Assistant Managing Editor

Editor's note: This article originally appeared in BioWorld Insight, which provides cutting-edge analysis of the biotech industry every Monday.

In less than two months, Fibrocell Sciences Inc.'s LaViv (azficel-T) could become the second FDA-approved autologous cell therapy, following Dendreon Corp.'s prostate cancer vaccine Provenge (sipuleucel-T) last year. But the Exton, Pa.-based biotech isn't aiming for the medical market.

Instead, Fibrocell's biologics license application for azficel-T is seeking approval for treating moderate to severe nasolabial folds and wrinkles, which would propel it into the lucrative injectable aesthetics market revolutionized by botulism neurotoxins like Allergan Inc.'s Botox (onabotulinumtoxin A) and Ipsen SA's Dysport (abobotulinumtoxin A).

The aesthetics space, once limited to expensive and invasive surgical procedures, has become a more practical – and credible – area for biotech and pharma companies. Firms like Allergan, Medicis and Ipsen have pulled in impressive revenue by branching into nonmedical indications, proving that consumers are willing to pay for FDA-approved image-improving agents, while scientists and investors get behind the innovative science. Coming up behind facial aesthetics are body-shaping therapies that allow subjects to reduce unwanted fat via a nonsurgical approach. While the marketplace is rife with products claiming to improve physical imperfections, there are very few FDA-approved products available, and the growing consumer interest leaves the opportunity wide open.

Big pharma player Bayer AG recently bought into fat reduction injectable aesthetics, inking a potential $373 million deal last fall, giving the German firm ex-U.S. rights to Kythera Biopharmaceuticals Inc.'s ATX 101 candidate. (See BioWorld Today, Sept. 1, 2010.)

"Seeing a company like Bayer make a big move like that is pretty reassuring," said Keith Leonard, co-founder, president and CEO of Calabasas, Calif.-based Kythera. That, plus the success of firms like Allergan, proves that "you can have a science-driven company with a great reputation, [while] really serving patients and consumers" in the aesthetic space.

The advantages of working in injectable aesthetics are clear. For one, that area tends to perform well even in an economic downturn. In fact, despite the recession, "the number of procedures has gone up," said David Pernock, chairman and CEO of Fibrocell, indicating that the health and beauty market segment remained largely unaffected by economic woes.

Executives of Irvine, Calif.-based Allergan even referred to Botox as the firm's "most resilient product through the recession," and its growth helped offset declines in other areas.

Targeting the aesthetics space also lets firms skirt any heath care reform fallout, since most procedures are not covered by reimbursement. Customers generally pay doctors directly from their own pockets. So last year, while big biotechs like Amgen Inc. and Gilead Sciences Inc. were dropping guidance on heath care form costs, Allergan actually revised its 2010 profit guidance upward.

And the fact that consumers are making the choice gives companies – and their investors – a "clear read on the value of the product," added Kythera's Leonard.

'A Good Place to Start'

There's no question the injectables aesthetic market is growing. In 2009, the American Society of Aesthetic Plastic Surgery reported more than 4.1 million injectable aesthetic procedures, with more than half of those – about 2.6 million – going to Botox and Dysport, both purified forms of the botulinum toxin. About 1.3 million procedures involved dermal fillers like hyaluronic acid-based products Juvederm (Allergan) and Restylane (Medicis). Market research firm iData Research has estimated the current injectable facial aesthetic market at about $860 million and growing.

Projected Botox sales for 2011 are expected to reach about $1.5 billion.

But not all of Botox's revenue comes from the anti-wrinkle market. Allergan has expanded the use of Botox into medical indications, and the product is indicated for treating cervical dystonia, blepharospasm and increased muscle stiffness. Last year, it also gained approval as a prophylactic in patients suffering chronic migraines.

Biotechs such as Fibrocell and Lithera Inc. are hoping their programs will follow in Botox's footsteps, gaining traction – and bringing in a nice revenue stream – from the aesthetics space, while moving the products into medical indications.

"What I'm trying to do strategically with the company is balance it," Fibrocell's Pernock told BioWorld Insight. "Aesthetics is a good place to start."

Fibrocell is bringing a biologics approach to aesthetics, offering what could become the first approved regenerative cellular therapy in the space – assuming the FDA grants approval by the June 22 PDUFA date.

The company's technology involves taking a small sample of skin from a patient and sending it to the lab, where only the fibroblast cells are isolated. Pernock called those cells "the work engine," which resides right under the dermis and produces collagen and other growth factors. As people age, fiboblasts stop dividing as quickly, and that slowdown is what causes skin to lose its strength and elasticity.

Two special protocol assessment-conducted pivotal studies hit their primary endpoints in 2008. Fibrocell submitted a biologic license application soon after, but a complete response letter in 2009 asked the firm to conduct an additional histological study. The application was resubmitted last year, and analysts are optimistic for an FDA nod this time around.

Rodman & Renshaw's Elemer Piros even noted that azficel-T's biologic mechanism could give it an edge over current market-leading injectable Botox. As a natural, living cell therapy azficel-T "is more likely capable of producing long-lasting improvements in facial contour defects," he wrote in a research report, whereas Botox "has a short-lived effect and may induce an immune response that reduces its effectiveness."

Piros estimates that Fibrocell's therapy could reach $1 billion in sales by 2019.

For his part, Pernock is hoping that having another option will help grow the injectable aesthetics space. "The idea of something very different and unique as autologous cell therapy could take the marketplace to a new level."

Meanwhile, the company already is moving into other markets, starting with acne scarring, for which there is no treatment currently available, he said. Additional indications include burn scarring and vocal cord scarring, both of which could be orphan indications.

And last month, Fibrocell inked a scientific collaboration with the University of California, Los Angeles, "that could pay off down the road," Pernock said.

That deal aims to research the conversion of dermal fibroblasts into pure functional human cell types that might have stronger regenerative capacity, the idea being to set the stage for potential autologous-based products for a range of diseases such as diabetes, heart disease and Parkinson's disease.

Hoping to follow a similar path is Lithera, a firm taking aim at both cosmetic and medical applications with lead drug LIPO-102, which combines two generic drugs – salmeterol, a long-acting beta2-adrenergic agonist, and corticosteroid fluticasone – to achieve fat tissue reduction, also known as pharmaceutical lipoplasty. While that drug has shown promise in midstage testing in body contouring by shrinking abdominal fat, the San Diego-based firm also is moving LIPO-102 forward in exophthalmos, an orphan medical condition associated with thyroid diseases that causes fat to accumulate around the orbit of the eye and makes the eyeball protrude.

Beyond that, LIPO-102 could have potential applications in lipomas, which are fatty tumors, as well as HIV-associated lipodystrophy.

Medicine 'Moving Toward Aesthetics'

For Kythera, however, the injectable aesthetics space is opportunity enough. In the U.S. alone, the market for submental fat (under the chin) reduction candidate ATX 101 could hit peak sales of more than $500 million annually. Ex.-U.S. sales could reach a similar range.

An injectable, small-molecule, ATX 101 has started Phase III testing in Europe, with a U.S. pivotal study slated to start by the end of this year. Using a procedure similar to the Botox treatment method, ATX 101 is injected into the submental area using small needles.

The procedure can involve as many as four to six minimally invasive injections and is a "gradual and very nice process," that has shown significant improvements in six months, Leonard said, with data from a recent Phase IIb study showing solid results, as measured by a clinician scale, a patient-reported outcome scale and magnetic resonance imaging.

ATX 101 is designed to work by disrupting the membrane of fat cells, allowing the adipocytes, "the little storage units for triglycerides," to spill out into the extracellular space, where they are later cleaned up by the body, Leonard said. The area returns to normal in a few days, minus the fat cells.

While the science might not be of great interest to consumers – dramatic "before" and "after" photos and an FDA stamp of approval carry more weight in that sector – it helped Kythera secure investments from the likes of big-name life sciences venture firms Arch Venture Partners, Versant Ventures and Prospect Venture Partners, despite the fact that Kythera currently has no plans to move into the medical arena.

"Even though we're focused on the consumer market, [those investors] are really investing in us because they believe in the science and in the approach," Leonard told BioWorld Insight.

The market potential doesn't hurt, either, especially since there are no existing injectable treatments for reducing submental fat. Patients' only option now is surgery.

Given the improvements in science and the growing consumer interest, the injectable aesthetics market is unlikely to stop at wrinkles and fat reduction. After all, the space is a reflection of people's behavior and desires to improve their images, Leonard said. It's not a case of companies trying to sell dermatologists on aesthetic medicine, but rather "the practice of medicine in those offices moving toward aesthetics.

"It's a trend, and we're happy to be going along."