Orange County has developed into a world-renowned leader in the medical device industries for heart valves and ophthalmology.
Now, investors are vetting another burgeoning industry that OC has the potential to become the de facto home base for—aesthetics.
About 385 industry execs and potential financial partners attended the first-ever Aesthetics Technology Summit held Jan. 10 at Balboa Bay Resort in Newport Beach.
The conference’s location wasn’t by accident, officials noted.
“This industry is global, and the epicenter is truly here in Southern California,” Brent Saunders, chairman and chief executive of Allergan PLC, said during a presentation at the event.
The industry’s also growing, fast. The global medical aesthetics market is expected to expand at an annual rate of 11.5% over the next five years, to reach $22.2 billion by 2025, according to recent industry market research.
“Aesthetic medicine has transformed from a luxury to a real growth industry,” added Saunders, who works out of Allergan’s New Jersey headquarters. “We can help patients look their best and feel their best.”
Representatives of the companies who appeared at the conference say they’re taking a scientifically based approach to improving one’s body, with products ranging from everything from liposuction to breast implants to hair rejuvenation.
The conference was organized by Aliso Viejo-based Octane, the business accelerator focused on technologies like medical devices, particularly ophthalmology.
“I’m really pleased to see what is happening at our first-ever aesthetic conference,” said Jim Mazzo, chairman of Octane and the global president of ophthalmology at Germany-based Carl Zeiss Meditec.
The aesthetics industry’s growth in OC is built on the base created here by other prominent technology, drug and life sciences businesses, he said.
“We’ve used our heritage of success to venture into this new area,” Mazzo said.
Center of Beauty
Allergan, the developer of the famed anti-wrinkle beauty product Botox, has long been the center of the aesthetics industry in Orange County.
However, there has been uncertainty about its future here since its sale in 2015 for $77 billion to Actavis, which resulted in its headquarters moving to New Jersey. Allergan now employs about 1,300 in Orange County, about half of the workforce it had in 2012.
Chicago-based AbbVie Inc. (NYSE: ABBV) is in the process of buying Allergan (NYSE: AGN) for $63 billion, a deal which may be completed in the first quarter.
One sign of AbbVie’s continued interest for Orange County was the promotion earlier this month of Carrie Strom, Allergan’s senior vice president, U.S. Medical Aesthetics, and the company’s highest-ranking executive in Irvine, to head a new Allergan Aesthetics unit that will be created following the sale.
Allergan Aesthetics will be based in Irvine, and the division will focus its work on cosmetic uses of Botox, the Juvéderm collection of dermal fillers and Coolsculpting body contouring products, among others.
Therapeutic uses of Botox, and Allergan eye care products—which in the past have been run out of Irvine—will be integrated into other AbbVie units elsewhere, the company said.
When Strom, who moderated a panel at the conference, asked the audience how many had worked at Allergan, about half of the hands rose.
Beauty Movers
Besides Allergan, other Orange County companies making a move in the aesthetics area and made appearances at the conference include:
• Newport Beach-based Evolus Inc. (Nasdaq: EOLS) last year began rolling out a wrinkle-free beauty product, Jeuveau, that is less expensive than competitor Allergan’s Botox. Evolus in January reported fourth-quarter preliminary sales of $18.5 million to $19.5 million, topping the $16.2 million average estimate of nine analysts. The company sports a market cap near $400 million.
• Ornovi, a startup focusing on ophthalmology and dermatology, was founded by Fauad Hasan, who was the co-founder and CEO of Bonti Inc., a Newport Beach clinical stage company that developed fast acting neurotoxin programs for aesthetic applications. In 2018, Allergan paid at least $195 million for Bonti.
• Anaheim’s BioPhotas Inc. has developed a series of Celluma light therapy devices to treat skin conditions and musculoskeletal pain.
• Irvine-based PatientFi LLC is offering credit to consumers who want to use the latest health, beauty and wellness treatments. It offers medical practices a smaller fee for providing credit than large rivals like CareCredit (see story, this page).
One of its backers is Glenn Stearns, who founded Stearns Lending LLC, a mortgage wholesaler that was sold in 2015 to Blackstone.
• Aliso Viejo-based Visionary Ventures, a venture capital fund affiliated with Octane, is looking at investing in aesthetic companies.
• Recros Medica Inc., with executive operations in Orange County, expects to bring its Nuvellus Focal Contouring system to market this year. The system uses proprietary technology to provide minimally invasive skin contouring procedures. The company raised a $14 million Series A round in November.
OC Startup Finances Aesthetics
Irvine-based PatientFi LLC won the People’s Choice Award during Octane’s LaunchPad presentations at the inaugural Aesthetics Technology Summit Jan. 10.
PatientFi and four other non-local companies were selected to present at the conference, out of 400 applicants. The additional companies were: Cypris Medical in Chicago; Dominion Aesthetic Technologies Inc. in San Antonio, Texas; Innoture in London; and Tevido BioDevices Inc. in Austin, Texas.
Uniquely, PatientFi touted its fintech product as a way for customers to finance their aesthetics-related products or procedures, while the others gave presentations on their devices addressing wrinkles, fat reduction, true pigment and more.
PatientFi aims to improve patient financing by offering loans as an alternative to medical credit cards, which are “deceptive bargains” that often result in severe interest payments after a 12-month period, equivalent to a 95% APR, according to Chief Executive Todd Watts.
Because one in three patients fail to make their payments within a 12-month period, doctors often use medical credit cards as a last resort or discount the option in its entirety.
“But I have good news,” Watts told the audience. “If every patient was presented with a payment plan, 40% of those non-patients would convert to patients.”
$1M in Revenue
PatientFi helps patients qualify for payment plans by performing soft credit checks and providing loan options through lending partners. For example, patients can pay $186 per month versus $8,000 in total for a breast augmentation procedure.
The company has also digitized the process, so doctors and staff can generate a lead for patients onsite.
Since its launch in 2017, PatientFi has processed more than 4,200 patient applications and brought in about $1 million in revenue in 2019.
The company is now focused on expanding its partnerships with financial institutions, getting its product into the hands of doctors and their staff, and, raising a new round of funding for growth.
— Jessie Yount
