent products and passionate employees with Alliqua to grow a great company together,” said Allan Staley, CEO of Soluble Systems.
The combined company’s headquarters will be based in Yardley, Pa.
Soluble’s TheraSkin product is a cryopreserved human skin allograft, composed of living cells, fibroblasts, keratinocytes and a fully developed extracellular matrix. TheraSkin is a U.S. Food and Drug Administration (FDA)-regulated HCT/P product to be used on all external acute and chronic wounds, including, but not limited to, diabetic foot ulcers, venous leg ulcers, pressure ulcers, burns, radiation injury, necrotizing fasciitis and for use over exposed muscle, tendon, bone and joint capsule. For the six-month period ended June 30, Soluble’s sales of TheraSkin was approximately $9.1 million, a 32 percent increase over the same period in 2015.
Cowen and Company LLC served as Alliqua’s exclusive financial advisor in connection with thr transactio while Canaccord Genuity Inc. served as Soluble’s exclusive financial advisor.
Alliqua currently markets the human biologic regenerative technologies, Biovance and Interfyl. The company also markets its Mist Therapy System, which uses painless, noncontact low-frequency ultrasound to stimulate cells below the wound bed to promote the healing process. In addition to these technologies, Alliqua markets its line of dressings for wound care under the SilverSeal and Hydress brands, as well as its TheraBond 3D advanced dressing which incorporates the TheraBond 3D Antimicrobial Barrier Systems technology.
In addition, Alliqua can provide a custom manufacturing solution to partners in the medical device and cosmetics industry, utilizing its hydrogel technology. The company has locations in Yardley, Pa., Langhorne, Pa., and Eden Prairie, Minn.
Soluble Systems manufactures and/or distributes advanced wound care products under the brand names TheraSkin and TheraGauze. Soluble’s patented SMRT Polymer technology is found in its advanced wound care dressing TheraGauze, which regulates moisture differentially across a wound bed to aid in wound healing without maceration. The company's corporate offices are located in Newport News, Va.