Houston med-aesthetic company acquired in $550M deal

M&A

Houston-based Soliton, which has created a technology that uses sound to treat cellulite and scars, has been acquired. Photo via soliton.com

A California company has acquired Houston-based Soliton as well as its innovative device that uses sound to eliminate cellulite.

Allergan Aesthetics, an AbbVie company, has announced an agreement to acquire Soliton and its rapid acoustic pulse device RESONICTM, which recently received U.S. Food and Drug Administration clearance for the treatment of cellulite.

The company's team first developed the basis of the tool for tattoo removal and earned FDA clearance for that treatment a few years ago. Christopher Capelli and Walter Klemp co-founded Soliton in 2012.

The acquisition will take Soliton's technology to the next level, says Klemp, who serves as the company's executive chairman.

"Allergan Aesthetics' brand recognition, global footprint, track record and commitment to developing best-in-class aesthetic treatments makes the Company ideally suited to maximize the commercial potential of the RESONICTM rapid acoustic pulse technology," Klemp says in the release.

"I am proud of the passion and accomplishments of the Soliton team and thankful for the ongoing support of our investors which have culminated in this transaction," he continues. "We look forward to working with Allergan Aesthetics to ensure a successful completion of this transaction."

For Carrie Strom, president of Global Allergan Aesthetics and senior vice president at AbbVie, Soliton's solution has a great potential in the market. Soliton's clinical trial data that was submitted to the FDA showed that after a single treatment session, RESONICTM demonstrated significant improvement and strong patient satisfaction with 92.9 percent of subjects agreeing or strongly agreeing their cellulite appeared improved, per the release.

"There is a huge unmet need to address cellulite and effective treatments have been elusive and frustrating for consumers," Strom says in the release. "Soliton's technology offers a new, completely non-invasive approach with clinically-proven results to reduce the appearance of cellulite with no patient downtime.

"The addition of this technology complements Allergan Aesthetics' portfolio of body contouring treatments," she continues. "Health care providers will now have another option to address consumers' aesthetic concerns."

Brad Hauser, CEO of Soliton, previously told InnovationMap that the company's plans for 2021 included focusing on the commercialization of their product and get it into the hands of dermatologists, plastic surgeons, and other medical professionals for 25 key accounts — potentially including ones Houston — with a plan for a national rollout in 2022.

This week's roundup of Houston innovators includes Richard Seline of the Resilience Innovation Hub, Deanna Zhang of Tudor, Pickering, and Holt, and Brad Hauser of Soliton. Courtesy photos

3 Houston innovators to know this week

who's who

Editor's note: In the week's roundup of Houston innovators to know, I'm introducing you to three innovators across industries recently making headlines — from resilience technology to energy innovation.

Richard Seline, co-founder at the Houston-based Resilience Innovation Hub Collaboratory

Richard Seline of Houston-based Resilience Innovation Hub joins the Houston Innovators Podcast to discuss how it's time for the world to see Houston as the resilient city it is. Photo courtesy of ResilientH20

Richard Seline says on this week's episode of the Houston Innovators Podcast, that people are exhausted and these feelings are festering into frustration and anger — and calling for change. The things that need to change, Seline says, includes growing investment and innovation in resilience solutions.

"As a fourth generation Houstonian, it's just so hard to see my hometown get hit persistently with a lot of these weather and other type of disasters," Seline says.

These unprecedented disasters — which are of course occurring beyond Houston and Texas — have also sparked a growing interest in change for insurance companies that have lost a trillion dollars on the United States Gulf Coast over the past seven years, Seline says. Something has got to change regarding preparation and damage mitigation. Read more and stream the podcast.

Deanna Zhang, director of energy technology at Houston-based Tudor, Pickering, Holt & Co.

Deanna Zhang of Tudor, Pickering, Holt & Co. writes a response to the energy crisis that occured in Texas in February. Photo courtesy of TPH

Deanna Zhang specializes in energy tech, and what she witnessed from February's winter weather was basically an epic fail caused by a myriad of issues.

"But it's oversimplifying to say that the only solution to preventing another situation like this is continued or increased reliance on the oil and gas industry," she writes in a guest article for InnovationMap. "What last week ultimately demonstrated was the multitude of technology solutions that needs to scale up to provide us with the best energy reliability and availability." Read more.

Brad Hauser, CEO of Soliton

Houston-based Soliton can use its audio pulse technology to erase scars, cellulite, and tattoos. Photo courtesy of Soliton

A Houston company has created a technology that uses sound to make changes in human skin tissue. Soliton, led by Brad Hauser, is using audio pulses to make waves in the med-aesthetic industry. The company, which is licensed from the University of Texas on behalf of MD Anderson, announced that it had received FDA approval earlier this month for its novel and proprietary technology that can reduce the appearance of cellulite.

"The original indication was tattoo removal," Hauser says. "The sound wave can increase in speed whenever it hits a stiffer or denser material. And tattoo ink is denser, stiffer than the surrounding dermis. That allows a shearing effect of the sound wave to disrupt that tattoo ink and help clear tattoos."

According to Hauser, the team then turned to a second application for the technology in the short-term improvement in the appearance of cellulite. With the use of the technology, patients can undergo a relatively pain-free, 40- to 60-minute non-invasive session with no recovery time. Read more.

Houston-based Soliton can use its audio pulse technology to erase scars, cellulite, and tattoos. Photo via soliton.com

Houston company receives FDA approval for tech that uses sound to blast away cellulite

Zip zap

Soliton, a Houston-based technology company, is using audio pulses to make waves in the med-aesthetic industry.

The company, which is licensed from the University of Texas on behalf of MD Anderson, announced that it had received FDA approval earlier this month for its novel and proprietary technology that can reduce the appearance of cellulite.

MIT engineer and doctor Christopher Capelli first developed the basis of the tool while he led the Office of Technology Based Ventures at M.D. Anderson.

Capelli uncovered that he could remove tattoos more effectively by treating the skin with up to 100 waves per second (about five to 10 times greater than other devices on the market), giving birth to the company's proprietary Rapid Acoustic Pulse (RAP) platform.

In 2012 he formed Soliton with co-founder and entrepreneur Walter Klemp, who also founded Houston-based Moleculin, and later brought on Brad Hauser as CEO. By 2019, the company had received FDA approval for using the technology for tattoo removal.

"The original indication was tattoo removal, which is what Chris envisioned," Hauser says. "The sound wave can increase in speed whenever it hits a stiffer or denser material. And tattoo ink is denser, stiffer than the surrounding dermis. That allows a shearing effect of the sound wave to disrupt that tattoo ink and help clear tattoos."

According to Hauser, the team then turned to a second application for the technology in the short-term improvement in the appearance of cellulite. With the use of the technology, patients can undergo a relatively pain-free, 40- to 60-minute non-invasive session with no recovery time.

Brad Hauser is the CEO of Soliton. Photo courtesy of Soliton

"It works similarly in the fibrous septa, which are the tethered bands that create the dimples and cellulite and the uneven skin. Those are stiffer than the surrounding fat cells in the subcutaneous tissue," Hauser says. "That allows the technology to disrupt those fibrous septa and loosen and release the dimples."

In 2021 the company plans to commercialize their product and get it into the hands of dermatologists, plastic surgeons, and other medical professionals for 25 key accounts—potentially including ones Houston—with a plan for a national rollout in 2022.

And they don't plan to stop there.

The company has already announced a partnership for a proof-of-concept study with the U.S. Navy in which Soliton will aim to use its technology to reduce the visibility of fibrotic scars, and more importantly work to increase mobility or playability of scars.

"Often the scar ends up causing restrictions in motion and discomfort with pressure of even clothing and certainly with sleeping," Hauser says. "We believe based on the reduction in volume and the increase in playability that we saw in our original proof-of-concept study that we will be able to bring benefits to these military patients."

Work on the study is slated to begin in the first half of this year.

In the meantime, the company is making headway with treatment of liver fibrosis, announcing just this week that it's pre-clinical study in animals demonstrated positive results and a reduction in effects by 42 percent seven days after the completion of carbon tetrachloride (CCL4) induction. The RAP technology was also named the best new technology by the Aesthetic Industry Association earlier this month.

"It's really targeting collagen fiber and fibroblasts on a cellular level" Hauser says. "Which we think has numerous potential uses in the future."

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Houston lab explores how AI bots can help the elderly

AI for aging

The University of Houston’s Empathetic Lifespan AI & Robotics for Aging (ELARA) Lab is currently conducting research into how AI bots may be able to help the elderly live more social and independent lives through several ongoing initiatives.

The lab officially launched last month as part of the Gerald D. Hines College of Architecture & Design under the leadership of Assistant Professor Chorong Park. Part of the lab’s mission is tackling ongoing problems with aging, such as dealing with disabilities and social isolation. Researchers’ current work is focused on designing a new AI companion bot specifically tailored to the needs of older people.

“We need to take all the needs of older adults seriously,” Park said in a news release. “They won't use the robot if they don't feel at ease or if they feel they are being constantly watched.”

The field testing of new AI bots in this population hopes to overcome several traditional obstacles in technology use among the elderly. A study by Park shows that many older people have a fear of overt surveillance when using advanced AI. There is also ageism to consider. Most new technologies are designed with younger and employed buyers in mind, not retirees who may need help remembering daily tasks or accessing important information.

“The more older adults are excluded from technology development, the worse those technology gaps will become,” Park said. “AI and the majority of technologies are created for younger people, so my research method integrates older adults directly into the design process.”

ELARA recently collaborated with the Mamie George Community Center in Richmond, Texas, to track seniors’ response to desktop AI bots like Emo and Cupboo. Researchers also had participants use air-dry modeling clay to create their ideal robotic companion.

While the eventual AI bot may be able to help the elderly feel less isolated and more supported, there are concerns to consider. A study published in the Asian Journal of Psychology charted the development of delusional thinking in a 72-year-old woman who became convinced the empathic-response bot was in love with her. The rise of “AI psychosis” has the potential to exacerbate mental health problems, particularly in socially isolated people, which a quarter of Americans over the age of 65 are.

ELARA’s research is focused on creating “pet-like” AI models with enhanced trust cues. If it can overcome the dangers of socially isolated people relying on AI for companionship, it could be a big step forward for independent aging.

SpaceX IPO set to be biggest ever and could make Elon Musk a trillionaire

IPO News

SpaceX says it plans to raise up to $75 billion when it goes public this month, setting the stage for the largest-ever stock market debut and putting Elon Musk on course to becoming the world's first trillionaire.

The company, formally known as Space Exploration Technologies Corp., said Wednesday it will sell 555.6 million shares at $135 a piece in an initial public offering. The estimated proceeds would easily top the $26 billion raised by oil giant Saudi Aramco in 2019. The offering would also give SpaceX a market value of $1.77 trillion. Only six companies in the S&P 500 are currently worth more, with Nvidia tops at $5.2 trillion.

Besides the size of the offering and the expected proceeds, SpaceX's amended prospectus updates details about how much control of the company Musk will have. As SpaceX's CEO, chief technical officer and chairman, Musk's voting power will come primarily through his ownership of 5.22 billion Class B shares, which give the holder 10 votes for every share held. According to the filing, Musk would have 82.4% of the voting power in the company.

Forbes currently values Musk's net worth at $826 billion and his stake in SpaceX at $542 billion. The estimated value of his SpaceX holdings was based on an overall value for the company of $1.25 trillion. Based on those numbers, a $1.77 trillion valuation for SpaceX would boost Musk's net worth by $223 billion, making him a trillionaire. However, much of Musk's worth is in stock that he has yet to cash in.

Even as it makes a bid for a blockbuster market debut, SpaceX is currently losing billions of dollars a year. The filing shows that the company lost $2.6 billion from operations last year on $18.7 billion in revenue, and the losses kept piling up at the start of this year, too.

Fantastical plans

Time will tell how SpaceX fares on the market. Musk's plans for the company are as fantastical as the money he hopes raise in the sale.

Colorful, even frightening in parts, the IPO document strikes a contrast with the typically dry, technical prose in IPO documents, detailing plans to use proceeds from the sale to help put men on the moon again and perhaps even Mars. In one section, it talks of a need to build "a permanent human colony" on the red planet with "at least one million inhabitants" as existential threats loom that could consign man to "the same fate as the dinosaurs."

Musk has almost equally ambitious plans for his other publicly traded company, Tesla. His goal is to transform the maker of electric vehicles into a producer of robotaxis and humanoid robots. Dan Ives of Wedbush Securities wrote in a research note that he expects Tesla and SpaceX to merge next year.

AI plays a key role

Key to the success of both companies — and any merged entity — is artificial intelligence. In its IPO filing, SpaceX says it sees potential revenue from AI of up to $26.5 trillion. But that depends on another lofty Musk ambition — putting data centers in space, which is not technologically possible at the moment.

Transforming his space company into a primarily AI-focused company will be a challenge for Musk, who started xAI in 2023 with 11 other co-founders who have all since left. Some were recruited away by rivals.

Its main AI product, the chatbot Grok, is "less impressive than anything that we see from any other major player in the space, whether that's OpenAI, or Anthropic, or (Google's) Gemini," said IDC analyst Arnal Dayaratna.

Dayaratna said that doesn't mean SpaceX doesn't have potential as a major AI player, thanks in part to its computing partnership with Anthropic and Musk's recent deal that gave SpaceX the rights to buy AI coding tool Cursor for $60 billion later this year. Folding in Cursor's capabilities would give SpaceX access to the coveted business customers now using Anthropic's Claude or OpenAI's ChatGPT.

SpaceX plans to use the net proceeds from the IPO to fund the expansion of infrastructure for its AI and rocket businesses, and to beef up the constellation of satellites that power Starlink Mobile, among other investments.

The company plans to list on the Nasdaq under the symbol "SPCX" and could begin trading as soon as the end of next week.

And SpaceX isn't the only colossal market debut investors are now bracing for. Earlier this week, Anthropic submitted a confidential filing with the U.S. Securities and Exchange Commission to officially start its own IPO clock.

OpenAI has not yet reported filing the initial SEC paperwork, but an IPO from the ChatGPT maker is widely expected.

"This listing represents the first major test for public markets after years of muted IPO activity with SpaceX paving the way for AI giants Anthropic and OpenAI to follow soon after," Ives wrote.

___

Associated Press Technology Writer Matt O'Brien contributed.

New UH survey reveals concerns over AI data center growth in Houston

data findings

A new report out of the University of Houston shows that area residents remain wary of the long-term effects of operating data centers.

The recent survey from the University of Houston’s latest SPACE City Panel, conducted by the Center for Public Policy at the Hobby School of Public Affairs, shows that while 85 percent of Houston-area residents use AI, nearly 63 percent oppose the construction of AI data centers within 1 mile of their homes.

Respondents’ concerns centered around data centers’ high energy demand and the area’s power grid reliability. According to the survey, 32 percent of residents who oppose local data center projects would be more likely to support the centers if they relied on renewable energy over fossil fuels.

“Respondents understand that AI can bring economic and educational benefits, but they are also concerned about the physical infrastructure needed to fuel AI, especially data centers,” Soran Mohtadi, post-doctoral fellow at the Hobby School and a researcher on the report, said in a news release. “This physical infrastructure demands more electricity and water, leading to environmental impacts.”

Experts estimate that 6.5 gigawatts of data center capacity will be added to the Texas grid by 2030. And Houston’s data center capacity is predicted to more than double by 2028.

The Electric Reliability Council of Texas also projects electricity demand could reach 218 gigawatts by 2031, which would be more than double the record peak set in August 2023. Data centers are expected to account for 86 gigawatts of that new demand.

Survey respondents also said they are concerned about the state's future water supply, given the large amounts of water that data centers need to stay cool.

In terms of who’s responsible for that issue, 57.6 percent of respondents said they put the onus on Texas lawmakers, while 31.5 percent say tech companies should be responsible.

Additionally, more than 75 percent of respondents believed that data center developers and technology companies—not residents—should bear the cost of infrastructure upgrades to support data centers.

“Every decision legislators make has implications on residents’ everyday lives and local infrastructure now and in the future,” Maria P. Perez Arguelles, lead researcher on the report and research assistant professor at the Hobby School, added in the news release. “This issue is going to become more important in years to come, so this is just the beginning.”

Read the full report here.

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