Photomedex Inc. develops manufactures and markets therapeutic excimer laser-based instrumentation designed to treat psoriasis and vitiligo. They are also developing their technology for the treatment of other skin disorders. They've received the first Food and Drug Administration or FDA approval to market an excimer laser system XTRAC system for the treatment of psoriasis. They have commercially launched the XTRAC system in the United States. PhotoMedex Inc. has a market cap of $12.2 million; its shares were traded at around $1.3599 with and P/S ratio of 0.4.
Highlight of Business Operations:The acquisition of the subsidiaries of Photo Therapeutics Group Ltd. was completed after December 31, 2008 and therefore SFAS No. 141R applies to the acquisition. Acquisition costs amounting to $1,532,798 and incurred through December 31, 2008 were expensed as of December 31, 2008; acquisition costs amounting to $432,353 and incurred in 2009 were expensed as of February 27, 2009.
Recognized treatment revenue for the three months ended March 31, 2009 and 2008 for domestic XTRAC procedures was $2,037,004 and $1,565,907, respectively, reflecting billed procedures of 35,744 and 28,819, respectively. In addition, 1,805 and 1,519 procedures were performed in the three months ended March 31, 2009 and 2008, respectively, without billing from us, in connection with clinical research and customer evaluations of the XTRAC laser. The increase in procedures in the period ended March 31, 2009 compared to the comparable period in 2008 was largely related to our continuing progress in securing favorable reimbursement policies from private insurance plans and to our increased marketing programs. Increases in procedures are dependent upon building market acceptance through marketing programs with our physician partners and their patients that the XTRAC procedures will be of clinical benefit and generally reimbursed.
We exclude all sales of treatment codes made within the last two weeks of the period in determining the amount of procedures performed by its physician-customers. Management believes this approach closely approximates the actual amount of unused treatments that existed at the end of a period. For the three months ended March 31, 2009 and 2008, we deferred net revenues of $347,417 (5,266 procedures) and $320,197 (4,891 procedures), respectively, under this approach.
For the three months ended March 31, 2009 and 2008, domestic XTRAC laser sales were $638,305 and $544,800, respectively. There were 14 and 10 lasers sold during these periods, respectively. Laser sales are made for various reasons, including costs of logistical support and customer preferences. We believe that we are able to reach a sector of the laser market that is better suited to a sale model than a per-procedure model at reasonable margins.
International sales of our XTRAC and VTRAC laser systems and related parts were $999,084 for the three months ended March 31, 2009 compared to $1,168,205 for the three months ended March 31, 2008. We sold 15 and 23 systems in the three-month periods ended March 31, 2009 and 2008, respectively. The average price of dermatology equipment sold internationally varies due to the quantities of refurbished domestic XTRAC systems and VTRACs sold. Both of these products have lower average selling prices than new XTRAC laser systems. However, by adding these to our product offerings along with expanding into new geographic territories where the products are sold, we have been able to increase overall international dermatology equipment revenues.
For the three months ended March 31, 2009, our skin care (“ProCyte”) segment revenues were $2,202,459 compared to $3,274,692 in the three months ended March 31, 2008. These revenues are generated from the sale of various skin, hair care and wound products and from the sale of copper peptide compound.
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