SALE OF the assets of Serene Medical Pty Ltd
Gerbsman Partners (www.gerbsmanpartners.com) has been retained by Serene Medical Pty Ltd (www.serenemedical.com) to solicit interest for the acquisition of all, or substantially all, the assets of Serene Medical and its subsidiaries, further referred to as “Serene”, “Serene Medical” or “The Company”. Please see attached Exhibit A, NDA, Exhibit B, IP Portfolio, Exhibit C, Inventory and detail Sales Letter with Appendix.
Based in Brisbane, Australia, Serene is a radio frequency (RF) medical device/technology company that employs its patented platform transdermal delivery technology. The offering consists of Nuebelle Therapy for aesthetic surgeons and for migraine specialists.
Serene has raised approximately $35 million to date, with an initial $5 million focused on the clinical trials of the RF Technology. The majority shareholders are venture capital firms M.H. Carnegie & Co and January Capital.
The Serene assets include IP/patents (16 registered patents), clinical trial results, inventory and fixed assets.
Serene believes its assets are attractive for a number of reasons:
- Serene’s patented technology has been demonstrated in an IRB, multi-site clinical trial to improve the appearance of glabellar lines for greater than six months. This is a significantly longer duration than BOTOX®.
- The patented technology has application in the aesthetics and migraine markets.
- 16 registered patents and one pending (see attached for details).
- The Company has inventory of approximately 100 RF Generators, 1000+ probes (outside date for clinical use) and some manufacturing equipment that is used for packaging the sterile probes.
- Serene’s technology offers a toxin free alternative for the long-term reduction of glabellar lines.
- Large (>$2B) and growing (~5% annual rate) market.
- Physician revenue is >$4B (worldwide) for both aesthetics and migraine marketplaces, largely defined by BOTOX® (leading neurotoxin brand); >10M existing patients worldwide; ~10M more considering the treatment.
- The aesthetics market has no reimbursement risk as it is a user pays market.
- Clear regulatory path, clinical trial followed by FDA De Novo application.
- Both the aesthetics and migraine markets target a large patient pool, comprising a significant portion of consumers looking for a toxin free alternative to BOTOX®.
Serene History
The Serene technology has had approximately $35 million invested to date, with an initial $5 million focused on the clinical trials of the RF Technology. The majority shareholders are venture capital firms M.H. Carnegie & Co and January Capital.
Founded in 2006 as Advanced Cosmetic Intervention Inc. (ACI), all funds and operations were targeted at developing a unique treatment for glabellar lines. In 2008 Advanced Headache Intervention Inc. (AHI), was formed to exploit the technology in the treatment of migraine.
BioForm Inc. (BioForm) acquired ACI in late 2008 and furthered the development of the technology. More than $25 million was spent on the development and manufacturing of the technology. BioForm received FDA registration for the technology. BioForm was subsequently acquired by Merz Pharma (Merz) leaving the ACI technology orphaned. Serene was formed in 2010 and acquired the assets from Merz and AHI to commercialize the migraine and aesthetics technology.
Serene went on to raise over $10 million to conduct clinical trials and initiate commercial sales in the USA. An initial clinical trial of 78 patients was completed and formed the basis of an FDA De Novo application. This application was unsuccessful as the FDA required additional data. The venture capitalist investors are not in a position to continue to fund the commercialization of the Serene portfolio.
Serene has also expanded the use of the technology for the prevention and management of migraine. Preparation for clinical research into this application was planned for early 2020, however did not go ahead due to funding challenges. Work needs to be done to determine the effectiveness and the most lucrative go-to-market channel and strategy.
Over the past three years Serene has worked to protect the Intellectual Property around the use of the technology in the aesthetic and migraine applications.
IMPORTANT LEGAL NOTICE:
The information in this memorandum does not constitute the whole or any part of an offer or a contract.
The information contained in this memorandum relating to the Serene assets has been supplied by Serene. It has not been independently investigated or verified by Gerbsman Partners, its agents or any other adviser.
Potential purchasers should not rely on any information contained in this memorandum or provided by Serene, or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.
Serene, Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for any loss arising from the provision of, or any omission from, such information, including that contained in this memorandum, whether that loss arises by reason of Serene Medical’s or Gerbsman Partners’ negligence or otherwise.
Any sale of the Serene assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on behalf of Serene Medical, Gerbsman Partners or any other adviser. Without limiting the generality of the foregoing, Serene Medical and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the Serene Medical assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, or any implied warranties of habitability, merchantability, or fitness for a particular purpose.
This memorandum contains confidential information and is not to be made available to any person without Gerbsman Partners’ prior consent. This memorandum and the information contained herein are subject to the non-disclosure agreement attached hereto as Exhibit A.
Serene Medical History and Background
Aesthetic treatments using BOTOX® or other similar toxins have become increasingly popular around the world. There have been segments of the market not comfortable with injecting toxins and also looking for a solution that would have a longer lasting effect than the typical three months delivered by BOTOX®. A market need for an alternate non-toxic treatment was identified and created with the Serene Nuebelle RF technology.
The Serene RF System was originally developed by Advanced Cosmetic Intervention, Inc. (ACI) and cleared for marketing in the United States, under FDA 510(k) number K063753, as the GFX Nerve Ablation System. BioForm subsequently acquired the GFX Nerve Ablation System from ACI and a second FDA 510(k) submission was filed and cleared for software changes under K081729. Merz Pharma GmbH & Co later acquired BioForm and in 2011, Serene acquired the GFX Nerve Ablation System from Merz.
Clinical trials were conducted in 2015 that showed an effective reduction in the appearance of glabellar lines with the benefit lasting longer than 6 months on average. Serene submitted a De Novo application with the FDA for the registration of this clinical claim however it was rejected as the FDA required additional data to be included.
The clinical trial of 78 patients across 5 sites had excellent safety and efficacy data as shown below.
At this stage Serene has insufficient funds to restart the clinical trial, however the clinical plan is in place and additional clinical trials were planned to pursue the treatment of chronic migraine. A clinical trial was planned to investigate the impact of RF nerve ablation on chronic migraine starting in early 2020.
Impact of Bi-polar RF Technology
Bi-polar RF, the patented technology underlying all Serene products, is a very precise method of delivering uniform energy to a specific location. Combined with electrodes to stimulate the nerve the Serene dual-purpose Bi-polar RF probe is able to be accurately positioned near the target nerve to deliver a precise amount of energy that creates a lesion about the size of a grain of rice. This lesion results in a durable, toxin-free, long-term deactivation of target muscles.
Bi-polar RF Nerve Ablation offers the following benefits compared to BOTOX®:
- Toxin free.
- Longer duration.
- Procedure performed by clinicians.
- Free from adverse effects associated with BOTOX® such as eyelid ptosis, brow ptosis, nausea, tiredness, double vision, decreased eyesight, and allergic reaction.(1).
Intellectual Property
Serene’s technology is protected by multiple issued patents in the United States and under The Patent Cooperation Treaty (PCT) internationally.
To date Serene has 16 registered patents and one patent application is in progress, as set out in Exhibit B.
Product Offerings
Serene has developed a radio frequency (RF) technology platform that was cleared (FDA 510(k)) for locating motor nerves and creating a thermal lesion to inhibit nerve conduction. The Company’s products include a control unit with full temperature feedback and a dual-purpose disposable probe.
- Bi-polar RF Probe (dual purpose). The Company’s Bi-polar RF Probe has been designed to provide results that are more cumulative than immediate, administered by physicians with duration of effect lasting in excess of 6 months. The Company has begun building the market for these products initially in the US, targeting the country’s aesthetic medical practices. The Company believes that early penetration of this market will allow it to validate its offering with highest threshold of clinical scrutiny, supported by assessments in peer-reviewed medical journals, which have already commenced.
- Migraine Treatment. The Company has identified a significant opportunity in the chronic migraine market. A phase one study has been prepared to demonstrate the efficacy of the technology in the long-term prophylactic treatment of chronic migraine.
PRODUCT DIFFERENTIATION
Professional: The Company’s Bi-polar RF Nerve Ablation Procedure is a premium procedure delivered by surgeons. Represented in the USA by ~7,000 Plastic Surgeons, ~2,000 Facial Plastic Surgeons, ~1,200 Oculoplastic Surgeons and ~2,000 Dermatologic Surgeons.
Durability: Patients can benefit from the longer lasting effects of RF Nerve Ablation compared to the typically short (30-40 days) effective duration of BOTOX®.
Toxin-free: A survey relating to the willingness of women to undertake toxin injections showed 36% of women were concerned with the safety of neurotoxins and 18% of women were concerned with looking natural after the treatment.
Manufacturing
The products have all been manufactured by third party contract manufacturers in the USA. Full design documentation for the control unit and the Bi-polar RF probes will be available as part of the sale.
Regulatory
The Serene RF System design is identical to the system as cleared under FDA 510(k) numbers K063753 and K081729. The Serene RF System is composed of an RF Generator and a sterile, single-use RF Probe. The Serene RF System provides a minimally invasive technique for creating a neural lesion. The Generator and Probe are used as a system to both stimulate the nerve for the purpose of properly locating the probe and to create radiofrequency heat lesion in nerve tissue to inhibit or reduce nerve function. Stimulation energy is delivered, for example, to locate the nerve fibre that innervates a target muscle. During stimulation, the operator observes muscle movement. When the target muscle is stimulated, at the lowest possible current as assessed by the operator, the Probe is in the proper treatment location.
When the nerve is located and the probe is properly positioned, RF energy is delivered for the purpose of forming a lesion along the target nerve fiber. The thermal lesion induces a physiological response that inhibits conduction through the nerve, thereby decreasing muscle activity, which, for the proposed indication, results in the reduction of the appearance of dynamic wrinkles.
Clinical Trials – Subject to NDA and in Serene data room
In 2014/2015, the Company conducted a five-site, IRB approved clinical trial with Key Opinion Leader clinicians. The trial examined 78 patients healing after RF treatments and the reduction of the appearance of glabellar lines and wrinkles with a one-time application. Both provider and patient assessments were very positive and validated what the Company was seeing in their proof-of-concept testing.
Patients were followed up over a period of one year with the following results:
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Management Team and Advisors
Board of Directors:
Trevor Moody – Director (M.H. Carnegie & Co)
Paul Butler – Director (Former CEO Serene Medical)
Medical Advisory Board:
James Newman, MD, FACS – Premier Plastic Surgery, Palo Alto, CA
The Bidding Process for Interested Buyers
Interested and qualified parties will be expected to sign a non-disclosure agreement (attached hereto as Exhibit A) before they will be given access to key members of the management and intellectual capital teams and the due diligence “war room” documentation (the “Due Diligence Materials”). Each interested party, upon accessing the Due Diligence Materials granted to it, shall be deemed to acknowledge and agree: (i) that it is bound by the bidding procedures described herein; (ii) that it has an opportunity to inspect and examine the Serene Medical assets, to review all pertinent documents and information with respect thereto and raise such enquiries as it considers necessary; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Serene, Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all documents and reports provided to it have been provided solely for the convenience of the interested party, and Serene, Gerbsman Partners (and their respective, staff, agents, or attorneys) do not make any representations as to the accuracy or completeness of the same.
Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the Serene Medical assets. Sealed bids must be submitted so that the bid is actually received by Gerbsman Partners no later than Friday, August 20 2021, 3:00pm Pacific Standard Time (the “Bid Deadline”). Please also email steve@gerbsmanpartners.com with any bid.
Bids should identify those assets being tendered for in a specific and identifiable way. The attached Serene Medical Fixed Asset Schedule may not be complete.
Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase. All bids must be accompanied by a refundable deposit via check in the amount of US$100,000 (payable to Serene Medical). The winning bidder will be notified within 3 business days after the Bid Deadline. Non-successful bidders will have their deposit returned to them. Until a binding sale agreement is entered into, Serene Medical reserves the right to, in its sole discretion, accept or reject any bid without giving reasons for its decision, withdraw any assets from sale or choose not to proceed with the sale.
Serene Medical will require the successful bidder to close within 7 business days (or such later date as agreed to or notified by Serene Medical at its discretion). Any or all of the assets of Serene Medical will be sold on an “as is, where is” basis, with no representation or warranties whatsoever.
All sales and transfer taxes, stamp duty, goods and services taxes (GST) or similar taxes, if any, relating to the sale of the Serene Medical assets shall be payable by the successful bidder.
For additional information, please see below and/or contact:
Steven R. Gerbsman
Kenneth Hardesty
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