UPDATE: Aug. 11, 2021: The Federal Trade Commission has sent a "second request" for additional information and documentary material as part of its review of Allergan Aesthetics' proposed $550 million deal to acquire Soliton, according to a 8-K form filed with the Securities and Exchange Commission.
Allergan Aesthetics, part of AbbVie, and Soliton received second requests from the FTC which will extend the waiting period until 30 days after both companies "have certified substantial compliance," states Soliton's SEC filing. FTC's request for additional information, which comes three months after Allergan announced its agreement to buy Soliton, is part of a deeper probe than its standard review of M&A deals.
Soliton said in its SEC document that the two companies continue to expect to complete the transaction in the second half of 2021. However, FTC warned last week that it has been hit by a "tidal wave" of merger filings and that "companies that choose to proceed with transactions that have not been fully investigated are doing so at their own risk."
Allergan Aesthetics has struck a $550 million deal to acquire Soliton for its newly launched tattoo removal and cellulite treatment.
The device, Resonic, uses high-frequency sound waves to fade tattoos and drive short-term improvements in the appearance of cellulite. Soliton announced in late April that it received special 510(k) clearance, and the company began rolling out the product in recent weeks.
- Allergan Aesthetics, part of AbbVie, is now set to take over commercialization of the device, although it faces opposition from law firms that argue the deal may undervalue Soliton.
Soliton is built on a technology called Rapid Acoustic Pulse. Using the technology, Resonic delivers up to 100 pulses of high-pressure acoustic waves a second. The pulses disrupt cellular structures and connective tissue.
Allergan Aesthetics focused on the cellulite applications of the technology in its statement to disclose the takeover. In that context, Resonic is designed to impact the fibrous septae beneath the skin that are a driver of the appearance of cellulite dimples. More than 90% of participants in a clinical trial of Resonic said the device improved their cellulite.
Carrie Strom, president of global Allergan Aesthetics, said in a statement that "there is a huge unmet need to address cellulite and effective treatments have been elusive and frustrating for consumers." Strom sees Resonic as complementary to Allergan Aesthetics' portfolio of body contouring treatments.
Allergan Aesthetics will apply the commercialization infrastructure it has built up to support products such as CoolSculpting Elite to the rollout of Resonic. Walter Klemp, executive chairman at Soliton, noted Allergan Aesthetics' commercial capabilities in explaining the thinking behind the deal.
Soliton's stock rose 25% after the release of the news to settle around 20 cents below the $22.60 a share takeover price. The offer is 350% above the price of Soliton's 2019 IPO but has already received pushback in some quarters. WeissLaw and other law firms are investigating the takeover, in part on the grounds that the offer is below the median analyst price target of $25.
While Allergan Aesthetics focused on the cellulite applications of Resonic in its statement, the device is also cleared for use in tattoo removal, a market expected to grow at a compound annual growth rate of 19.3% through 2027. Soliton has shown using the device as an accessory to a Q-Switched laser fades tattoos by up to 44% in a single session and enables tattoo removal in as few as three sessions.