VERO stock exploded 41% higher in after-hours trading on June 16, 2020, after the company announced FDA 510(k) clearance and a large stake taken in the company.
On June 15, 2020, Venus Concept Inc. (“Venus Concept” or the “Company”) (NASDAQ: VERO), a global medical aesthetic technology leader, announced that it has received FDA 510(k) clearance to market and sell Venus Epileve. It is intended for treatment of hair removal, permanent hair reduction and pseudofolliculitis barbae.
Venus Epileve represents a new product introduction by Venus Concept to the U.S. aesthetics market that expands the Company’s diode laser hair removal offering beyond the Venus Velocity which was introduced to the medical aesthetics market in 2017. The Venus Epileve is cost-effective, fast, comfortable, and can be used on all skin types (Fitzpatrick skin types I-VI), including tanned skin. The Venus Epileve is a portable and versatile tabletop device that offers two modes of operation (SLIDE and PULSE) and a real-time cooling system aimed at ensuring patient safety and comfort. The Venus Epileve is integrated with Internet of Things (IoT) technology that collects technical information to help providers enhance business operations and improve treatment efficiency.
“Building on our recent launch of the Venus Epileve in Europe and Canada in the second quarter, we look forward to launching the Epileve the U.S. in the third quarter,” said Domenic Serafino, Chief Executive Officer and Director of Venus Concept. “We have established a strong presence in the laser hair removal market with our Venus Velocity, and we leveraged that technology to develop a new hair removal solution designed specifically for customers outside of the traditional market of dermatologists and plastic surgeons. The Epileve is a differentiated laser hair removal solution, at a price point that customers in the non-traditional market will find attractive, which expands our addressable market opportunity. We expect the commercialization of the Venus Epileve in the U.S., Canada and Europe to contribute to the Company’s long-term growth profile and believe our expanded portfolio of laser hair removal solutions will help us further penetrate the $1.4 billion global hair removal market1 in the years to come.”
On June 16, 2020, Venus Concept announced that it has entered into a common stock purchase agreement for up to $31 million with Lincoln Park Capital Fund, LLC (“Lincoln Park”), a Chicago-based institutional investor. Upon execution of the purchase agreement, Lincoln Park made an initial purchase of $1.0 million of common stock.
Under the terms of the purchase agreement, the Company will have the right, in its sole discretion, to sell shares of its common stock to Lincoln Park over the 24-month term of the purchase agreement. Any common stock sold to Lincoln Park will occur at a purchase price that is based on the prevailing prices of the common stock at the time of each sale. The Company will control the timing and amount of any shares of common stock sold to Lincoln Park, and Lincoln Park is obligated to make purchases at quantities and prices in accordance with the purchase agreement. Venus Concept’s sale of common stock is subject to various limitations including those set forth in the purchase agreement and the listing rules of Nasdaq.
“This agreement is a result of our efforts to enhance our balance sheet and we appreciate the partnership with Lincoln Park as we believe it reflects their confidence in our long-term growth opportunity,” said Domenic Serafino, Chief Executive Officer and Director of Venus Concept. “We have made substantial progress in our efforts to enhance our financial condition in recent months including the expected cost savings of approximately $38 million in 2020, and continuing into 2021, from both the restructuring program we announced in May, and the previously announced merger synergies and cost reductions. While the near-term outlook has been challenged by the COVID-19 global pandemic, we continue to believe the long-term opportunity remains extremely compelling for us as a leading player in both the global minimally invasive/non-invasive medical aesthetics market and the minimally invasive surgical hair restoration market.”
The Company intends to use any proceeds it receives under the purchase agreement for working capital and general corporate purposes. There are no warrants, limitations on use of proceeds, financial or business covenants, rights of first refusal, participation rights, penalties or liquidated damages in the purchase agreement. In consideration for Lincoln Park entering into the purchase agreement, Venus Concept issued 209,566 shares of its common stock to Lincoln Park as a commitment fee.
As part of the agreement, Lincoln Park has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of the Company’s common stock. The purchase agreement may be terminated by the Company at any time, at its sole discretion, without any cost or penalty.