We’ve been down on American business recently and its ability—or lack thereof—to come up with great new ideas. Last year’s brilliant Doritos Locos Taco gave way to this year’s derivative Fiery Doritos Locos Taco and the dreaded Burger King French Fry Burger. Large technology companies, which used to put money at risk to create brilliant new products, services, and economic ecosystems, can’t really think of anything to do with their cash. On Tuesday morning Microsoft announced that it would spend $40 billion to buy back its own shares and increase its dividend—two clear signs that it is out of ideas. Not surprisingly, the stock market shrugged at this reaction. Investors would rather hear what new profitable products and services Microsoft will create with its huge cash pile.
And yet. And yet. America still is a land of dreamers, risk takers, and idea generators. Microsoft’s stock was dead in the water Tuesday morning. But the stock of Kythera, a biopharmaceutical company, was soaring. In early trading it was up 27 percent, boosting its stock market valuation by $175 million. A nine-figure sum has just been conjured out of thin air. The reason for the rise was the favorable performance in trials of one of Kythera’s new proprietary products, which is aimed at combating a growing and pernicious human woe.
Now this company possesses the rare combination of an inscrutable corporate name (Kythera), an inscrutable product name (ATX-101), and an inscrutable active ingredient (“a proprietary formulation of a purified synthetic version of deoxycholic acid”) that treats an inscrutable medical condition (“the reduction of submental fat”) that the market seems to love.
But it’s actually quite simple. And once you translate the Latin and Greek, the whole situation might make you slightly less optimistic about America and the types of ideas it is generating.
First, the name. Kythera, as the company notes, is the Greek island in the Ionian Sea from whence hails Aphrodite, the Greek goddess of love and beauty. The company, founded in 2005, is based in Calabasas, California, which is squarely in the San Fernando Valley. By now, you may be able to guess where this is going.
Rather than focus on cures for cancer or diabetes, this biopharmaceutical company focuses on aesthetic applications for proprietary compounds. “Our objective is to develop first-in-class, prescription products using an approach that relies on the scientific rigor of biotechnology to address unmet needs in the rapidly-growing market for aesthetic medicine,” the company notes on its homepage. “Our initial focus is on the facial aesthetics market, which comprises the majority of the aesthetic medicine market.” In other words, Kythera is aiming to build a suite of products like those made by Allergan, a wildly successful biopharmaceutical company based in Southern California, that allow people to fight the ravages of time and human behavior without invasive plastic surgery. ATX-101, the company’s main product, could be the “first-in-class submental contouring injectable drug.”
To put it in layman’s terms: Kythera makes some stuff you can inject into your jowls to make your double chin melt away.
In the trial whose results were announced on Tuesday, some patients received ATX-101 dosages while others received placebos. In one of the studies, 70.3 percent of ATX-101 recipients “demonstrated a simultaneous improvement of at least one grade from baseline on the Clinician-Reported Submental Fat Rating Scale (CR-SMFRS) and Patient-Reported Submental Fat Rating Scale (PR-SMFRS) vs. 18.7 percent in placebo (p<0.001).” What’s more, 13.4 percent of the ATX-101 recipients “demonstrated a simultaneous improvement of at least two grades from baseline,” compared with zero percent for the placebo recipients. I majored in political science, not biological science, but those strike me as pretty good results. (The company didn’t return a request for comment. It held a conference call to discuss the results, which you can access on Kythera’s corporate website.)
Patients noticed the difference, too. In assessments designed to measure patients’ feelings, the recipients of ATX-101 “perceived themselves to be happier, less bothered, less self-conscious, less embarrassed, younger or less overweight after treatment with ATX-101.” Those who had received the actual drug reported better levels of self-satisfaction than the unfortunates who just got the placebo.
The company, which didn’t report any revenues in its most recent quarter, now has a market capitalization of about $750 million. And it’s no wonder investors are enthused. America is very heavy. As the nation ages, it grows more focused on appearance. And since everybody today has an avatar and is constantly snapping selfies, double chins are now more apparent and visible than ever. (I’ve learned to tilt my head on camera so that my double chin won’t be quite so obvious to television viewers.) What’s more, America seems to be exporting obesity through junk food and sugary drinks, which means double chins are likely to grow on a global basis.
Importantly, ATX-101 offers the possibility of combating double chins without surgery. As Jean D. Carruthers, a professor in the Department of Ophthalmology at the University of British Columbia in Vancouver, and one of the researchers, noted in the press release: “An undesirable double chin is often undertreated by aesthetic physicians as there is no proven non-surgical option to effectively reduce submental fat.” If this treatment is ultimately approved by the authorities, all that could change. “ATX-101 could provide a solution that fulfills this unmet need and become an important addition to the overall practice of aesthetics,” Carruthers said in the release.
There is something very American about this idea. Should it work, ATX-101 would be yet another way for Americans to have it all. They can maintain that single chin they’ve known and loved while chowing down on all the chalupas they want, all while avoiding the expense and pain of surgery. And this new breakthrough could lead to other brilliant ideas. My suggestion would be for an entrepreneur to create a chain of spas/food stands in places where double-chinned Americans tend to congregate (Disney World, state fairs.) You’d be able to get an injection while chomping on giant turkey legs and fried Twinkies.