The big idea of removing body fat through concentrated ultrasound waves hasn’t really caught on yet, but Hayward, CA-based Solta Medical is going to take a flier on it now.
Solta (NASDAQ: [[ticker:SLTM]]) said today it has agreed to pay $15 million up front, plus another $20 million in near-term payments, to acquire the Bothell, WA-based unit of Medicis Pharmaceutical that makes Liposonix ulrasound fat-busters. The payments to Medicis could increase if Solta can reach certain undisclosed worldwide commercialization goals over the next seven years, the companies said in a statement. Solta said it plans to maintain the Liposonix facility in Bothell.
The vision has always been to tailor ultrasound waves to bust up fat non-invasively. Done right, it would help tone up flabby tummies or thighs without subjecting people to the rigors of diet or exercise, and without the surgical risks of liposuction. The Liposonix technology has been in development for more than a decade, and Medicis paid $150 million to obtain it in June 2008. At the time of that deal, I noted here that Americans spent an estimated $13 billion in 2007 on cosmetic surgery and nonsurgical cosmetic treatments like Botox, according to the American Society for Aesthetic Plastic Surgery.
Liposonix attracted a big-name cast of investors, including The Carlyle Group, Versant Ventures, Shroder Ventures Life Sciences, and Accuitive Medical Ventures. In July 2004, Three Arch Partners, Delphi Ventures, Essex Woodlands Health Ventures and Pinnacle Ventures also participated in a $27 million round for the company.
But Liposonix has been unable to capture a big piece of the market, as it has been held up by various regulatory questions over time. Its product is now cleared for sale in Canada, the European Union and Japan, and was recently cleared by the FDA for non-invasive waist circumference reduction. The company is still awaiting word from the FDA on another regulatory milestone.
Medicis said it will continue to focus on its core business in dermatology, where it markets the popular anti-wrinkle product Restylane. Solta has grown through acquisitions to build a portfolio of medical aesthetic products, largely for the skin.
Solta said in today’s statement it expects the Liposonix deal to boost its profits within 12 months. It plans to discuss the acquisition on a conference call with analysts at 11:30 am Eastern/8:30 am Pacific today.
