Medicis To Acquire LipoSonix
Scottsdale, AZ and Seattle -- Medicis and LipoSonix, Inc. jointly announced they have entered into a definitive merger agreement under which Medicis will acquire LipoSonix, an independent, privately-held company with a staff of approximately 40 scientists, engineers and clinicians located near Seattle, Washington. As a result of the acquisition, Medicis will broaden its aesthetics portfolio pipeline with LipoSonix's body contouring technology. This completely non-invasive, focused ultrasound technology is designed to treat troublesome areas of fat which may not respond well to diet or exercise. LipoSonix recently launched its first product in Europe, where it is being marketed and sold through distributors. Subject to approval by the U.S. Food and Drug Administration (FDA), Medicis anticipates entering the potentially lucrative U.S. marketplace with the LipoSonix technology in the 2011 timeframe, if not sooner.
Under the terms of the transaction, approved by both companies' boards of directors, Medicis will pay stockholders upon closing $150 million in cash for all of the outstanding shares of LipoSonix. Medicis will fund the transaction from its existing cash balances. In addition, Medicis will pay LipoSonix stockholders certain milestone payments up to an additional $150 million upon FDA approval of the LipoSonix technology and if various commercial milestones are achieved on a worldwide basis.
"We are excited to announce this strategic merger, which will create a global opportunity for Medicis in the body contouring aesthetics market," said Jonah Shacknai, Chairman and Chief Executive Officer of Medicis. "Medicis is a clearly established leader in facial aesthetics. The Company established the modern facial filler category with RESTYLANE(R), and we expect to demonstrate similar innovation in the field of body aesthetics and contouring. Joining forces with LipoSonix provides us with an opportunity, subject to FDA approval, to offer physicians the ability to provide their patients with the most advanced technology for non-invasive reduction of fat. The LipoSonix technology, if approved by FDA, would provide the market with an alternative to invasive liposuction for targeted fat reduction. We believe many adults wanting to reduce fat in specific areas could be potential candidates for this procedure. Additionally, we believe entering this growing and potentially enormous worldwide market would add long-term value to our stockholders as we continue to strengthen our position in the aesthetics marketplace."
"We believe this merger provides both Medicis and LipoSonix with an exciting opportunity to effectively take our body sculpting technology to a global market by building on the success we have already achieved with a proven formula for leadership in aesthetics," said Jens U. Quistgaard, President and Chief Executive Officer of LipoSonix. "I am personally very excited to be collaborating with an organization that similarly values scientific discipline, integrity, and providing complementary and highly-effective products to customers and patients. This is a great alliance, and we look forward to a promising future of excellence."
Medicis will allocate the $150 million initial payment to the acquired assets of LipoSonix, including intangible assets, in-process research and development (R&D) and goodwill. Any portion of the purchase price that is identified as in-process R&D will be charged to earnings immediately upon the closing of the transaction. Medicis is in the process of completing a valuation to determine the amounts to be assigned to the acquired intangible assets, including their related amortization periods and the amount of in-process R&D. We currently anticipate with the incorporation of this transaction that the Company will continue to achieve gross profit margins in excess of 89%, selling, general and administrative (SG&A) margins of approximately 52%, and R&D margins of approximately 10% of increasing sales projections in 2009 and beyond. The Company will provide updated 2008 financial guidance upon the closing of the transaction and completion of the valuation work.
SOURCE: Medicis Pharmaceutical Corporation