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1/4/2010
On the mend? Fillers, toxins market resilient, due for possible bounceback, analyst says
While the worst economic slump in decades has sharply cut into consumer demand for aesthetic products, at least one analyst says there's reason to anticipate a bounceback in the coming months.
On the mend? Fillers, toxins market resilient, due for possible bounceback, analyst says

While the worst economic slump in decades has sharply cut into consumer demand for aesthetic products, at least one analyst says there's reason to anticipate a bounceback in the coming months.I wouldn't call the market strong, but I would say it's relatively resilient, as compared with other consumer products and discretionary-spend items," says Peter J. Bye, medical supplies and technology analyst for New York-based investment firm Jefferies & Co.
Meanwhile, dermatologists say that while their practices have suffered somewhat, there is reason for optimism. The recession has even opened new opportunities for some.
The economic downturn has impacted my practice in that patients no longer schedule their appointments at regular intervals," says Tina S. Alster, M.D., clinical professor of dermatology at Georgetown University Medical Center, Washington.
"They are trying to buy a bit more time from each injection or laser treatment and waiting longer between appointments," she says.


Dr. Alster
So instead of returning for appointments three or four times a year, patients are returning two or three times a year, Dr. Alster says.
"This has provided my practice with an opportunity to open our doors to new patients who would've had difficulty scheduling consultations within a reasonable time frame prior to the economic downturn," she says.
Scaling back

Consumers have sharply scaled back their demand for dermal fillers and toxins.

Philip Werschler, M.D., assistant clinical professor of dermatology at the University of Washington School of Medicine, Seattle, and president of the American Society of Cosmetic Dermatology and Aesthetic Surgery, says his patients are "trading down, opting for injections instead of surgery, creams instead of injections, and so forth.

"In terms of purchasing psychology, patients are looking harder than ever for the best value in procedures not just the cheapest, but the best overall combination of skill, product and safety," he says.

Mr. Bye's firm estimates that sales of botulinum-toxin products have declined globally by 5 to 6 percent in dollar terms, but are essentially flat excluding the impact of foreign exchange.

"We think therapeutic usage is still growing, while cosmetic usage has declined by roughly 12 to 14 percent year-to-date on a global basis and is even down 7 to 10 percent in constant dollar terms," he says.

Fillers drop more

In the facial aesthetic fillers market, the decline has been even steeper, Mr. Bye notes between 15 percent and 20 percent this year in dollar terms, "from the 40-plus percent growth in 2007 and the 5-plus percent growth in 2008."

Even botulinum-toxin giant Botox (onabotulinumtoxinA, Allergan) has not been immune to the downturn. Allergan spokesperson Caroline Van Hove says Botox sales decreased in the first nine months of 2009 compared with the first nine months of 2008.

"This is primarily due to the negative impact of a general weakening of foreign currencies compared to the U.S. dollar on our international Botox net sales, declines in consumer spending in most of our principal geographic markets, and the introduction of a competitive product in the United States in the third quarter of 2009," she saysUpturn ahead?

Still, heading into 2010, Mr. Bye says, "We are assuming cosmetic growth bounces back some."

However, he says, "We also expect revenue to be more challenged than procedure growth, as we are expecting a rebate war of sorts to heat up a bit between Medicis and Allergan."

That war will be fought most visibly in the toxins market, between Allergan's Botox and Ipsen/Medicis' Dysport (abobotulinumtoxinA), which won Food and Drug Administration (FDA) approval in April.
Botox likely will have even more competition in the fairly near future: Mr. Bye says he expects two companies to each introduce a botulinum toxin A product to the U.S. market by 2012.

"One is from Merz Pharmaceuticals, a private German company that already has its toxin A product, Xeomin, approved in Germany for cosmetic indications, and is awaiting approval in other European countries," he says.

"The other company is Johnson & Johnson, which acquired PurTox when it bought Mentor earlier this year. We expect an FDA filing by J&J for PurTox some time in the first half of 2010."

'Naked' toxins

Dr. Werschler notes both PurTox and Xeomin are type A toxins, similar to Botox and Dysport.

"The difference is that PurTox and Xeomin are referred to as 'naked,' because they lack a surrounding protein coat," he says. "This means that there will be two classes of type A toxins, 'complex' and 'naked.'

"It's not clear yet how that will play out," he says. "But with the marketing power of J&J, expect to see the direct-to-consumer marketing volume turned up a few notches."

Mr. Bye says that among fillers, Radiesse (calcium hydroxylapatite, BioForm Medical) and Juvderm (hyaluronic acid, Allergan) have been clear share winners in recent months. He notes that though Radiesse has the smallest market share among the leading filler brands, it has been the most resistant to the economic downswing.

In the near future, he says, new developments in the fillers niche will see companies adding lidocaine to some of their existing formulations.

"But, honestly, we don't see anything coming down the road in the fillers market that would change the current dynamics much," he says.

Fillers reformulated

Popular fillers Juvderm and Restylane (hyaluronic acid, Medicis) are being reformulated to include lidocaine, notes Joel Schlessinger, M.D., director of Skin Specialists P.C., Omaha, Neb. He says FDA approval could come in six months for Restylane with lidocaine, and perhaps in a year for the reformulated Juvderm.

Boston-based dermatologist Ranella Hirsch, M.D., notes there is another dermal filler on the market that while it may not change market dynamics much is rather unique.

"Selphyl (autologous platelet/fibrin matrix) is a new FDA-approved dermal filler from UBS Aesthetics that encourages natural cell regeneration and uses patients' own blood to activate a platelet-rich fibrin matrix via a centrifuge process," she says.

"The product that results is applied as a liquid or gel to the desired treatment area to stimulate new tissue growth, and then injected below the skin surface," she says. "It's not yet in wide use, but early reports are promising."

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