a competitor before it's even out of thebox: Restylane, the current best-sellinghyaluronic-acid filler, made by Meclicis,a $344 million dermatological companybased in Scottsdale, Ariz. And Meclicis'Perlane, a more robust version of Restylane,is expected to get the FDA's thumbs-upany day now. Down the road, there's a

BYDODYTSIANTAR

Allergan, a specialty pharmaceuticaloutfit with sales of $2.9 billion, will put thesame marketing muscle behind Juvedermthat made Botox a household name. Thereare some potential wrinkles in that plan,though. Botox, a facial-muscle relaxant thatwas used by some 3.5 million people lastyear, had the market to itself; Juvederm has

ON A STEAMY JULY MORNING IN NE\V YORK CITY

last summer, Allergan, maker of Botox unveiledthe latest weapon in its aesthetic arsenal,Juvederm. The new wrinkle filler-made fromhyaluronic acid, a naturally occurring sugar in

the skin that helps it hold moisture-had just got the green lightfrom the FDA for distribution in the u.s. Champagne corks poppedand a curtain parted to reveal a glamorous and wrinkle-free blond,seen minutes before on a video with a face full of creases andfrowns. "This is the new generation of dermal fillers;' gushedCaroline Van Have, director of communications for Allergan."Juvederm is going to rock the market:'

A2 TIME BONUS SECTION, DECEMBER 2006

TIME BONUS SECfION, DECEMBER 2006

possibly even bigger blow, Reloxin, a Botox­like alternative.

Also in Medicis' comer: plans for aMedicis-sponsored reality-TV show,The Hottest Mum in America. "It's liketwo gOO-lb. gorillas that once each had amonopoly, slugging it out for each other'smarket share;' says Dr. Kenneth Beer, acosmetic dermatologist in Palm Beach,Fla., who runs a summer boot camp inColorado that trains physicians on the latestaesthetic techniques. "It's an interestingtime in the beauty business:'

Make no mistake about it, a war onwrinkles is under way. And Medicis andAllergan aren't the only ones battling forthe $14 billion Americans will spend thisyear to rejuvenate their aging faces. Theoverall aesthetics market, including laserdevices and breast implants, is only goingto keep growing, at a 25% annual clip,according to Allergan's calculations. SaysAllergan chairman and CEO David Pyott:"Everyone is trying to work out how to

A3

INSIDE BUSINESS

The Boomer Effect

play in the game." And he's right. Derma­tologists, cosmetics giants, pharmaceuticalcompanies, medical-device makers andspas are all trying to get rich selling youthto the nation's aging baby boomers, agroup that's nearly 80 million strong andgetting more wrinkled by the day, blesstheir narcissistic little hearts.

What's different about this phase ofthe wrinkle war is that many of the tech­niques available today actually work, ifonlytemporarily, and they don't involvea scalpel. As long as you're willing to paythousands of dollars for a menu of cosmetic,nonsurgical treatments, you can reasonablyexpect to retrieve, for a few months at least,a semblance ofyour youthful appearance.

Dozens of new kinds of injections,light therapies, laser resurfacing devicesand innovative skin creams are available orabout to hit the market. The newest sellingpoint: shorter recovery periods, fewervisible aftereffects and, in many cases,near immediate results. "The better thetechniques, the more people want them;'says New York City and Miami cosmeticdermatologist Dr. Frederic Brandt. Themachines ~sed by professionals are expen-

sive, but for dermatologists the payoff ishuge: cash up front and no insurancebureaucracy to engage. "If you're reallygood at what you do;' says La Jolladermatologist Dr. Richard Fitzpatrick,"you've got the potential to charge apremium, which you can't in the medicalarena. And you get paid immediatelY:'

That incentive isn't lost on otherM.D.s. Many obstetricians, gynecologists

and otolaryngologists now offer lasertreatments and injections to theirpatients. Dr. George Shapiro, acardiologist in Scarsdale, N.Y., is evenshifting his practice to what he calls agemanagement. "What I do is offer mypatients everything in one place so theycan be beautiful and healthy:' The man isgoing to coin money. Here's how thebattle is shaping up:

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.INJECTABLES: Dueling SyringesThe idea that we could buy a new facewithout getting a face-lift got its start withBotox, a purified form of botulinum toxinthat eases the appearance of wrinkles byessentially paralyzing facial muscles tem­porarily. Annual regimens for Botox orfillers can cost around $2,000, since theresults last three to six months.

Little wonder, then, that Allergan andMedicis are aiming new products at eachothers' best sellers. The battle started lastspring when Medicis was set to pay$3.2 billion for Inamed, a medical aesthet­ics finn with a promising product pipelinethat included potential Restylane competi­tor Juvedenn and the U.S. rights to distrib­ute Dysport (a Botox-like muscle relaxantthat will be marketed here as Reloxin).Weeks before the deal was to close,Allergan, based in Irvine, Calif., swoopedin and outbid Medicis by $200 million andalso had to fork over $90 million to Medicisas a termination fee. "At first it was asomewhat defensive move;' admitsAllergan CEO Pyott. "But then I had a'wow' moment. It was like playing pokerwhen you know you have a winning hand:'

Allergan's triumph was short-lived,

though. The Federal Trade Commissionchallenged the company's Botox monopolyand ruled that it couldn't retain Reloxin.Guess who got the spoils? Medicis. 'We lostthe battle but got the product we wantedanyway,' says Manny Kapur, Medicis'business director in Canada. "And we gotto buy it with their moneY,' adds JonahShacknai, chainnan and CEO of Medicis.

For the moment, though, Allergan hasthe competitive edge. Juvedenn will rollout in January. Medicis' Perlane won't beavailable until the middle of next year;Reloxin isn't expected until early 2008.Shacknai isn't too worried. He expects thatmarket leader Restylane will hold on to itsshare of the filler segment and its near 90%profit margins. 'Were the leading filler andhave lots of pioneering products coming tomarket;' he says. "Eventually, we will beable to meet every need for filling the face:'

So will Allergan. After buying up Ina­med, minus Reloxin, it fonned a separatemedical-aesthetics division. Part of its mis­sion, according to its head, Robert Grant:to build "a total facial-rejuvenation port­folio" that can capitalize on Allergan'sBotox-driven market reach. "This is an op­portunity to create a new category which

will have legs not just for the next decadebut for the next 100 years;' he says.

.MEDICAL DEVICES: Heating UpBaby boomers want to look as young asthey feel but don't want to look like they'vehad work done. "They don't want a pulledversion of themselves;' says Brandt, whoclaims that he uses more Botox andRestylane than any other dennatologist.

How about a baked version? The latesttrend is medical devices that use new non­invasive technologies that produce natural­looking results and let patients get back towork quickly. On the table: tools that useradio frequencies (Thennage), plasma gas(Portrait), infrared light (Titan), light­emitting diodes (GentleWaves), pulsed light(Palomar Medical Technologies' Luxsystem) and lasers (Fraxel, Vbeam) tosmooth out and tighten the skin and softenthe appearance of wrinkles. Syneron's eMaxuses radio frequencies and light energiesand costs about $250,000. According toShiu-Yik Au, an analyst for MillenniumResearch Group, the market for aestheticmedical equipment will top $400 millionthis year, a 30% increase from 2005. Heprojects it could more than double by 2010.

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treatments are increasingly nonablative,meaning they're kinder and gentler to thepatient. Portrait, for example, leaves thetop layers of skin initially intact and a littlered. As healthier skin emerges, peelingoccurs. But the process takes days, notweeks, and the result: a dramatictightening effect around the eyes and

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HOTELS & RESORTS

damages the layers on top, triggering ahealing process that produces newer skinunderneath. ''You need to basically woundthe skin, so you can get a healing response;'says Keith Penny, director of research forRhytec, a firm that makes Portrait PSR, adevice that treats wrinkles with plasma gas.

Today's lasers and other energy-based

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The Boomer Effect

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That explains why the venture vulturesare circling. According to Allan Will, chair­man of Split Rock Partners, a VC groupbased in Menlo Park, Calif., the attraction isthe speed to market, compared with, say, asurgical device. Clinical costs for a cardio­vascular tool, for example, could reach$70 million, and it could take six yearsbefore it's marketable; for an aesthetics de­vice, the costs and time frame are half that.

For the companies that make the de­vices, it's also a profitable proposition. Con­sider Reliant Technologies, a privately heldcompany in Mountain View, Calif., knownfor its popular resurfacing laser, Fraxel. Itsnewest model, Fraxel SRl500, which letsdermatologists treat deeper layers of skin,sells for $110,000. Orders have been pouringin, but the revenue stream doesn't stop there.The handheld device requires a special tipthat needs to be replaced after four to sixtreatments. Cost per tip: $400. "It is a greatbusiness model;' says Reliant vice presidentof global sales Keith J. Sullivan, with a grin.

Even though the various treatmentswork slightly differently, they operate on asimilar principle: they deliver heat energyto the skin's deeper layers, which essentially

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jawline, according to Dr. Fitzpatrick.One of the least invasive derma­

tological treatments is GentieWaves, anFDA-approved technique developed byVirginia Beach, Va., dermatologistDr. David McDaniel. GentleWaves, a45-lb., 15-in. machine with two panelsconsisting of 2,000 tiny light-emittingdiodes, flashes an amber light at a patient'sskin for 35 painless seconds. Cells aren'tdamaged, as in some treatments, but theyare energized, says Dr. McDaniel. Theresult is that the skin, over time, producesmore collagen, a protein that disappears aswe age, and less collagenase, an enzymethat degrades collagen. "Photo-modulationuses light to prevent, heal and reversesome of the danJages of time;' he says.

That reversal will cost you $800 for theeight-session course of treatment over fourto eight weeks. Light BioScience, the pri­vately held company that makes Gentle­Waves, is working on the home version, sayspresident and CEO Rick Krupnick.

.COSMETlCS: Under PressureThe cosmetic giants were the first ones inthe wrinkle WaJ~ and they're still pouring

money into it. L'Oreal's research team, forexample, spent seven years developing Pro­Xylane, a modified version of xylose, a sugarmolecule that helps the skin's moisturereservoirs, called glycosaminoglycans.The new patented ingredient graces whatthe company immodestly touts as "themost technologically advanced antiagingtreatment around"; Lancome's AbsoluePremium bx ($132 for 2.6 oz. of the nightformula). Alan Meyers, L'Oreal USA'ssenior vice president of research anddevelopment, says, 'The real question-andit's not a trivial one-is, Where should welook next to develop new technologies?"

No doubt, the effectiveness of Botoxand other procedures has pressured theindustry to devise new products andat-home dermatological kits. Last year,says Carrie Melage of Kline & Co., morethan 1,000 antiaging treatments werelaunched; Clarins alone has 32 antiagingitems in its line, up from nine in 1985.

But with the pressure has comeopportunity, according to Virginia Lee, ananalyst for Euromonitor, who estimates thatthe antiaging segment of the cosmetics­business accounts for almost $11.4 billion

worldwide-and could grow to $15.8 billionby 2010. "Not everyone, after all, is inter­ested in having an injection;' she says.

To echo the instant effects of non­surgical treatments, some antiagingproducts use ingredients that make youlook better seconds after application.How? They use optical elements thatreflect light (Definity by Olay), pinkpigments that enhance skin tone (Clarins'Night Wear) and micro-size sponge-likepearls that fill in pores (Instant Smooth byClarins). Boutique product Freeze 24/7'sclaim to fame: gamma amino butyric acid,a natural muscle relaxant that temporarilyeases the appearance of fine lines.

Some cosmetics firms are even veeringinto nonsurgical services themselves.Osmotics, a boutique brand, offers LEDtreatments at the cosmetics counter insome Nordstrom stores. In January, Olay,a mass-market brand, will roll out freedrugstore skin scans with a device thatshows sun damage. The hope-the eternalone in the beauty business-is that morecustomers will buy Olay products to helpreverse the damage, or even better, to stoptime, at least for a while. •

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