STRATA Skin Sciences, Inc. (SSKN) Earnings Call Transcript & Summary

Welcome to the STRATA Skin Sciences key opinion leader event. My name is Rich Cockrell, the President of CG Capital, a Capital Markets advisory firm, focused on micro and small cap companies in the health care space. I will be moderating the call for today. I'm excited about our inaugural KOL event because I believe this company is one of the most undervalued names in our client portfolio. STRATA Skin Sciences is a medical technology company focused on the therapeutic and aesthetic dermatology market. Its products include XTRAC laser, VTRAC, [indiscernible] lamp systems, and their TheraClearX utilized in the treatment of psoriasis, vitiligo and other skin conditions. We are here today with Bob Moccia, who has joined the company as of March of 2021. Bob is an operator. He has more than 20 years of executive management experience as President, CEO and COO of small to midsize spec pharma companies and over 35 years of global pharmaceutical companies. His expertise in general management operations, strategic planning, business development, product development, sales, marketing and building customer-focused organizations. He cofounded Encore Dermatology. And prior to that, Bob was the CEO of Precision Dermatology. That was later sold to Valeant in 2014. He has completed multiple licenses, acquisitions, partnerships in the dermatology space. Mr. Moccia has held executive management positions at Medisys Pharmaceuticals as the Vice President of Corporate Development; Graceway Pharmaceuticals as President and COO; and Biolin Pharmaceuticals as President. He has also spent time at Dermik, and Stifel Laboratories in sales and marketing and business development. Bob has marketed and launched over 30 dermatological products in the U.S. and has created over $1.2 billion of exit transactions. Now during today's event, we'll first hear from Bob, who will provide a business update addressing the company's current and future growth plans. We'll then hear from doctors Nazareth of Western New York Dermatology and Dr. Hamzavi of Hamzavi Dermatology regarding STRATA's leading device for the treatment of psoriasis, eczema and vitiligo. And for the TheraClearX session, we'll hear from Dr. Bhatia of Oak Dermatology and Dr. Cohen of about skin dermatology on STRATA's newest device, TheraClearX for the treatment of mild to moderate acne. After each session, we will open up the call for Q&A. Now to ask a question, please tap your question into the Q&A box, which can be found in the lower left-hand section of your screen. I'd like to thank today's physicians for their time for which they've been compensated pursuant to their respective consulting agreements. Now before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meanings of the federal securities laws, which are pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call do not relate to matters of historical facts or to expectations or predictions of future events, results or performance. These are deemed as forward-looking statements. All forward-looking statements included without limitation, those relating to the company's trends and future financial performance are based upon current estimates and various assumptions. These statements involve risks, material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of risks and uncertainties associated with the company's business, please refer to the Risk Factors section of its public filings with the SEC, including the company's annual report on Form 10-K for the year ended December of 2022. This webcast contains time-sensitive information and is accurate only as of the live broadcast today, September 20, 2023. STRATA disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information or future events otherwise. And with that, I'll turn the call over to Bob, CEO of STRATA. Bob, the floor is yours.

Thank you, Rich. And I'd like to send a special thank you to our distinguished panel today for dermatologists, Dr. Nazara, Dr. Hamzavi, Dr. Bhatia and Dr. Cohen for their time. And I think you're going to find them extremely knowledgeable about our devices, and we'll give you some good background on how they use them in their practices. As Rich mentioned, STRATA Skin Science is a medical technology company dedicated to developing cutting-edge solutions in in-office treatment of life-altering skin conditions. We address large market opportunities in a number of medical indications, about a $38 billion market overall. Our treatment focus is in 4 areas, psoriasis, Vitiligo, eczema and acne. We have 2 FDA main product devices, XTRAC, which is an FDA-approved 308-nanometer laser for the treatment of psoriasis, atopic dermatitis and vitiligo and TheraClearX, which is also FDA approved and indicated for acne. We are the global leader in dermatology eczema laser, and I'll talk a little bit about our international distribution in a later slide. We have a very experienced management team with over 20 years of history in dermatology in sales and marketing and business development. If you look at our 3 devices, we basically treating chronic skin conditions with XTRAC indicated for psoriasis, eczema and Vitiligo, large market opportunity in psoriasis is one of the fastest-growing areas in dermatology, a $20.1 billion market. Eczema another large, fast-growing market, $11.8 billion. And vitiligo, which is getting a lot of attention recently with some newer approved topical drugs like the JAK inhibitors to treat vitiligo. And XTRAC has been a standby and standard for treating vitiligo for a long period of time. TheraClearX, which is indicated for acne, addresses a $5.5 billion market here in the United States, about 20% to 25% of all visits to dermatologists are for acne. So that's a great opportunity for the company going forward. And VTRAC, which is mainly an international device. It is not a laser, but it is a phototherapy lamp. It has indications in psoriasis, eczema and Vitiligo. It is an eczema lamp and is used extensively, particularly in Asian markets like Japan, China and Korea. The company has sustained and accelerated growth over the last few years. We've increased our installed base from 746 in 2019 to 930 installed devices here in the United States. We have a unique partnership model, which will be talked about later in the presentation. We've also have an installed base internationally of about 35 devices, up from 12 in 2019. In addition, we sell capital equipment on the international market. And particularly in the Asian market, we've been very successful in selling capital equipment, particularly our XTRAC laser, and we have registrations underway for TheraClear. We've had good revenue growth. Last year, we had 20% growth in revenue overall, and we've give -- given guidance for this year in the range of $36 million to $38 million. We're deploying 4 key strategies for profitable growth. One is our expansion geographically into international markets. Two is executed commercial strategy domestically, and that starts with our sales force. We have to execute at the sales force level. We do have a placement model where we place our devices, our XTRAC and TheraClear in dermatology practices, but the key is pull-through. We need to drive usage in those offices, and that is the key focus of our sales force. We're also creating operational efficiencies, moved to a cash flow neutral by the end of this year. We've really made a strong effort to manage our costs, we also have a system in which we own the lasers that we place domestically. And if they put placed in an office where they're not being used for whatever reason the doctor has lost interest or maybe be selling their practice, we'll remove those lasers, refurbish them and then redeploy them, which keeps our cost of goods down and it really helps us in overall keeping our costs under control. We're also pursuing bolt-on M&A opportunities and market expansion. About our global business, we are currently in Japan, South Korea, China, Israel and the Middle East. We have registrations underway in India and Mexico as well as Singapore and Thailand. So we're strong focus in Asia right now as well as starting to get into Latin America. We want to increase our exposure in those areas before we start to tackle Europe and some other areas around the world. And when we look at M&A opportunities, we have some criteria that we try to follow. First and foremost, cost and revenue synergies. We look for overlap in sales force and G&A, manufacturing and other costs. We also look for complementary devices. We are a medical device company so we are looking at medical indications such as skin cancers, warts, hyperhidrosis. Those have similar call points to XTRAC and TheraClear. So it keeps us from having to grow our commercial footprint beyond what we currently have keeps our cost under control. We're also looking at over-the-counter medications that could be complementary to the STRATA portfolio. We have a sales force that's in there selling in some very strong indications like psoriasis, eczema and acne. And we think there's an opportunity to add potentially OTC drugs that could be sold from the dermatology practices alongside the therapies that are using with our current devices. So overall, again, the key investment highlights for the company are addressing a $38 billion market addressing chronic skin conditions. We have a differentiated treatment providing a win-win-win for patients, clinics and payers. We're expanding our international business operations, and we're actively looking for product acquisitions that can open significant growth for the company. And with that, I'll turn it back to Rich.

Thank you very much, Bob. And for our next section will be on XTRAC, I'd like to introduce Dr. Michael Nazareth. Dr. Nazareth is the President of Western New York Dermatology. He earned his medical PhD degrees from the state of New York -- excuse me, State University of New York at Buffalo School of Medicine and Biomedical Sciences. He then completed a dermatology residency at Suny Buffalo, during which time he trained at the Roswell Park Cancer Center Institute, the Women's and Children's Hospital of Buffalo and then the General Medical Center and the Veterans Administration Hospital. Dr. Nazareth is a member of the American Academy of Dermatology, the Society of Pediatric Dermatology and the American Society for Dermatologic Surgery and as well the American Medical Association and the Medical Society of the State of New York. Dr. Nazareth works closely with patients of all ages to meet their complete dermatologic needs by offering a comprehensive range of surgical, medical and cosmetic treatments. And with that, I'll turn it over to Dr. Nazareth.

Thank you so much, Rich. I appreciate you guys having me on this call today. We're very excited about how we use our XTRAC technology in our office. I'm going to go through the model a little bit and also how we're using it for psoriasis in particular. So I know it was mentioned before, but just overall, XTRAC is a 308-nanometer UVB eczema laser. So it delivers light energy just at that wavelength, which has significant benefits for the FDA-approved indications of psoriasis, vitiligo, atopic dermatitis and leukoderma. I'm going to be focusing a little bit more on the psoriasis end of things as we move forward here. So psoriasis in and of itself affects about 7.5 million people in the United States. Vitiligo, another 2 million to 3 million and atopic dermatitis or as you may know it eczema, about 16.5 million people. These are very visible skin diseases that have a lot of symptoms, things like psoriasis and eczema are very, very itchy and bothersome for patients. But they also have a huge psychosocial impact on patients too, because it makes their skin disease very visible. And that can lead to a lot of issues in their personal lives and also their public lives. So they're important to treat. If you look at those numbers too, that's about 8% to 9% of the U.S. population that's affected by these diseases. So the potential number of patients in the country that could benefit from this treatment is huge, and the market growth potential is also very, very significant, as we've personally seen in my practice. So why 308 nanometers. This is the sort of spectrum of light here and you can see at the one end there is Gamma rays and x-rays and the far end is radio waves. We're looking at ultraviolet energy here and just particularly this one wavelength of very narrow UVB light. And that's important because we don't want to burn patients, right, and cause sunburns and skin burns from the laser energy, which could lead to further damage or potentially skin cancers down the road. This is delivering energy at a wavelength that just is effective to treat the skin without burning the skin and therefore, is helpful in eliminating some of the lymphocytes in the skin that are attacking the skin causing these diseases that we're focused on treating. So with psoriasis here, the safety and efficacy has been well established in adults and children with psoriasis. I really like that idea that it works on children too because a lot of those biologic medications and other things that you see TV commercials who are out there are not indicated for children or parents are very afraid to use immunosuppressive therapies in their children, particularly in light of the pandemic and other infections, particularly in school age children that they face. So this gives us a very safe and effective treatment that can deliver energy to the skin in a controlled fashion to clear those plaques of psoriasis without risking immunosuppression or other side effects of a systemic therapeutic target. So obviously, works on adults very effectively, too. And then you have this combination treatment idea. So many, many treatments that we use sometimes are just in and of themselves, but this is a therapy that works very well in combination with other topical medications and also biologic medication. So while many of our patients are on biologic medications and do very well, sometimes they do have breakthroughs, particularly I'm located in Buffalo, New York, winter time can be very tough here. And when there's that cold, dry weather, the heat kicking on in the house, sometimes that does cause flare-ups of both atopic derm, but particularly psoriasis. And it's nice for breakthrough to be able to use this device to clear their skin without having to change their whole regimen, give them different creams or sometimes change their biologic oral medication as well. So overall, identifying who's a good candidate here, there's a lot of good candidates. Localized plaque psoriasis up to about 10% body surface area is the main target here or for people who've had more severe psoriasis and are on therapies that get them mostly clear, but still leave them with a few areas that they need help with. So those are [indiscernible] that just haven't responded well enough to topical systemics or even the biologics. It can be used to treat all areas, including the scale elbows, knees, hands, feet and nails. And I want to call out those 2 particular ones that would scalp and nails because scalp is not an area where you can really put cream very easily because it really messes up the hair, and that's a big issue with these patients. They don't want to use topicals on their scalp. The laser works very effectively for that area. The other one is nail. So some patients just have some pretty significant scalp or sorry, nail disease and we can't use topicals to treat nails. And one of the treatments before was injecting steroids around the nails, which is extremely barbaric, so we don't really do that anymore. And this was an indication sometimes where you were forced to move to an immunosuppressive oral therapy or to a biologic medication, but now we've got a great treatment that we can use on the nails without any pain and any other side effect. So very effective for the treatment of psoriatic nail disease. As I mentioned, very effective in treating scalp psoriasis as well here. Patients are getting 2 treatments a week, about 48 hours a part at least, sometimes they come in on a Tuesday Friday and my practice seems to be quite popular. The average time to improvement is about 6 to 10 sessions and to clearance about 10 to 20 sessions. So very achievable goals that we're talking about with our patients here. And you can see the response rate here overall is very, very high, about 40% to 50% there of getting that level of clearance that patients are looking for. The average remission rate is 3.5 months to 6 months. But longest remission is reported all the way out to 30 months. So unlike a cream where the minute the patients stop using the cream, the psoriasis tends to come back quickly this induces longer periods of disease-free remission for patients. It's not a cure, but it's a much more long-lasting treatment for them. These are some really nice before and after pictures here. You can see before that thicker scaling kind of in these areas over here and then after nice, nice clearance there with the patient. The other thing that is not captured here is the itching that patients experience. Scalp psoriasis tends to be very, very itchy, which is very troublesome for patients because they can't scratch their head in public because it leads to a lot of flaking and it's very embarrassing. So not only are we helping it to look good, but we're taking away that key symptom there of itch with this treatment. This is a recalcitrant polymer psoriasis. You can see here what they look like before treatment. And then after only 4 extract treatments, you can see they're already better after 12 treatments, they're substantially better, and they're almost clear by the time they get to 16 treatments there. So remember, sometimes we can get decent results by using a cream, but the minute they stop, it starts coming back. This can induce those longer periods of disease-free remission. So with atopic dermatitis too, it's been well established that this works very well, both for hand and foot eczema as well as other areas and the prurigo form of atopic derm, which has become a bigger issue now that some other medications have been approved for. It's kind of shown a light on this area here. It substantially improves the itch in the actual skin symptoms, and it reduces the abundance of the Staphylococcus aureus colonization of the skin because you're repairing that skin barrier. And our skin really is the barrier to that nasty outside world. The mainstay of severe eczema treatment in our country has become dupilumab or DUPIXENT lately. But even then patients get breakthrough and being able to use eczema laser therapy to treat those breakthrough areas has been really efficacious in our patients who are already on dupilumab or the new JAK inhibitors for that matter, too. So again, we're targeting those patients with about 10% BSA or patients who are refractory to topical treatments or who are having breakthrough on their biologic or other medications that they may be taking. You can see here, it is very effective in reducing the symptoms in chronic hand and foot eczema. So you can see here, 87% of patients treated are achieving a physician global assessment of 0 or 1, which is clear or almost clear skin, 69% reduction in that PGA after an average of 13 sessions over 6.5 weeks because remember, we're doing roughly 2 treatments a week. And about 11.3 month average duration that patients are remaining disease-free after completing that treatment. So it induces these long periods of remission in atopic dermatitis just as it does for psoriasis. So these are some before and after pictures here. You can see here just how nice clearance we're seeing with the feet and also with these hands and nails in these areas, too. So this is after 13 sessions, so very efficacious and effective. So we've kind of now established how effective this treatment is for atopic dermatitis and psoriasis, but eczema laser technology is not something new. So what makes STRATA's positioning of XTRAC's so unique. One of the key reasons I brought it into my practice was the partnership program. So this is a complete business solution, which includes a series of value-added services beyond just parking the laser in our office and teaching us how to use it. There's a consultation done with the company to kind of identify how to best position the device, how to market it, how to get it to our patients and then how to set up those appointments. There's no upfront expenses, which is a big difference with many other companies here. There's just a fee-for-use business model. And that encourages the practices and the company to really push this forward because the more we use it, the more we're benefiting and the more we're using it, the more codes we're purchasing from STRATA, which drives their business model, too. The practice marketing resources and clinical in-service training that were provided with really is an invaluable service because helping to market it drives demand. Obviously, there's direct-to-consumer campaigns, but they actually work with individual practices like us to tailor our marketing campaigns with our social media platforms, our radio advertising, our TV advertising and also just our internal marketing with our e-mail blast and other things like that. The in-service training is particularly important because we have nurses delivering this treatment to our patients, and I need to make sure that they're very well trained to do that. With the pandemic and things that changed a lot of turnover and some staff occurred, STRATA came to our office and trained that new staff and did in-services with our prior staff to make sure that they were using the device in an optimal fashion to get those best results. And this is kind of the panoply of value-added support services that's provided. And we talked about the marketing support, the other one that's very valuable those patient assistance coupons. So patients who get approved for the treatment, oftentimes, sometimes we'll have a co-pay that they need to pay for that. There is a patient assistance program that returns that co-pay after a period of time, which encourages usage of the device. And then further on, once patients see the benefit of it, they're much more likely to continue on treatment or use it again in the future if they get a flare up. Field support service is very important. Our devices are serviced and stuffed regularly by STRATA. If there's a problem with it, they're in the office very quickly to repair it. Laser upgrades as new technology comes out, they are changing out the devices or upgrading our devices regularly. Consumables are taken care of by STRATA as part of our fee for use. And then just overall, the reimbursement support and handling of prior authorizations, you can go out and get an eczema laser, but your usage of that device is going to end up being very low because the fight to get it covered by insurance companies sometimes is difficult and take staff time to do that. STRATA is taking care of these prior authorizations for our practice, which increases the usage of the device in our practice and also helps patients to actually get on treatment sooner and more effectively. So that is a huge resource because I can't tell you how much time and money we waste on prior authorizations otherwise. And STRATA taking that off of our backs really has helped us to succeed with this use. So that's kind of the end of my section here. I'm going to throw it back to Rich to take it from here.

All right. Thank you, Dr. Nazareth. Our next speaker is Dr. Iltefat Hamzavi. He's the owner of Hamzavi Dermatology. He has practice at Hamzavi Dermatology since 2001 and sees general dermatologies with a special focus on pigmentary disorder, such as hidradenitis suppurativa or HS. You can call it HS, it's a lot easier, I promise. This is a chronic skin condition that renders lumps and lesions in the armpits and groin area. Dr. Hamzavi received his medical degree from the University of Michigan School and graduated with academic honors in a variety of specialty rotations. He completed his residency in dermatology at Wayne State University and then spent time in Europe training at some of the world's leading skin care centers. In 2001, he completed an advanced 1-year laser and photo medicine fellowship at the University of British Columbia in Vancouver. Dr. Hamzavi is an active clinic researcher and investigates causes and treatments for Vitiligo, HS, photo medicine and other conditions. He also serves as a senior staff position at the Henry Ford Health System Department of Dermatology and teaches medical students at Wayne State University. He has coauthored over 300 peer-reviewed papers, which have been cited over 12,000 times in highly respected journals. He also volunteers his time with a variety of nonprofits in education and civic engagement, bringing attention to the debilitating skin diseases. He has served as cofounding Chair of the Global Vitiligo Foundation, a Board member at the PhotoDermatology Society and as President of the Hidradenitis Suppurativa Foundation, or HS. And with that, I'd like to turn it over to Dr. Hamzavi. Go ahead, sir.

Thank you, Rich. And congratulations, we're seeing hidradenitis suppurativa, and I appreciate Dr. Nazareth for baptizing this process. So I wanted to kind of talk to you a little bit about Vitiligo and the use of this technology to treat that. But also, I want to emphasize the fact that this wraparound solution has been very helpful for our patients. So vitiligo is a depigmentation disorder in which you lose color and has a tremendous impact on well-being. For many years, we weren't treating these patients effectively what we're not recognizing the psychosocial impact but in multiple papers have come out in the past few months, the level of depression is anywhere from 50% to 88% based upon a survey instrument called a PHQ-9 as well as up to 25% of patients end up on antidepressants. And when you have this type of discoloring condition on the face, such as these individuals here and you repigment them with the combination of eczema laser and some of the topical therapies, it has a tremendous impact on their psychosocial health. People and children of color, especially had a greater degree of impact and treat these patients earlier really makes a difference. The excimer technology has been around for many years, the capacity of this technology to be used in conjunction with the newer technologies of the topical JAK inhibitors is also enhancing therapy. One of the advantages of this technology is that you can repigment with the technology with topicals, you can suppress the immune system, but you can't mobilize the color cells to repigment the skin. And the excimer laser has been cited in over 70 peer-reviewed clinical studies with different endpoints and the consistent response as well as knowing where to treat the patients, which body locations, which patients to use this technology is well worked out. As many of you know, medicine is a backward-facing field, and it takes us time to figure out this information. While we have decades of experience with the excimer laser. And it really accelerates the response of the topical treatments that are coming up. So rather than having 2 competing options the new topical treatments are going to require something to repigment the skin and excimer is perfectly positioned to do that. Specifically, the areas on the body that respond tend to be the face. The face is the area that is most likely to respond, and we're very thankful for that. Unfortunately, the hands and the feet don't respond as well. And then the other locations of the body have very good responses. But most patients when they come into our clinics, if they don't have the tips, the fingers involved, we tend to use that option. There's no pigment loss in these particular studies over a 2-year follow-up. That data varies compared to whole body phototherapy, which up to 2/3 of patients can lose color. So it may be that the excimer is more effective at retaining the color. We do know that these patients do the maintenance treatments, but we haven't worked out exactly how often that should happen. And when you have pediatric patients, when you add a topical treatment and you have a child that's going to school already being bullied or having psychosocial events, especially in the teenage years, the rate of response matters. And when you add a topical to the excimer laser you get a much faster response. And the initial rates of repigmentation are presented over here. And again, the face does better than other locations, but you have 80% facial repigmentation and a 3-year follow-up so you have a high response and the rate of response is faster. And again, this reaffirms this point that different locations do better. You have complete repigmentation, about 45% of patients in the face, it drops down to less than 10%. The fact that we have that information helps us cancel patients because the last thing you want to do is to have a patient tell them to do all these treatments and have no response. A lot of patients just want hope. And when you're able to say, well, we can't really guarantee that you're going to get great results on tips your fingers, but maybe we can work on your face. And those things kind of come together to try to decide if you want to pursue this technology or not. But if you don't have that information, you don't have the decades of experience that we have with excimer laser, then it's hard to offer that guidance. But we have that unlike some of the newer technologies, which are really groundbreaking and exciting, but we don't have that long-term information. And when you look at phototherapy -- narrowband phototherapy, and Dr. Nazareth did a very nice job talking about the wavelength. Well, excimer and narrowband phototherapy have similar wavelengths. And when you look at the systematic review in a meta-analysis across the world, you find that this UVB light, which is produced by excimer laser well, slightly different wavelength also has a good response on the face and other parts of the body. And it takes you about 12 months to get that peak 45 response, 45% of people achieving greater than 75% repigmentation on the face. So these treatments take time. You're almost doubling the response at the 12-month mark. And at the 3-month mark, you're only at 10%. You have to explain this to patients from the beginning. And again, with excimer's body of knowledge, the volume knowledge we have with narrowband phototherapy and then the tremendous demand for care for vitiligo patients we have that information. And here's a practical experience. You have this wonderful young lady who's going through treatment. And after about 6 months, she's got complete repigmentation. And the XTRAC company and the STRATA group is very good about providing us information to allow us to counsel patients. Obviously, I also have my own images and I also have my own papers to present, but these are things that are very helpful. And here's a young child. In general, segmental of the lag is what this child has does not generally respond to excimer laser or phototherapy and topicals, but in the early phases it can. If you don't do this, then there's a very good surgical option, but why expose this child to surgery when you can repigment that with 2 treatments a week, 20 treatments about 10 weeks, and it changes the outlook for this young child over time. There's CPT codes available for excimer laser. It is challenging to get this approved for vitiligo in some markets, and we have some challenges with patients, but it is definitely changing as insurance companies and societies are trying to understand the impact of this condition, especially in skin of color in younger patients coverage is improving, but we already have a system of CPT codes. We just have to keep advocating to get it covered. And the partnership model, you can get excimer lasers from other companies. You can get excimer light and narrowband phototherapy from other companies, and I've used them. I've had them in my offices, but the support that it takes to run the system well to get the prior authorizations to buy the marketing material to make sure that you have support for [indiscernible] devices, the XTRAC partnership program has been best-in-class, and I can speak to personal experience because it's not like I just accepted this. I've tried other companies and our group has been very, very happy using it both at the Henry Ford Health System as well as at the Hamzavi Dermatology and dermatology specialist clinic. And in our private group, we are very selective about which companies we partner with. And we do a lot of very complex medical derm. We're one of the first private groups who do a lot of kind of color. This is one of our preferred partners to support us in these efforts. And again, Dr. Nazareth baptizes this process very nicely. He gave you all the options for this integrated approach where you have a partnership from field support to laser upgrades. When you buy a laser, many times, you spend a lot of money and the laser never is used. With this model that's been dedicated -- has been dedicated to support for many years and also has been iterative because they take our feedback and improve the process, you're not really buying a device, you're buying a solution, which is very unique in this space because most laser companies do not provide a solution, they just want you to buy their device and then they disappear. The XTRAC system does not do that. So in conclusion, you can deliver this technology to the skin life sparing healthy skin and you've got multiple options, psoriasis, vitiligo, atopic dermatitis, we treat all these conditions. And even with these wonderful technologically advanced biologics and targeted JAK inhibitors, we still have breakthrough cases in all these diseases, and there's a reason to use them. In our practice, these advances are actually offering even more of a reason to use phototherapy and phototherapy is much cheaper for the insurance companies than doing a biologic or biologic alone. And for the patient who has a partial but incomplete response, they can get to significant improvement on a lot of these chronic autoimmune diseases. And the insurance reimbursement is favorable, especially given the overall cost and awareness of these conditions. Happy to take any questions with the rest of the group. Thank you so much for your time.

All right. So that wraps up our section on XTRAC. I would like to now open the floor to questions. As I mentioned before, if you'd like to ask a question, please type that question into the lower box, and we will -- I will read the question and then we will turn it over to the physicians for answers. So the first question is for the doctors is can you discuss the difference in treating children versus adults in psoriasis in terms of using XTRAC.

I can take that. From my practice, we use it quite frequently in both. I think children tolerate this very well. It is not a painful treatment. And I think that, that is very important to differentiate because a lot of the cosmetic lasers that are out there do cause some discomfort when our used. If you mention lasers, sometimes people have that connotation that it's going to hurt and they don't want to think about it for their kids. But the treatment is not painful and therefore, it is very well tolerated by children. So in essence, the treatments that we're doing for children or adults are really not any different other than we usually have if it's a small child we'll have the child sit on their parent lap so we can do it so they're not intimidated by it because they do have to wear the glasses to protect their eyes because it is a laser. They're clear glasses, so it's not a big deal. But just that whole process, sometimes the kids expect it to be painful. And then after the first session, they think this is great because they see their skin clearing. And they're literally running through the office going to the laser room before their parents even can catch up to them. So they're enthusiastic about it, and it works very well. So in the actual way we're doing it, there really isn't any difference between the adults and the kids other than the fact that the kids are coming back there and sitting there with their parents.

All right. I do appreciate that. In terms of the next question, I'd like to understand more how you use XTRAC in combination with topicals when treating vitiligo, I think there's been a lot of conversation of sorts in the market in that regard. I'd love to hear your impressions of that also.

So the experience with vitiligo is documented multiple smaller K series as well as small and randomized controlled trials. And in that, the rate of response and the overall response is much faster when you add photons of UVB light radiation to the skin. So specifically, recently, we did -- and I was one of the authors in the paper and I have a confidence of interest. I've worked with the Insight company, but we looked at a subgroup analysis. When patients had light therapy added to the ruxolitinib therapy, they ended up getting a much higher response. So a higher percentage of patients achieved VASI90, which was the highest threshold. And then also, you had an overall better response, so faster and overall better response when you added those combinations. In tacrolimus, which is the gold standard still and the one that's not FDA approved it has the most information on it with phototherapy, there's numerous studies showing that combination therapy works because, again, a topical [indiscernible] will remove the inflammatory infiltrate, it will make the soil more appropriate, but does not actually bring the color cells, monocytes back unless it happens through a natural process. The excimer technology allows for both a little bit more immunosuppression, but the biggest thing is it allows from melanocyte migration. The advances we're seeing today out of the excimer, there's only one other option that's coming out of maybe 20 trials that focuses on melanocytes. Everything else is focused on the immune system. So you create fertile skin that allows for repigmentation, but you still have to repigment. That's where excimer and light come in. So faster and a greater response, a better response is what you do when you add phototherapy to the upcoming treatments that exist.

Yes. Are you seeing sort of any compliance issues with patients coming in for these treatments? Are they pretty consistent and staying within the realms of compliance in terms of consistently receiving these treatments?

Well, I think for vitiligo is a much longer process than psoriasis. Having the marketing material really helps because you have to cancel this is not going to be psoriasis. This is not going to be -- you're going to walk in and 10 treatments, it's going to be clear. I think Dr. Nazareth can speak to that. But for Vitiligo, if you don't count at the beginning, you don't get compliance. But you counsel effectively, you tell them which locations will do better, the face will generally do better. We tell them how long it's going to take. People are ecstatic. And when it works, it is life altering and across skin types. People are shocked at lighter skin Caucasians who refuse to go outdoors because they don't want anybody to see their vitiligo. But when they get repigmented it's life altering. And so it's, again, counsel properly, very effective, but it is a long process. It's about a year process to kind of get color back in the appropriate body site. A lot of [indiscernible] to kind of speak to psoriasis.

I totally agree with Dr. Hamzavi there. It is a lot easier for psoriasis and atopic dermatitis because they need fewer treatments. Our compliance is really good. But even for Vitiligo, I think the compliance is good. It's just a longer process. It's all about setting those expectations. It's not going to be the miracle that they're clear after 1 treatment, right? Or with Vitiligo, it's going to take a while. So as long as you're setting those reasonable expectations, I found compliance to be excellent. The thing that amazes me is we'll get a snowstorm here in Buffalo. And even on the snowiest, those patients find their way in. They do not want to miss their XTRAC treatment. So they are troopers and even on winter storm warnings and stuff like that, they make their way to the office and don't ask to reschedule. So I would say compliance is very, very good.

That's good. And can you give me a sense of like how quickly their quality of life improves and any patient testimonials that you've experienced directly?

So from the psoriasis and atopic end of things, I would say that they improved quite quickly. Usually, by the time they're on treatment 5, 6, 7, they're seeing significant benefit. Sometimes they're seeing improvement in the itch before they see clearance of the actual plaque of psoriasis or atopic dermatitis, which really gives them a lot more hope, I think, to keep continuing on, obviously. And clearly, as those plaques clear, it has a huge positive impact on their quality of life. We've had some that are huge advocates of it, too. They're talking to people in the waiting room. They've wanted to go on to TV commercials or radio ads or e-mail blast or stuff to have their testimonials out there because they're just so enthusiastic and so excited to have a treatment. And that was big during the pandemic, too, because a lot of people were able to just use topicals plus extract and then didn't need to go on immunosuppressive therapy, which has become a very scary thing now that the pandemic is still a real factor that's out there. And that's particularly true of parents who are very concerned about placing their children on immunosuppressive therapies where now we can use a topical plus extract.

For vitiligo, unfortunately, it takes a lot longer. And so anecdotally, it's about 3 to 6 months to shift based on the measures, so we had the FDA-approved VAS score and then we have these other noticeability indexes that are being picked up. And there's a couple of areas. One is there's an anxiety of the disease coming back. There is a concern about whether or not the pigmentation will match your normal pigment. And then there's also a concern of how fast we'll come back. So if they have a rapid response, then you can imagine that the quality of life improves a little bit faster. If they have a slow response, it takes longer. And even when they repigment completely, they're bothered by the fact that took so long and they don't want to reinvest it. So this is much more of a nuanced area within quality of life, but the quality of life or the life of patients is so low that even when you're treating, you have a bump. So a couple of components of that. It's a little more nuanced than saying everybody does well, they do better, but it's not across the board.

All right. Well, I certainly thank you, Dr. Nazareth and Dr. Hamzavi for participating in today's call. We're going to transition over to TheraClear and for that session, we're going to be hearing from Dr. Bhatia of Oka Dermatology. He is a board-certified and fellowship-trained dermatologists and dermatologic surgeon. He is an internationally recognized expert in dermatologic surgery and cosmetic surgery. His expertise includes facial and body aesthetic surgery, skin cancer therapy, Mos and reconstructive surgery, laser surgery and skin resurfacing procedures, including scar reduction and revision. He has helped bring over 25 drugs to the market, including the development of 2 acne devices. Dr. Bhatia received his medical degree from Northeastern Ohio University College of Medicine, where he was inducted into the Alpha Omega Alpha National Medical Honor Society where he earned awards for both achievement and service. He completed his residency in dermatology at the Medical College of Virginia hospitals, where he served as Chief President. Subsequently, he completed an intensive fellowship in mohs surgery, cutaneous oncology reconstruction, cosmetic and laser surgery and skin care physicians in Boston under the direction of leaders in the field from Boston University, Harvard University and Yale University School of Medicine. Dr. Bhatia is an Associate Professor of Clinical Dermatology at Northwestern University's Feinberg School of Medicine. His memberships include the American Academy of Dermatology, the American Society for Dermatologic Surgery the American Society for Laser Medicine and Surgery, the American College of Moh Surgery and the American Medical Association. And with that, I'll turn the call over to Dr. Bhatia. Go ahead, sir.

Thank you. Thanks for having me today, and really excited to talk about acne and acne therapy, particularly with the TheraClearX device. So acne is the most common skin disease we see in our clinics in dermatology in general. It's the #1 skin disease in the U.S. And the majority of the cases are mild to moderate over 90%. So of what comes into the office is a mild to moderate acne. Up to 50 million Americans are affected annually by this, and that's a huge number. And that number just seems to keep growing because we see Acne now in older and older age groups. Over 50% of U.S. women are experiencing acne in their 20s. 85% of all adolescents experienced some degree of acne sometime between 12 and 24 years. So it's something that we have been seeing for a long time. We continue to see and just continues to grow. And when you're targeting acne with different treatments, traditionally, we use topicals and oral medications, what we're really trying to do is get to one of the key pathogenic factors, the things that cause acne. And if you look at an acne lesions, right, we can kind of show you there's a bunch of things that happen that result in acne. One is follicular hyperkeratinization. That just means that the cells are a little sticky and they get clogged and so the pours get clogged. So the normal dead skin that should be coming out of there can't come out and it traps the oil and dead skin, which can lead to an acne lesion. There's also a bacteria called the acuity bacteria acnes, which when it builds up inside the follicle can cause a lot of inflammation. Also, we see increased sebum production that can be a cause of acne as well where there's more oil being produced. And once again, when it to get trapped, it could cause a problem. And all of these things can lead to inflammation. That's when you get those red tender papules or nodules, which are classic acne lesions. So there's a lot of interventions, like I said, for acne. We can do chemical appeals, thermal infusion, IPL, intense pulse light broad beam light pulse laser, Blue Light, photodynamic therapy, photopneumatic therapy as well as these new 1726 lasers like the Avi clear in a cure. So these all exist. These are all treatments that are done in office. So doing treatments in office is nothing new to dermatologists. But there hasn't been anything that's been highly effective. And so that's really kind of where the TheraClearX comes in, it was specifically designed to treat acne in the office. And to do it at all age groups. It's FDA-cleared for the treatment of mild to moderate acne, but I've used it extensively for more severe acne. In fact, I first started using it on the severe acne patients because sometimes we didn't have an alternative if they couldn't go on some medications or whatnot. And so -- and you always -- when you're trying something new, you want to see it, how does it work against the worst cases. So even though it's clear for a mild to moderate, a lot of us use it for severe. And it treats all types of acne, comedonal, pustular, inflammatory acne. And the goal here is really to kind of catch this acne, treat it before it leads to scaring and other issues. So the other thing about the acne, the there acne system is, it is very unique. It's photopneumatic technology. So it combines 2 modalities. It combines a broadband light, which is basically like a series of lasers together because as Dr. Nazareth talked about, it's not just a single way of length like a laser, it's a broadband light, meaning it covers a lot of different wavelengths. So that way, you can treat a lot of these different causes that we just talked about. In addition to that, there's the pneumatic part, which basically is vacuum. And so the vacuum is applied and then the vacuum does a few things. It pulls the stuff out of the pores, clears the pores, but then also it pushes the blood out of the way and a lot -- and spreads the skin pigment too, which allows the light to penetrate deeper. And so these 2 work very well together to give an effective therapy, and it's very unique in that way. So what else do we use to treat acne in our offices? So obviously, oral medications, topical medications are always there. But these rely on primarily goods actually taking and using the medications properly. And as we know, compliance with medications is tough especially when you're a kid. And it could be due to forget fullness, just the inconvenience of doing it. A lot of patients don't want to be bothered by it and the adverse effects of some of these medications as well. And it usually takes weeks, if not months, to see the improvement with oral and topical medications. When people come into our practice and I write them prescriptions, they say, "Hey, look, you -- we'll see you back in 6 to 8 weeks. I don't even want to see you before then because it's going to get worse than better. And nobody wants that. Everybody wants immediate results, right? And then there's the side effects, like I talked about, dryness, irritation, burning can be some bleaching effects with some of the topicals. In contrast to this, TheraClearX takes all this out of the patient's hands, right? And it's really a comfortable in-office treatment that has no downtime. It was specifically designed to be comfortable and safe and people start seeing the invisible improvement in their acne lesions as early as the second treatment. So it's very encouraging. We talked about compliance before. Compliance, a lot of times, if something is going to take a long time to work, it's hard to get people to be compliant. You have to spend a lot of time educating them. If they start seeing the results, they're coming back. And that's what we see in practice. People start seeing the results early, and so they're highly motivated to come back and get this done. And not only do you see improvements in the acne, but you also would see improvements, a lot of time acne leaves over a little red mark or a brown mark. And since this is broadband light, it actually targets those things too, and helps improve those. So you get the acne or the medical benefit, but you also get some cosmetic benefit. So once again, it works by 2 mechanisms of action. Number 1 is the vacuum, which helps clear the pore. And then number 2 is the broadband light, which really targets the redness, brown and getting rid of the bacteria, the kills the bacteria. And it actually warms up that sebum. So it comes out a little more easily, and it reduces sebum production. So using these 2 modalities, you actually get like 4 hits on each of those acne lesions plus the cosmetic benefit. So this is exactly how it works. And you can see place the little handpiece over the acne lesion and then you activate it. And first, the vacuum is applied, which extracts the content of the pores, which is pretty gratifying to see, you can see all that content coming out and who doesn't like to see that, right? And Next, while the skin is maximally stretched, the light activates. And like I said, when the skin is stretched when you press your skin, you can see blanches, right? And that's because the blood is pushed out of the way. Same thing happens when you pull the skin up with vacuum and you push that blood out of the way, the light can actually penetrate deeper. And that light goes in and through a porphyrin pathway, it kills the bacteria, but it also heats up the sebaceous glands, it shrinks the spacious glands, which decreases sebum production. And then finally, the device releases the skin. This all takes just a matter of a second or 2. And so it's a very quick treatment where you can go over the whole phase and then treat individual lesions as well. The other thing is it's a very safe treatment because it won't fire unless it has a vacuum seal. And so it makes it extremely safe because the light's kind of contained within the head of the device, and it just won't simply fire unless you have a good seal in the vacuums activated. So once again, the vacuum, what it does is it safely removes all the -- whatever is blocking the pore right, and opens it up, removes that bacteria, it removes all that extra sebum that's built up there and decreases the acne lesion in itself. And it's quick and it's comfortable. When you activate vacuum, you stretch the skin, it actually kind of competes with the pain fibers and deactivate sensation. And so kids love it because when they come in, they get this done, it's completely painless, and it's very quick. Then the light heats up the targeted area and kills the back -- acne bacteria and also decreases production of sebum. So here's just some quick before and after. This is a patient that has a lot of acne lesions in the central cheek and on the nose. And this is after -- 2 weeks after a single treatment. So the results are really seen quickly, not only the results in the reduction of acne lesions but also if they have red blemishes or brown blemishes, it helps clear those up extremely quickly. And then here, these are more comedonal acne lesions. So the black heads and the white heads. And even with these, because you're heating up that material and then pulling it out, you get evacuation of these and the skin smooths very quickly. And so this is after 3 treatments. So when you get quick results, it's highly motivating. The other thing I do want to mention is this doesn't keep us from putting people on other therapies. So often, we'll start people on oral therapy or at least topicals. And the other thing I really like about this is if you're used to writing a lot of topicals in your practice, like retinoids, for instance, they're very good, like retina are different and are very good at opening up these pores. This works in combination because as you kind of help improve the keratinization and help the opening, the -- it's kind of a one-2 punch. You're using your topical then you use the device helps clear the pores. And then once the pores are clear, the topicals actually work better. And the patients don't care why they're getting better. They just want to be better. They want to see visible improvement. And so it's very complementary. We don't stop any our medications as we use the TheraClearX in our office. So the opportunity here, if you talk to dermatologists, they -- the statistics say about 100 acne patients per month per common dermatologists, but you talked to them, it's really probably a lot more than that. So one of the things that traditionally dermatologists are used to writing prescriptions, and this is a cash-based procedure. And so this actually helps bridge that pathway from being an insurance and reimbursed only to a cash-based practice. And so this is a really great gateway device. Dermatologists aren't used to spending a lot on big capital. And so having a partnership program really helps with, a getting these devices into the point of care where all the acne patients are, but also gets the dermatologists kind of used to getting cash reimbursement, which really is kind of a game changer as reimbursement. Medically, it goes down, it goes down every year. Here, it's a way to actually bolster their practices and especially for some diagnosis that they see on a daily basis. So -- and dermatologists do this more and more. Now they freeze lesions and get rid of things cosmetically. And so it's not that uncommon, but this is a great gateway device to get them used to using devices where they can also make cash payments and still help their patients. The results, like I said, are very quick and lead to high satisfaction and the patients keep coming back because they see the results. And it is quick. It's painless. Both age groups, adults and kids in our practice. It was funny because a lot of the adults with acne were highly motivated and willing to pay, and they started coming young adult females for their acne and then a lot of their children come and it just keeps building. So there's actually 2 populations that this addresses its adults with acne and kids with acne. And like I said, it's quite fast, painless and that makes the patients come back and it removes that whole compliance issue. Additionally, more and more practices sell product in their office. The retail component keeps growing. And so in our practice, we have aestheticians that administer these treatments -- but while they're doing it, they always talk to the kids about skin care and usually end up getting them on a skin care regimen from the office as well. And like I said, it's complementary to all the prescription topical and oral medications we use. So the last thing I want to mention is that this device, it's really a fourth generation device. So it's been refined and like a fourth-generation fighter jet, right? It's way better than the first generation. So the iterations of this that led to the TheraClearX has made it faster, safer and more efficacious. And so compared to anything else on the market that is used to treat this acne in the office it's something that it's highly efficacious, fast, painless and very safe and easy to operate. So -- and the patients, like I said, they keep coming back for it. And so it does lead to recurring revenue for the practice. And with that, I'll hand it back over to Rich.

All right. Thank you, Dr. Bhatia. So our final speaker today is Dr. Joel Cohen. He is an internationally recognized expert on aesthetics and skin cancer. Dr. Cohen is the Director of AboutSkin Dermatology and DermSurgery and AboutSkin Research in the Denver, Colorado Metro area. He was named a top dermatologist by U.S. News and well report. He was also Counsel Connolly top doctor from 2013 to 2023, so 10 years. He was also voted by his peers 10 times as one of Denver's top doctors and 5280 magazine. He is a board-certified dermatologist and fellowship train in more surgery, laser and cosmetic dermatology. Dr. Cohen has published over 294 medical articles and book chapters and has coauthored 3 academic textbooks. He lectures every month at national meetings as well as at many international congresses and has participated in over 100 clinical trials, including key aesthetic lasers and devices. He is on the teaching faculty at the University of California and Irvine as an Associate Professor of Dermatology. He regularly appears on Denver TV stations with over 75 appearances discussing aesthetic issues, dermatology and skin cancer. And he has been a guest many times on SiriusXM, their show called the doctor radio. Additionally, he's been featured on the EMEA award-winning show, and everybody knows this, the doctor. So with that, I'm pleased to present Dr. Joel Cohen. Go ahead, sir.

Good morning. It's a pleasure to be here, and I'm going to be discussing my experience using TheraClear in our practice. We've had it for a number of years, dating back to, as Ashish indicated, really some of the original devices that was part of this platform dating back probably 7 or 8 years. So I run a 2-site practice in Metropolitan Denver, and we have a lot of insurance patients, but we also have a lot of patients that are cosmetic. And this TheraClear platform fits really well into our practice because it differentiates us from other practices in the area in terms of really that buy-in. So when people come to your practice and they have long suffered from acne, really, their thoughts are what can they do to make them better more quickly. And as Ashish went through very nicely, this can expedite your treatment. So I think people are frustrated with just the prescriptions for topicals and the prescriptions for oral antibiotics and I'm married to a pediatrician, and we see a lot of kids out there who have already lost confidence in the folks that have started to treat their acne, and we really want to give them a confidence booster and this is exactly where TheraClear fits in. So I'm going to be discussing really expediting your acne treatment. So in terms of our formulation and the way that we put this into our paradigm to treat, so for -- it really fits in nicely for, number 1 the kids who have acne who've been someplace else, and they've stopped using their topicals either because they're dry or because they didn't see improvement or because their dental peroxide bleaches their towers. They want to see something that is noticeable in the first couple of weeks of treatment. So we tend to do treatments once a week or sometimes even twice a week, early in the week and later in the week for about 5 or 6 treatment sessions. And really, they should be seeing improvement by treatment #2 or 3 to some degree. And we also give them other information about things that can cause acne flares from diet and milk products to high glycemic foods, many of these kids, especially young guys are on protein shakes and whey protein to bulk up, and we know that whey is a stimulus. So we're fitting TheraClear into the overall comprehensive treatment algorithm for our patients. But these kids really want to see improvement more quickly. The other population that it's very common to incorporate are for people who may have an event coming up. So often these patients have had TheraClear before or a family member has had TheraClear before, and they know that it helps them clear up. So somebody's sisters getting married or somebody has a barite or something like that, we can expedite the improvement. Sometimes it's just before class photos or hockey team photos. And we see so many kids that play hockey or across or football that have significant flares where they're chins strap hits or their forehead area for their helmet hits, and we want to give them improvement. So this is a quick treatment. It's 15 minutes. You don't need topical anesthetic. It is something that people will find comfortable. We don't have to give them any nitrous or PRO-NOX or anything like that like we do for other procedures, and they should be seeing visible improvement pretty quickly. And then I think for the other population, in addition to people who've tried things before at other offices and want to see improvement, people who have events are people who noticed that they're having a flare. So in a couple of weeks, we're going to see kids who continue to have flares around the time of exams, and we know that stress is a major stimulus for people with acne. And if we can actually really identify the stressors and particular time when they may have midterm exams and start treating them early on before these flares really get out of control, we can have really nice results. So this is something that fits into our practice in those 3 respects and it helps us differentiate from other practices. And we use it for adolescents. The people who have events oftentimes may be adults and they realize that this is something that they can implement that is easy to do. It doesn't have downtime. It can jump start their treatment. And really, a lot of people don't want to go on oral antibiotics. We live in the Denver Boulder corridor, where people are always searching for more natural types of treatments. And I explained to him that this is really light. It's focusing on the endogenous porphyrins the acne bacteria is making in the follicular structures, and many people have concerns about long-term antibiotics from inflammatory bowel type issues to antibiotic stewardship and resistance to really just changes in the gut and tolerability and some of the antibiotics that are reused, they actually cause photosensitivity. So like doxycycline in a climate where we have over 315 days of Sunshine a year, those are significant issues. So we've been able to really implement TheraClearX into our patient practice for many reasons to get people really nice results. So this is a picture of a patient. You can see that these patients don't clear up completely, but this is just one treatment in and this is a major confidence builder. So this was from a little clinical trial that we did a few years ago, looking at a series of treatments, and we really want to see improvement. So you can see this patient is skin type 4. So -- and she really does tolerate this really well. We're individually treating the areas and the regions of treatment. And at the same time, she's able to use in the morning, something like a topical benzoyl peroxide, cleanser the shower, she can put a topical formulation on that has an antibiotic and sometimes one of the other products that we recommend for acne, which is a host of different combination type products. And then in the evening, we have patients use a retinoid and they can come into the office. There's really no downtime. It's a 15-minute treatment. Sometimes, they'll have a little bit of irritation at the individual lesions that were treated because we're really opening up with the photopneumatic section, some of these more inflammatory lesions. And I think you'll see even with the kids, when they have less lesions, there's less to pick at. So when there's less to pick up, they get less post-inflammatory redness. So the pickers and squeezers tend to be people who really on fuel something coming. They start working on a spot. And not only does the TheraClearX help treat their inflammatory acne component, and she showed some of the more comedonal acne, but you can see areas of redness from picking or manipulating recent lesions, get better just because that's a target for the light-based treatment as well. So we're really able to take advantage of the fact that these specific wavelengths and these filters are targeting the acne and targeting the follicular structure and the photopneumatic is opening things up plus we're also treating some discoloration in the reds in the brown range. So you can see over the course of a couple of treatments. Sequentially, these patients are getting better. And many of these patients are being more consistent with their topical regimen just because they're seeing improvement. And we know from many clinical trials out there that it can take 4 to 6 weeks to start seeing improvement with the topical regimen. And that buy-in is really tough for kids. I'm a father of 3 kids. I've gone through this with my kids themselves and said, "Look, if you keep using this topical 4 to 6 weeks from things will be better. But if we incorporate TheraClearX, they're going to start seeing improvement in all the parameters of vacuum from inflammatory to comedonal to even the discoloration from some of the recent lesions more quickly. So you can see in the center part of the face, where people have more sebaceous gland activity, you can see more improvement in these areas of acne. And then don't forget about the neck. We see a lot of folks. This happens to be a young woman, but guys tend to have a lot of acne on the neck, especially as they're starting to shave, sometimes they'll shave against the groin and they'll get a folliculitis, and we use this to help some of these situations of folliculitis and acneiform lesions as well. So I think people hear about TheraClear from our patients very commonly. So we have friends referring friends or family members, sending other family members. But this really fits really nicely into the practice because it's a differentiator from many of the other practices, not all derm practices that see so much acne are on board with devices, and this is something that you can incorporate through all different areas of acne, early acne or people who are having flares or people who've tried other things and just haven't seen results, and they want to do something as a step before they think about going on Accutane. And now that we have the 1,726 acne lasers, this is very different. We applied this TheraClearX in terms of right when we're giving people scripts. I tell patients, "Listen, I'm going to give you this prescription. It's going to take 4 to 6 weeks to start working. If you want to really start seeing improvement more quickly, let's book you for TheraClear. It's not covered by insurance." In our practice, we charge about $150 of treatment, but we try to have them book a series. And by booking a series, they're really seeing the effects of cumulative exposure to the photopneumatic treatment TheraClear. So we do 5 treatments for about $650. So once a week or as I said, early in the week and end of the week, sometimes twice a week. So this is a completely delegatable treatment. We have 5 physicians in our office, but we have 4 non-physician healthcare professionals who are trained on doing this type of procedure. So typically, patients will see a physician is their initial step. They'll evaluate their acumen. They'll see what other conditions are going on. Some young women have things like polycystic ovarian syndrome. So we want to be able to diagnose these things early on and get them on a good treatment plan. And along with that treatment plan becomes a pathway that they can do a treatment that's not covered by insurance like TheraClearX and have expedited improvement, and we show patients some of these pictures and show them really a graph of what we expect them to be on. And we also talk about the importance of appropriate topicals, appropriate cleansers, avoiding picking and manipulating and some of the lesions that are there that we can actually make better in terms of the redness and some of the discoloration. So TheraClear works well in our practice. Our staff is educated, knows about it, our patient population knows about it. And I think the pricing makes sense, and we really want to encourage people to do a series of 5 treatment sessions at least, and then they see the effects of this. And then they know that when they have a flare or they're kind of seeing the early elements of the flare, they can come in and start booking these treatments and really space things out for control of that player, perhaps around midterm exams or final exams or when it's a specific event, they can think about these things as well. And it works well for events because there's really no downtime with this type of treatment either. So in terms of overall cost, you can look at different areas, I practice in Denver. So it's not New York and it's not Los Angeles. I gave real numbers from our experience. But you'll see on the coast in some of the big cities and more expensive cities, this is a little bit more expensive. In terms of how this works in our practice, I think this affects multiple pathogenetic factors in terms of opening up the follicle directly reducing the acne causing bacteria, propionibacterium acne and then reducing the sebum production, the overproduction. And it really allows the topical medications to start working better when you open up the follicular structures. So it's really assisting the delivery of these topical medications. So patients can see improvement very quickly, as I said, within a couple of treatments. They start seeing improvement. And I think that, that helps them with overall confidence in what regimen that their doctor has prescribed for their acne to stick with it, to see improvement. And really, it's great because there's no downtime and there's really no significant discomfort. We don't have kids complaining of severe pain, like some other treatments that they may experience or some of the other lasers that we do. I do a lot of laser resurfacing, and if kids have seen their mom or dad go through a laser experience, there's a lot of explaining to do. I tell them that this is not a laser, it's pulse-light, it's filtered light. This is not something that gives a wound, and this is not something that has downtime and people really tolerated really well. And the fact that we can really delegate it to people in the office depends by state works well in our practice. So we have a room that's often dedicated to TheraClear that we have one of our health care professionals that set up to do. And sometimes we can even add it on the day of an acne visit because sometimes these kids come in or somebody comes in and they're really just that with the appearance of the acne and sometimes by the time they get an appointment, they have an event coming up or school photos or something like that. They just want to get this added in. And it's such a quick treatment, it can be an efficient treatment. And the device turns on very quickly. It's not a huge warm-up time. So this has worked well in our practice for a long time, and this is something that is a confidence booster for our practice and helps us differentiate from other practices. And really, our staff knows and our patient knows that we'll get patients in for building their confidence in their topical therapy, people who are noticing a potential flare at the time of flare and then people who have an event, and we do run promos. So this time of year with back-to-school promos are very common to get people in or bring a friend and it works well. And I think that people have had a really good experience with TheraClear in our practice over the years that we've been using it, and I'm happy to participate in the questions.

Questions. And again, if any of you have any questions, please feel free to type your question in, in the lower section of your screen there. So for my first question, I want to talk to you about utilization in your practice. We -- I want to get a sense from each of you like how often is the device used. Do patients prefer topicals or oral therapies in lieu of this? And then I know that some of you touched on how you've used that in combination, but I'm really more focused on sort of TheraClear and sort of what you've experienced in terms of patient utilization in the practice as well as patients coming in and asking for the device.

You should go ahead...

Yes, go ahead...

Yes. So I think as Joel mentioned, people do come in and ask for the device, especially one state, no other people that have used it. We hear about it quite a bit. I'll hear about it on social media as well. But as far as utilizing it with our own patients, it's just become a part of our discussion, just like Dr. Cohen mentioned that when we talk about you're here for your new acne diagnosis, these are our treatment options. This is just one of the treatment options we mentioned. And it's surprising. I think over the years, things have shifted before everything used to be, well, I'm just going to do what insurance covers to, hey, it's I need my face cleared up quickly, right? Because as soon as you say, here's your 2 prescriptions, it's going to take 6 to 8 weeks where it's going to get worse and better. There's almost instantly an eye roll either from the parent or the kid and they're like, "I can't wait 6 to 8 weeks. I need this fixed yesterday." So -- and we say just like Dr. Cohen does. So if you'd like to jump start your therapy, we can set you up for some TheraClear treatments. And within 1 to 2 treatments, you'll notice improvement in your acne. And that really, I would say that gets probably in our practice, 25% of the people kind of 25% to 30% interested and then probably out of those, probably 25%, 30% actually end up getting treatment, sometimes as far as 50%. So I think it is, sometimes they're more motivated like Joel was saying during Prom and events that are coming up back-to-school -- so -- but yes, it's definitely something that we've been able to very easily integrate into our practices, and we have a lot of different providers here that can provide the service as well. The other thing is, a lot of times, the moms are coming in for facials anyways, right? And they're paying this much or if not more for their facials. And so the thought of doing this for your kid to get the acne cleared up is not insurmountable, unlike a lot of other laser treatments that are available that are very expensive and have pain and stuff associated with them. Here, a 15-minute treatment that's very reasonably priced. It's really an easy sell.

I would add to that, that it depends who the physician discussing the procedure with and it depends who is in the room or who's checking out, but certain people have a better experience in getting patients to book it. And I think if we look at those people, it's not somebody who's the typical closure, it's often the people who have suffered from acne themselves. They've had first-hand experience, incorporating TheraClear or when I'm talking to patients, I give the example of my kids and my wife. My wife has been on Accutane 3 times. It doesn't make all acne go away. And at times, people are going to flare. And this is something that can fit right in, in all those situations, people just need to have some experience of hearing somebody having had this treatment successfully, and it's not a stand-alone treatment in our office. We always have patients do prescription products with it. And in many cases, this is helping people see better improvement more quickly with their topical products, in some cases, avoiding going on that oral antibiotics flayer.

Well, thank you. So the next question, is there any post inflammatory hyperpigmentation associated with TheraClear, especially with people of color, right? I believe it was Fitzpatrick 5 and 6. Is there -- can any one of you answer that question? With respect to pigmentation -- hyperpigmentation to people of color. Go ahead, Dr. Bhatia.

Yes. We have a very diverse population in our group. And so we see patients of all different skin types. And yes, you can safely use it. We safely use it in all the different skin types. And even if a practice is very, very concerned or a patient is very concerned, you can actually just use it with vacuum initially too. Clear, the pores get improvement. But what I was talking about earlier was as far as the technology goes, when you stretch that skin using the vacuum, you actually stretch out all that melanin. And if you take a dark area of my skin and stretch it, it looks lighter. And so you really kind of effectively decrease their fit skin type by stretching out that pigment. And so -- and the level of light that's used is actually relatively low. So you can safely use it. It also does -- one of the things we didn't talk about technology-wise, we keep the skin really moist not only to help achieve a seal, but you also get evaporative cooling, which cools the skin surface and makes it even safer in these darker skin types. So short answer, long answer is yes. We use it safely in type 5 and 6 skin. It's also been piloted in some of the countries, Bob Moccia talked about in Asia and whatnot. And so we've been able to effectively safely use it in pilots with -- in patients that are primarily a darker skin.

So from a marketing perspective, I think a lot of folks out there think that perhaps lasers. And again, this isn't a laser. This is pulsed and filtered light is not something that they can typically use in darker skin types. So when we actually have internal photos and promotional materials, we tend to focus on patients who have darker skin. So letting people know that this is a treatment that applies to everybody. So we have little TVs in the waiting room and some of our rooms with little before and after pictures floating by, and we use some of our patient experiences with permission to really advertise that this is something that can be used safely and effectively for different skin types.

Okay. And can you speak to the number of sessions on average before seeing any visible results and the difference between teenagers and adults, if you can kind of break that up and I'll give that to you, Dr. Cohen.

So teenagers tend to have their morphology or their pattern of acne tends to be all over the face. And many of these folks are pickers, many of them come to the doctor, and they just -- they haven't had great experiences in getting their acne treated. Sometimes they're starting with a pediatrician. And again, I'm married to one, but reflexively sometimes a pediatrician has a lot to deal with during these visits and may just hand out some prescriptions, and that's not the focal point of their meeting. When patients come to a derm office, that's what they're there for. Acne is their evaluation. They're getting their whole appointment dedicated to their acne. And they really have a better understanding that these topical medications are not a magic one. They're not going to make things go away right away, and they're not a panacea, they're not going to make all their acne go away. So making sure to set expectations with the prescription products is super important. And then secondly, making sure to identify different pathways for these patients. So they can go the traditional insurance, get the prescription route and schedule a follow-up visit in 6 or 8 weeks to see how they're doing. And many of those patients lose confidence because they get dry or irritated or they just don't see improvement. And then the second pathway would be to incorporate the synergies of TheraClearX into their treatment. And by showing them pictures of what to expect, we tend to show patients who start to see improvement within 2 or 3 treatments. And again, we really encourage patients to get a package of about 5 treatment sessions.

Okay. And of those treatment sessions, are they -- I mean, is it once a week, twice a week? Or can you just do 5 over a 2-week period or a 5-day period of, I'm just asking.

As I said in my presentation, we typically will do once a week. But if patients have something on their agenda, I have no problem doing a treatment early in the week and towards the end of the week, like a Monday and a Friday, that's totally fine as well.

Okay. Good.

Good for us...

To answer your first question, I kind of always undersell these things. So I tell them it will take 2 to 3 treatments to see improvement. The reality is in our practice in our hands, usually 1 to 2 treatments to end up seeing improvement, which is good, keeps them coming back and keep them motivated. And then we have 2 protocols. We either sign them up for a monthly -- or I'm sorry, a weekly treatment or if they have a big event coming up, we have our rapid resolution protocol that we kind of come up with where we can bring them in twice a week for 2 weeks. And with those people see improvement a little quicker, obviously. So -- but it's safe to do a little quicker if you need to. And most of the time, people -- society has really changed. They're not very forward thinking. It's everything needs to be now, and I need to be better by yesterday. So most of the people if they can fit it into their schedule, they'll do the rapid resolution protocol where it's twice a week for 2 weeks and then maintenance treatment monthly or whatever they need after that.

I think it's important to talk to patients about really expectations and so that they understand what improvement means. So when we say improvement, we're talking about the inflammatory acting lesions that they can feel when we say improvement, we're talking about some of the comedonal lesions like black heads and white heads as well from the photopneumatic treatment. But we also want to make sure that they're not picking or squeezing or manipulating these spots or doing anything to unroof or irritate them. And sometimes when you explain to kids that this is going to had some suction to open the follicle and the pore and express some of the them that's in there and allow the medication to tolerate -- to penetrate better, they think that it sort of reinforces what they've been doing about picking and squeezing to help that. And I just make sure it's very clear that we don't want them to do that. That adds to what they consider the picture of their acne in terms of the redness or the post-inflammatory discoloration or post-inflammatory hyperpigmentation, just from picking and manipulating these lesions. And I further explain to them that the device, the TheraClearX is going to make some of that redness and some of that pigment better in and of itself because of these filtered wavelengths. So leave the spots alone that are there. If they send something coming up, don't manipulate it or squeeze it, let the device do its work and let the topicals do their work as well.

And do you -- so after the treatment, I mean, does it come back? Or do you have to stay on it for a while? Or sort of what happens after they've been treated during that period of time?

I think there's a few groups where the people who are really diligent about using their prescription products, when they're also using the TheraClear after their 5 treatments, many of those patients go on to do their topical products and just be really disciplined about using that and they have a good experience. For some people who aren't so great about continuing their topicals or they have significant issues related to their acne from a genetic or hormonal or sometimes from a food component or stress component those patients will be interested in other treatments. They may still incorporate TheraClear while they start those other treatments, but in some cases, that's Accutane. And in some cases, it's really used a discussion about incorporating brief oral antibiotics so that they can continue their topicals and do some TheraClear. But eventually, the people with severe inflammatory or disfiguring acne that really have tried TheraClear and are great about using their topicals and things continue to cycle for them and flare for them, we have frank conversations about isotretinoin, Accutane. And then this is where eventually the conversation about the new 1726 nanometer lasers come into play, which can function in some people like Accutane, but these are very expensive and they have discomfort. So I really conceptualize TheraClear as something that we do early on so that we get people confident in using their topical regimens that we know works for many people according to clinical trials. And then for those people that may have flares for one reason or another, as we discussed, continue to incorporate TheraClear. But the people who are disciplined about using everything and have incorporated all that and they continue to have issues, then we have conversations about Accutane and some of the specific [indiscernible] lasers.

Okay. And then I have another question, and I apologize to the participants. I know there are a lot of questions, and we're limited in time, and we can have additional follow-up questions after the call, just feel free to e-mail us. But another question from the audience is about needle insert and how to treat correctly due to differentiation of acne dents. So I'll give that to either one of you if you'd like to take that question. Dr. Bhatia go ahead.

Sure. Typically, most of them you don't need to use any type of needle or anything with this. Sometimes our aestheticians do do, "acne surgery" where we actually unroof it with a little needle, but it's really just to help open up the pore. But most of the times, pore opens up on its own just from the heat and the vacuum. So it's not something we end up doing. You could do the needle insert deeper for nodules and cysts sometimes. But as it kind of lies right now, it's really marketed for mild to moderate acne and not the severe. But when we do have severe patients, we'll go after the nodules with kind of a deeper lancing.

Okay. Well, look, we're going to wrap up the TheraClearX Q&A. And before I turn the call over to Bob, I just want to remind all of our participants that management will be presenting at the upcoming LD Micro Conference on October 4 in Los Angeles. And then there will be also a Dawson James conference on October 12 in Jupiter, Florida. So for any additional information on that, please contact our representatives over at CG Capital or you can send an e-mail to the [email protected]. I'm going to go ahead and turn the call over to Bob for any closing remarks. Go ahead, Bob.

Thank you, Rich. And again, thank you to our panel. That was very informative. And lastly, just thank you all who joined the call today. We really appreciate your support and we look forward to keeping you updated on the continuous achievement of STRATA's Skin Sciences. With that, we'll conclude the event. Thank you, guys.