This continuing medical education activity is jointly provided by the North Carolina Dermatology Association and Southern Regional Area Health Education Center.
July 13-15, 2018 | Omni Grove Park Inn Resort | Asheville, NC
North Carolina Dermatology Association
2018 SUMMER MEETING SUNDAY PRESENTATIONS
Nutritional Deficiency in a breast feeding infantMichael Farhangian, MDDermatology Resident, PGY-3Wake Forest University School of MedicineDepartment of Dermatology
Wake Forest Baptist Medical Center
History
• HPI• 8 mo old female with no significant PMH, evaluated for
cutaneous eruption x 2 mos. • On neck folds, popliteal fossae• The patient was diagnosed by referring physicians as atopic
dermatitis and treated with hydrocortisone 1% cream; however the eruption became progressively worse despite treatment.
• Appears asymptomatic to parents• Loose stools and poor weight gain noted over past few months
in infant• Mother currently breast feeding as patient had aversion to solid
foods• Mother noted to frequently skip meals
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Wake Forest Baptist Medical Center
History
• PMH• None, full term birth (39.5 weeks), C-section
• Past Surgical History• None
• Social History• Living at home with mother
• Allergies• NKDA
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Wake Forest Baptist Medical Center
Physical Exam
Vitals:Pulse: 130T: 97.8FRR: 36Height: 0.67 metersWeight 6.6 kgWeight=13th percentile, length 53rd percentile, weight for length 4.6 percentileZinc: 62mcg/dL, Alkaline Phosphatase 135IU/L, Vitamin B6 13.8ng/mL, Vitamin B12 116 pg/mL, Vitamin A 12 mcg/dL, Prealbumin 9.7 mg/dL, Free fatty acids 0.44 mmol/L
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Wake Forest Baptist Medical Center
Differential
• Acrodermatitis enteropathica• Atopic Dermatitis• Tinea Coporis• Vitamin A deficiency• Essential Fatty Acid Deficiency
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Wake Forest Baptist Medical Center
Essential Fatty Acid Deficiency (EFA)
• Based on clinical findings and lab tests, patient was diagnosed with Essential Fatty acid (EFA) deficiency
• If in infants, generally seen in prematurity or malabsorption• More specific laboratory tests:
• Decreased linolenic acid• Decreased arachidonic acid• Decreased 5,8,11-eicosatrienoic acid
Picture courtesy of Bolognia, Jean., L.Schaffer, Julie V., Cerroni, Lorenzo (Eds.) (2017) Dermatology /[Philadelphia] : Elsevier Saunders
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Wake Forest Baptist Medical Center
Essential Fatty Acid Deficiency
• Linoleic and linolenic acid are essential fatty acids that mammals cannot synthesize=precursors to longer chain fatty acids1
• Contained within fish and vegetable oils• Required for maintenance of cell membrane
function (and fluidity), modulation of epidermal proliferation and inflammation2
• Infants require a higher percentage of EFA in diet than adults – who need roughly 1-2% of their diet to be EFA, premature patients are at increased risk due to smaller fat stores3
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Wake Forest Baptist Medical Center
Essential Fatty Acid Deficiency
• Role in water barrier function2
• Lamellar bodies in stratum corneum require sphingolipids which are linoleate-rich
• Role in epidermal hyperproliferation• Required to form diacylglycerol in cell membranes
which plays a profound role in cell signaling and gene transcription
• Role in modulating inflammation• EFA’s are precursors to arachidonic
acidprostaglandins; at physiologic levels modulate inflammation
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Wake Forest Baptist Medical Center
Clinical Features of EFA Deficiency
• Xerosis• Scaly, erythematous intertriginous eruption• Traumatic purpura, poor wound healing• Brittle nails, alopecia• Hyper- and hypopigmentation of hair
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Wake Forest Baptist Medical Center
Treatment of EFA Deficiency
• Topical Sunflower seed and safflower oils (high in EFA), though systemic absorption is unpredictable
• Oral or intravenous supplementation of EFA’s6
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Wake Forest Baptist Medical Center
…Back to our patient
• Referred to pediatric gastroenterology and nutrition specialists
• Mother encouraged to eat more well balanced diet and continue breast feeding
• Rash resolved in 2 months with Mother’s improved diet and introduction of breast milk by patient’s Aunt
• Diet supplementation with formula and solid foods was recommended, though patient did not tolerate well initially
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Wake Forest Baptist Medical Center
Sources
1. Sadesai VM: The Essential Fatty Acids. Nutr Clin Pract 7(4):179-86, 1992
2. Ziboh VA, Miller CC, Cho Y Significance of lipoxygenase-derived monohydroxy fatty acids in cutaneous biology. Prostaglandins Other Lipid Mediat. 63(1-2):3-13. 2000
3. Duerksen D, McCurdy K: Essential fatty acid deficiency in a severely malnourished patient receiving parenteral nutrition. Dig Dis Sci 50:2386-2388, 2005
4. Goldsmith, Lowell A.,Fitzpatrick, Thomas B. (Eds.) (2012) Fitzpatrick's dermatology in general medicine /New York : McGraw-Hill Medical
5. Bolognia, Jean., L.Schaffer, Julie V., Cerroni, Lorenzo (Eds.) (2017) Dermatology /[Philadelphia] : Elsevier Saunders
6. Friedman Z et al: Correction of essential fatty acid deficiency in newborn infants by cutaneous application of sunflower-seed oil. Pediatrics 58:650-654, 1976
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Wake Forest Baptist Medical Center
Thank you!Questions?
Anogenital Verruciform Xanthoma associated with Lichen Sclerosus
Dana Baigrie DO PGY-4, Sampson Regional Medical CenterMark MacKay BS, Campbell University School of Osteopathic Medicine
Jonathan S. Crane DO FAAD FAOCDMuammar Arida MD, GPA/Aurora Diagnostics Greensboro, NC
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• I have no conflicts of interest or disclosures
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History of Present Illness 76 year old Caucasian female presents with perianal rash for 3 months. The rash is slightly pruritic. She denies any past or current treatments. She does report history of urinary incontinence, but no fecal incontinence. She admits to using baby wipes in area since onset of the rash. No history of melanoma or non-melanoma skin cancer. She also notes a skin tag in the area which is bothersome to her and requests removal. Review of symptoms otherwise unremarkable.
PMH: Breast cancer, COPD, diabetes, hyperlipidemia, hypothyroid PSH: Cholecystectomy, hysterectomy Social: No alcohol, former smokerMeds: Atorvastatin, lisinopril, miralax, synthroid, fish oil Allergies: NKDA
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Clinical differential diagnosis for the verrucous lesion?• Condyloma • Seborrheic keratosis • Squamous cell carcinoma• Verrucous carcinoma • Verruciform xanthoma
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Histopathology
CD168
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Clinical differential diagnosis for the white scaly area?• Lichen sclerosus• Contact dermatitis
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Histopathology
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Verruciform Xanthoma • Verruciform xanthoma: asymptomatic, planar or verrucous solitary
plaques ~ 1 - 2 cm• Most commonly occur on the oral mucosa
• Other sites: anogenital or periorificial sites • NO association with hyperlipidemia • Can occur in setting of lymphedema, epidermolysis bullosa, pemphigus,
discoid lupus erythematosus, graft vs host disease, and CHILD syndrome • Congential Hemidysplasia with Ichthyosiform erthroderma and Limb Defects• 2/9 sporadic lesions found to have missense mutation in exon 6 of NSDHL gene—
different from CHILD syndrome defect (exon 4 & 6)11
• Formation of the xanthoma cells possibly secondary to degeneration of or damage to cells in the overlying epithelium• IgG autoantibodies against ECM-1 are found in 80% of patients with LSA. Oxidative
stress may also play a role in the pathogenesis, based upon analysis of lesional skin that showed lipid peroxidation of epidermal basal cell layers, oxidative DNA damage and oxidative protein damage.
Verruciform Xanthoma & Lichen Sclerosus
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Verruciform Xanthoma & Lichen Sclerosus
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• Zegarelli et al proposed that damage to the epithelium could trigger the following cascade: (1) entrapment of epithelial cells in the papillary dermis, (2) subsequent degeneration of these cells and lipid formation, (3) engulfment of released lipids by macrophages, and (4) accumulation of foam cells between the rete ridges
• Interface may allow migration of epithelial cells to epidermis verruciform xanthoma may represent reaction pattern
• Treatment: complete surgical removal with appropriate management of LSA because of association with SCC in both VX and LSA
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Conclusions• VX in the anogenital region can be misleading clinically • May represent a reaction pattern induced by different
conditions/inflammatory disorders • If verruciform xanthoma diagnosis is suspected or considered, it is
important to look for associated vulvar or anogenital condition such as lichen planus or lichen sclerosus
• Treatment of VX includes surgical excision• Recurrence is rare • Imiquimod has also been used successfully
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References• Mehra S, Li L, Fan CY, et al: A novel somatic mutation of the 3β-hydroxysteroid dehydrogenase gene
in sporadic cutaneous verruciform xanthoma. Arch Dermatol 2005; 141: pp. 1263-1267• Oyama N, Chan I, Neill SM, et al.: Autoantibodies to extracellular matrix protein 1 in lichen
sclerosus. Lancet. 362:118-123 2003• Zegarelli DJ, Aegarelli-Schmidt EC, Zegarelli EV. Verruciform xanthoma: a clinical, light microscopic,
and electron microscopic study of two cases. Oral Surg Oral Med Oral Pathol. 1974;38(5):725-734• Fite C, Plantier FÇ, Dupin N, Avril MÇ, Moyal-Barracco M. Vulvar Verruciform XanthomaTen Cases
Associated With Lichen Sclerosus, Lichen Planus, or Other Conditions. ArchDermatol. 2011;147(9):1087–1092.
• Connolly SB, Lewis EJ, Lindholm JS, et al.: Management of cutaneous verruciform xanthoma. J Am Acad Dermatol. 42:343-347 2000.
• Mohsin SK, Lee MW, Amin MB, et al.: Cutaneous verruciform xanthoma: A report of five cases investigating the etiology and nature of xanthomatous cells. Am J Surg Pathol. 22:479-487 1998
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Special thanks to Dr. Muammar Arida at Aurora Diagnostics, Greensboro for his help with microscopic examination and images.
THANK YOU
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a case of pediatric pemphigus herpetiformisSam Wu MDUNC Dermatology and Skin Cancer Center7.15.20182018 NC Dermatology Association Summer Meeting
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outlinePresentation of case
Discussion of literature
Treatment
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disclosuresNone
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the rashErythematous, annular and polycyclic, pruritic, scaly plaques since 2 years of age with prominent involvement of the head and neckPrevious treatments:Topical steroidsTopical antifungalsTopical calcineurin inhibitorsOral antibioticsMethotrexateAcitretin
Previous biopsy:Psoriasiform dermatitis—acanthosis, spongiosis, mitoses, hypogranulosis, bacterial colonies, neutrophilic microabscesses.
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more treatments Topical steroids
Phototherapy
Oral terbinafine
Oral antibiotics
Etanercept
Adalimumab
Methotrexate
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further workupDIF: IgGH&E
IIF: positive to ICS at 1:640ELISA: positive for desmoglein 1, negative for desmoglein 3
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pemphigus herpetiformisRare manifestation of pemphigus foliaceous > pemphigus vulgaris
Erythematous, annular, pruritic plaques with vesicles/bullaeTypically spares mucosa
Neutrophilic and/or eosinophilic spongiosis with microabscesses, less acantholysis(especially early on)
PF‐like pattern on DIF
Dsg 1 > Dsg 3 on ELISA
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treatment of pemphigus herpetiformisSystemic corticosteroids
Dapsone
Others:AzathioprineCyclophosphamideRituximabMethotrexateMycophenolate mofetil
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responsePrednisone 1 mg/kg
Rituximab 750 mg/m2
2 doses, 2 weeks apart
Oral antibiotics continued
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summaryPemphigus herpetiformis is a rare manifestation of pemphigus
Clinical and histopathological features overlap with that of dermatitis herpetiformis
Immunological findings most often resemble those of pemphigus foliaceous, but can vary
Pemphigus herpetiformis is rare in children, but should be considered in the differential of persistent, annular and polycyclic lesions
Treatment options for pemphigus herpetiformis include prednisone, dapsone, rituximab, and other immunosuppressants
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referencesMetry DW, Hebert AA, Jordan RE. Nonendemic pemphigus foliaceus in children. J Am AcadDermatol. 2002;46:419‐22.Peterman CM, Vadeboncoeur S, Schmidt BA, Gellis SE. Pediatric pemphigus herpetiformis: case report and review of the literature. Pediatr Dermatol. 2017 May;32(3):342‐346.Santi CG, Maruta CW, Aoki V, Sotto MN, Rivitti EA, Diaz LA. Pemphigus herpetiformis is a rare clinical expression of nonendemic pemphigus foliaceus, fogo selvagem, and pemphigus vulgaris. J Am Acad Dermatol. 1996 Jan;34(1):40‐6.Duarte IB, Bastazini Jr I, Barreto JA, Carvalho CV, Nunes AJ. Pemphigus herpetiformis in childhood. Pediatr Dermatol. 2010 Sep 1;27(5):488‐91.Hocar O, Ait Sab I, Akhdari N, Hakkou M, Amal S. A case of pemphigus herpetiformis in a 12‐year‐old male. ISRN Pediatrics. 2011 Apr 7;2011.Kasperkiewicz M, Kowalewski C, Jablońska S. Pemphigus herpetiformis: from first description until now. J Am Acad Dermatol. 2014 Apr;70(4):780‐7.
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thank you!Dr. Megan Evans
Dr. Donna Culton
Dr. Katharine Kenyon
Dr. Luis Diaz
Dr. Dean Morrell
Dr. Paul Googe
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Urticarial Vasculitis: A Clue to Something Deeper
Mary Ramirez, MD
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Patient Presentation
• 20 year old male • PMH
– Sensorineural hearing loss in right ear– Hemorrhoids
• Medications– None
• Allergies – Rabbit dander
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Patient Presentation
• ED Consult– Chief complaint: Bloody diarrhea that
started 10 days prior followed by a burning, painful rash + joint pains + joint swelling
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Patient Presentation
• History of present illness – PCP visit 5 days later
• Diarrhea: Imodium • Rash: Triamcinolone 0.5% cream • Labs
– BMP normal – CBC
» WBC 10.3 (H)» Hemoglobin 9.1 (L)
– ANA 1:40 – ASO (-)– CRP normal
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History of present illness
• Dermatologist visit 2 days later– Diarrhea better, rash worse– Stop Imodium – Start Benadryl and Allegra + triamcinolone
0.5% cream
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Patient Presentation
• Patient presented to ED– Too painful to walk due to swollen, tender feet– Rash: Arms, legs, hands, feet
• Burning, painful, and slightly pruritic• No recent tick bites• No travel outside of North Carolina• No history of HSV • No history of mononucleosis • No sick contacts • No urethral discharge, dysuria, hematuria, polyuria,
fevers, chills, or recent URI symptoms
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Labs
• CMP– K+ 3.2 (L)
• CBC– WBC 13.3 (H)– Hemoglobin 9 (L)
• LFT’s normal • Lyme titers negative
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Differential Diagnosis • Erythema multiforme (EM)
– HSV: No sx– Mycoplasma: No sx– Strep: ASO (-)– EBV: Monospot negative – Salmonella: No stool cultures
• Erythema chronicum migrans– Lyme: Titers (-)– STARI
• Plan– Treat empirically with ciprofloxacin and doxycycline– Triamcinolone 0.1% ointment BID to skin lesions
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Biopsy of right thigh: Leukocytoclastic vasculitis
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Leukocytoclastic vasculitis (LCV)
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• 3 days later the patient presented for follow up – DIF: negative – Repeat labs
• CBC– WBC normal – Hemoglobin 7.2 (L)
• ESR 88 (H) • CRP 36.5 (H)• ANA (-)• RF, C3 and C4, cryoglobulins normal
Follow-Up
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• Diagnosis: Urticarial Vasculitis – Subtype of small vessel (leukocytoclastic)
vasculitis– Lesions persist for >24 hours– Painful or have a burning sensation– Residual hyperpigmentation as they resolve
• Treatment– Steroid taper + NSAIDs + continue
doxycycline and ciprofloxacin
Follow-Up
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• Overall patient had improved • Repeat labs
– Hemoglobin 6.1• Patient admitted to hospital
– Colonoscopy• External hemorrhoids • Moderate pancolitis• Diagnosis: Ulcerative colitis
• Patient discharged on mesalamine 4.8 grams daily + prednisone 40 mg daily
Follow-Up
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Discussion Points
• Is urticarial vasculitis (UV) associated with ulcerative colitis (UC)?
• Is LCV associated with ulcerative colitis?
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Inflammatory bowel disease
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LCV and UC
• Less than 20 cases of LCV have been reported in patients with UC
• LCV occurs mostly in older patients– Average age: 40 years
• Male predominance of nearly 5:1– EN (more common in women) – PG (no gender predisposition)
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Reported Cases
• Location of LCV– Multiple areas (58%) – Single site (42%)
• The most commonly involved sites– Lower extremities (83%)– Upper extremities (42%)– Buttocks (25%)– Trunk (25%)
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When does LCV occur?– LCV occurred after UC
• 58%• 4 months to 20 years after the initial diagnosis of
UC.– LCV preceded UC
• 33%• 1–18 months.
– LCV occurred synchronously with UC • 8%
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• Extraintestinal skin manifestations– Specific
• Metastatic Crohns– Associated
• Erythema nodosum (EN)• Aphthous ulcers
– Treatment Induced• Anti-TNF agents
– Reactive• Pyoderma gangrenosum (PG)• Sweet’s syndrome• Urticarial Vasculitis
Why do EIMs occur in patients with IBD?
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Inflamed colonic mucosa
Deposition of immune complexes in vascular wall
Fecal antigen exposure to submucosal lymphoid tissue
Immune complexes
Destruction of vascular wall
Complement activation
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Urticarial Vasculitis and Ulcerative Colitis
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Summary • Consider an underlying IBD when persistent skin
leukocytoclastic vasculitis occurs without clinically apparent causes
• Although rare, urticarial vasculitis should be considered as one of the skin manifestations of UC
• Urticarial vasculitis in association with UC can be treated by corticosteroids and/or treating the underlying IBD
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References• Boules, E., and C. Lyon. “Florid Urticarial Vasculitis Heralding a Flare up of Ulcerative
Colitis.” Case Reports, vol. 2014, no. dec22 1, 2014, doi:10.1136/bcr-2014-207141.
• Akbulut S, Ozaslan E, Topal F, Albayrak L, Kayhan B, Efe C. Ulcerative colitis presenting as leukocytoclastic vasculitis of skin. World J Gastroenterol 2008; 14(15): 2448-2450
• Greuter, Thomas, et al. “Skin Manifestations of Inflammatory Bowel Disease.” Clinical Reviews in Allergy & Immunology, 2017, doi:10.1007/s12016-017-8617-4.
• Ahmad et al. “Urticarial vasculitis and associated disorders” Hamad Annals of Allergy, Asthma & Immunology, Volume 118 , Issue 4, 394 – 398.
• Butts, G Tyler et al. “Leukocytoclastic Vasculitis in an Adolescent with Ulcerative Colitis: Report of a Case and Review of the Literature.” SAGE Open Medical Case Reports 2 (2014): 2050313X14547609. PMC. Web. 13 Sept. 2017.
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July 2018
Building & Realizing Value in a Dermatology Practice
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1.
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Why do you want to do this? (exit, grow, merge)Monetize my practice for my retirement Double the size of my practice
a)b)c) Add new revenue streams to my practice (path lab, Mohs,
cosmetics)
2. What is the outcome you want? How will your life bedifferent?a)b)
Cash, retireCash, employment
c) Ownership, practice continuation
3. What is your most likely exit strategy?a)b)c)
Sale to partnersSale to local competitors Sale to other
d) Throw keys on my desk…..4. How much is your exit ‘number’?
a) Did you include your real costs of living?
5. What risks do you face?
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a) Healthb) Practice
6. What do you want to do after the event?a)b)c)
Play GolfWork part time Travel
d) Serve on boards?
7. Who is your planning “A” team? (accountant, legal, planning, management)
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Retention of key physicians and staff after transaction close
Diverse capabilities (medical and cosmetic dermatology, Mohs surgery, and dermatopathology lab offerings)
Size, staffing mix and talents of the provider team
The dollar amount of the practice Earnings Before Interest Expenses, Income Taxes, Depreciation and Amortization Expense + adding back non-recurring
and owner-related expenses (i.e. Adjusted EBITDA)
Key Buyer CriteriaThrough Bundy Group’s work in the Dermatology Market, we have observed several key criteria that buyers are focused on when evaluating an acquisition.
Compliance of the practice with federal and state regulatory guidelines
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Key Components That Increase the Value of a Dermatology Practice
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Practice reviewed or audited financial statements
Adjusted EBITDA margin percentages (1) at 20% orgreater
Geographically based in an attractive market
(1) Adjusted EBITDA Divided by Practice Revenues
Willingness of practice owners and employee physicians to sign employment agreements and/or retain minority equity after a
transaction close
When is the Right Time to Sell?
▪ Practice owner has determined from a personal level that he or she is sufficiently motivated to sell the practice
Owner is prepared to commit to a sales process and discussions with buyers
Optimal Time to Sell
Owner and advisors have assessed the state of the buyer’s market and are confident that a competitive process will yield a successful outcome
Drivers of Valuation
Practice is accomplishing most, if not all, of the goals stated on the key buyer criteria page
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Mergers & Acquisitions Process} The sale of a practice can be divided into a series of stages.} The actual timeline for a Mergers & Acquisitions process depends
on a number of factors, including the following:◦ Motivation levels of the buyer and seller
◦ Speed with which a seller can provide all relevant information
◦ Selling practice fundamentals and issues that buyers need to diligence
◦ Strength, efficiency level, and experience of buyer’s and seller’s legal and M&A advisors
◦ The number of potential buyers actively seeking to acquire the practice
Negotiate with Multiple Buyers
Months 1 – 2 Months 2 – 3 Months 3 – 4 Months 5 – 6
Conduct Diligence
Draft Confidential Marketing Documents
ContactPotentialBuyers
Management Presentations
Sign Offer/ Start Diligence
Continued Diligence /
Close
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Dermatology Market Observations
The Dermatology Market is extremely fragmented as there are nearly 11,000 locations in the United States with 35% operated as solo practices
More practice owners are proactively seeking ways to increase profits, improve efficiency, and build value in their practices
Consolidation of practices and practice acquisitions are rapidly occurring in the Dermatology Market. There are now over 30 private equity groups that have invested in the segment
The Dermatology Market is attractive to buyers due to its recurring patient base and growth opportunities such as Mohs surgical services, in-house pathology capabilities, and cosmetic offerings
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has been acquired by
has been acquired by
has been acquired by
has been acquired by
Sample of Dermatology Transactions
has been acquired by
has been acquired by
has been acquired byhas been acquired by has been acquired by
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Strategic Options Available
▪ Continue to execute on the practice’s operating plan▪ Maintain existing ownership structureStatus Quo
Selling Options Private Equity Group and Management-Led
Buyout
▪ Sell the practice to anotherdermatology practice or related industry participant
▪ Physician and key employeespartner with Private Equity Group to buy the practice
• Immediate liquidity for current shareholders
• Opportunity for existing owners and key employees to maintain and / or obtain an equity stake in the Practice
Dermatology Practice Owner(s)
Physician-Led Buyout with Financing
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Sale to a Strategic Buyer
▪ A Strategic buyer may be able to better manage the practice’s growth needs.
▪ All shareholders should be able to realize immediate liquidity and value through a sale.
▪ Remaining shareholders may be able to stay active with the practice post-close and realize some of the future value associated with the growth.
Sale to a Strategic Buyer
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ConsiderationsPositives
▪ The practice’s growth plan will likely be replaced by a buyer’s plan. This could include restructuring and cost cutting.
▪ Possibility of physicians and / or shareholdersmaintaining an equity percentage can be lesscompared to other options.
▪ Sell the practice to a dermatology consolidator or another industry provider looking to obtain dermatological capabilities.
Key Questions▪ Does the current owner believe that it can offer growth opportunities?▪ Does the buyer seem to be the “right fit” for your practice?
▪ A Private Equity Group will want existing owners to have discretion and authority in running the practice.
▪ A Private Equity Group with experience in the Dermatology Market can help provide financial and strategic resources to management.
▪ Shareholders have the opportunity to maintain some ownership and share in the upside growth after the practice has been sold.
Sale to a Private Equity Group
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ConsiderationsPositives
▪ A Private Equity Group will hold management accountable for operating the company and increasing the practice’s revenue and profitability.
▪ A Private Equity Group is a medium-term solution and will be focused on selling the practice again in a three to seven year timeframe.
▪ Private equity group, management and / or remaining shareholders partner together to buy the practice from the currentshareholders.
Key Questions▪ Would shareholders be comfortable partnering with a financial investor?
Consolidation of medical and cosmetic dermatology practices continues to occur at an aggressive pace
Negotiating with multiple buyers or investors will provide practice owners with best fit, value and terms
Sellers should continually use the key buyer criteria and key value components in evaluating their practices
Summary
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Questions & Answers
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“You name the price. I’ll name the terms. (And I’ll do better than you every time).”- Anonymous
} What is Transaction Value?◦ Total consideration to owners in an acquisition, which
may include the following: Up front cash amount paid to seller plus Seller Note: Cash amount paid to seller over a period of time
in the form of principal plus interest payments plus Earnout: Cash amount paid to seller in the future based on
the achievement of objectives plus Equity retained by the seller in the practice after transaction
close
Key Mergers & Acquisitions Terms
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} How is a deal structured?◦ How a seller and buyer choose to negotiate◦ The amount, form (i.e., cash, earnout, equity, seller note)
and timing of consideration payments◦ The role of the owners and key physicians post-close
} What is this thing called EBITDA ?◦ Earnings Before Interest Expense, Income Taxes,
Depreciation Expense and Amortization Expense.◦ Considered by sellers and buyers to be a representative
cash flow figure. Will include an adjustment for non-recurring expenses and excess compensation taken out by practice owners
Key Mergers & Acquisitions Terms
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} Synergies◦ Two companies could be worth more together than
separately◦ One way that buyers can realize synergies is to
consolidate billing services in order to reduce costs
Key Mergers & Acquisitions Terms
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