Seeking Profits in Chin Fat

Uncertainties around health care reform and the complexities of medical reimbursement weighed heavily on the business models of most presenting companies at this week’s J.P. Morgan Healthcare Conference.

Not so, however, for Kythera Biopharmaceuticals, a Calabasas, Calif.-based developer of cosmetic treatments that took the stage yesterday to talk up prospects for what it sees as the most promising procedure in its pipeline: a therapy for getting rid of under-the-chin fat.

The company, which last year secured an investment from Intendis, Bayer HealthCare’s dermatology business, valued at $43 million with potential for up to $330 million in milestone payments, is one of a number of venture-backed companies targeting the aesthetics space. Another that raised sizeable capital this past year is Pleasanton, Calif.-based Zeltiq Aesthetics, developer of a cooling device used in fat reduction treatments, particularly elimination of “love handles”, which raised $102 million since 2005, according to Thomson Reuters, including a $25 million Series D round in June led by Aisling Capital.

Meanwhile, TRIA Beauty, a Dublin, Calif.-based seller of an over-the-counter laser hair removal system, has raised $78 million since 2005, including a $15.6 million round closed in September backed by Aisling Capital, De Novo Ventures, Technology Partners and Vivo Ventures. The company also recently began selling an acne treatment system featuring a blue light emitting device that users beam over blemishes.

While the economic downturn in the U.S. and Europe has cut into disposable income among consumers of cosmetic procedures, entrepreneurs in the space remain optimistic.  Kythera CEO Keith Leonard says early surveys are bullish on potential demand for its lead product – Atx-101 – an injectable that dissolves fat, estimating that there’s a $600 to $800  million U.S. market for the treatment, which is currently in Phase III trials in Europe and Phase IIB in the U.S. with those results expected later this quarter.

Leonard’s presentation included some striking “before” and “after” shots, with patients who underwent the treatment of four shots spaced over about three months showing noticeably more chiseled jaws. Market research, Leanard says, indicates that primary target market will be women, although there are also many men who were interested in reshaping “to develop a more virile jawline.” No word yet on how much the treatment will cost, though Leonard did say it will be less than $10,000.

Kythera previously raised $61 million in venture funding, according to Thomson Reuters, from backers including Altitude Life Science Ventures, ARCH Venture Partners, JAFCO, Prospect Venture Partners and Versant Ventures.