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THE GLOBAL AESTHETIC SCIENCE INDUSTRY: OBSERVATIONS FROM AN INVESTOR

American Society for Laser Medicine and Surgery Kissimmee, Florida Craig A. Drill April 21, 2012

This handout accompanies a talk given at the American Society for Laser Medicine and Surgery Annual Conference in Kissimmee, Florida on April 21, 2012. It is for informational and educational purposes only. It does not constitute investment advice. It also does not constitute an offer to sell or a solicitation of an offer to purchase an interest in any investment vehicles managed by Craig Drill Capital or any associated person or entity. Any such offer or solicitation may only be made to eligible persons by means of approved offering documents. Craig Drill Capital or any associated person or entity does not accept any responsibility or liability arising from the use of this report. The information provided herein is subject to change without notice. Craig Drill Capital or any associated person or entity may have a financial interest in one or more of the companies discussed. This handout is furnished on an as is basis. No warranty or representation is being made regarding its accuracy or correctness or as to the use of it for any purpose.

TABLE OF CONTENTS
THE SEARCH FOR THE FOUNTAIN OF YOUTH.................................................... 5 THE GLOBAL AESTHETIC SCIENCE INDUSTRY.................................................. 6 Selective Photothermolysis ................................................................................................. 8 Non-Selective Photothermolysis ......................................................................................... 9 Selection of Targets by Other Methods ............................................................................... 9 Lasers Remained Directed to Medical Applications ......................................................... 10 The Birth of the Aesthetic Science Industry: Vanity and Greed ...................................... 10 Caveat Emptor ................................................................................................................... 11 Three Powerful Drivers ..................................................................................................... 12 Current Industry Conditions .............................................................................................. 13 The Global Marketplace .................................................................................................... 15 Recurring Revenue Models ............................................................................................... 15 The Platform Approach ..................................................................................................... 15 The Companies .................................................................................................................. 16 THE AT-HOME CONSUMER MARKET ................................................................... 18 Do Less More Frequently .................................................................................................. 18 Business Models ................................................................................................................ 18 Safety and FDA Clearance ................................................................................................ 20 Cost Sensitivity .................................................................................................................. 20 Hair Removal..................................................................................................................... 20 TRIA ................................................................................................................................... 21 ZAP .................................................................................................................................... 22 Procter & Gamble .............................................................................................................. 22 PaloVia Skin Renewing Laser ........................................................................................... 22 Wrinkle Reduction............................................................................................................. 24 Acne Treatment ................................................................................................................. 25 The Future is Not What it Used to Be ............................................................................... 25 NEUROMODULATORS................................................................................................ 27 DERMAL FILLERS ....................................................................................................... 29 TOPICALS ....................................................................................................................... 31 Physician-Dispensed Topicals ........................................................................................... 31 Latisse ................................................................................................................................ 32 Over-the-Counter Topicals ................................................................................................ 33 Cosmetics versus Drugs .................................................................................................... 33 THE ENERGY-BASED DEVICES ............................................................................... 34 PHOTON ENERGY ........................................................................................................ 36

The Relative Absorption of Photon Energy ...................................................................... 37 Melanin as a Chromophore ............................................................................................... 37 Hemoglobin as a Chromophore ......................................................................................... 38 Lipids as a Chromophore................................................................................................... 39 Reflection, Scattering, and Absorption ............................................................................. 39 Ablative Resurfacing ......................................................................................................... 41 Non-Ablative Rejuvenation ............................................................................................... 42 Fractional Photothermolysis .............................................................................................. 43 Ablative Fractional Resurfacing .................................................................................... 45 Non-Ablative Fractional Resurfacing ............................................................................ 46 Lasers for Fractional Delivery ........................................................................................... 47 Patents for Fractional Technology..................................................................................... 48 Low-Level Laser Therapy ................................................................................................. 49 Non-Thermal Interactions ................................................................................................. 49 PLASMA ENERGY ........................................................................................................ 50 RADIOFREQUENCY .................................................................................................... 51 Monopolar and Bipolar...................................................................................................... 51 Fractionated RF .............................................................................................................. 52 HIGH-INTENSITY FOCUSED ULTRASOUND ........................................................ 54 Cavitation .......................................................................................................................... 55 A Fractional Approach ...................................................................................................... 56 Existing Ultrasound Systems ............................................................................................. 56 Image and Treat ................................................................................................................. 57 Pain, Sequelae, and Safety................................................................................................. 59 Limitations ......................................................................................................................... 59 MICROWAVE ENERGY .............................................................................................. 61 CRYOLIPOLYSIS .......................................................................................................... 62 MESOTHERAPY ............................................................................................................ 64 FAT REDUCTION AND BODY CONTOURING ...................................................... 65 Laser-Assisted Lipolysis ................................................................................................... 65 Other Forms of Fat Reduction ........................................................................................... 67 High-Intensity Focused Ultrasound ................................................................................... 67 Body Shaping Versus Obesity ........................................................................................... 68 CELLULITE .................................................................................................................... 70 Cellulaze ............................................................................................................................ 70 Treatment with Radiofrequency ........................................................................................ 70

ACTINIC KERATOSES ................................................................................................ 72 TATTOO REMOVAL .................................................................................................... 74 R-20 and R-0 ..................................................................................................................... 75 Picosecond Lasers ............................................................................................................. 75 PicoSure ............................................................................................................................ 76 VANITY OF VANITIES ................................................................................................ 77

THE SEARCH FOR THE FOUNTAIN OF YOUTH Thank you for inviting me to offer some observations this morning from an investors viewpoint on this industry which you all know so well. This accompanying hand-out represents an effort to understand this science-based industry in common sense terms. Please do not expect it to have a laser focus (pardon the pun) leading to coherent conclusions. In terms of my disclosures, I was an English major and do not have a Ph.D. in physics. But this is an advantage I will not give up lightly! Here in Florida, six hundred years ago next year, a Spanish conquistador, Ponce de Len, searched for the Fountain of Youth. Today, we continue in this search to find what will be the next top-tier breakthrough technologies; what will be the wow products that fill unmet, if not unarticulated, consumer needs; what will be the changes that will affect peoples lives; and where will be the next Apple in the aesthetic science industry? As we seek forever promising technologies, we expect failures clinically and in the stock market (but not necessarily both). Sometimes there is an inverse relationship with the quality of a companys products and the price of its stock. We are staying alert for developments in the areas of: fat pain acne aging melanoma and basal cell carcinoma wound healing and bioelectrical response to energy combination of drugs and non-invasive energy transdermal delivery of large molecules hair growth scars -- an abnormal response to injury -- injured again to return to a more normal condition rejuvenation of the skin, but generating new, not old skin rejuvenating not just the skin with fractional, but also other tissue, such as heart muscle or the gums, which Dental Photonics is doing to treat periodontal disease reduction of costs by longer production runs, such as picosecond lasers being used by the automobile companies to provide the spark for spark plugs the at-home market, where brand-name, non-invasive, energy-based devices are coming to our bathroom sinks

THE GLOBAL AESTHETIC SCIENCE INDUSTRY The global aesthetic science industry has boomed beyond the vision of the founders of the American Society for Laser Medicine and Surgery. The industry is no longer American, as the below chart shows.

The leader in the energy-based device industry is, in fact, an Israeli company. With its acquisition of Candela, Synerons product and service revenues in 2011 ($228 million) were approximately the same as the total of Palomars ($65 million after subtracting royalty revenues), Cuteras ($60 million), and Cynosures ($111 million). In addition, the fastest growing markets are outside the U.S. The Asia-Pacific market is growing at a 25% growth rate and the Latin America-Hispanic market is growing at about 15%. Also, the industry is also no longer just about lasers or, for that matter, just about devices. It is also about procedures, which are keeping the waiting rooms full. Devices and procedures now run the gamut from: neuromodulators dermal fillers physician-dispensed cosmeceuticals

topicals

and

wide

variety

of

direct-to-consumer

to energy-based devices, such as: lasers intense pulse light (IPL), with its very low manufacturing cost and unexpected degree of efficacy low-level light therapy (LLLT) radiofrequency (RF) with a variety of grounding and polar options high-intensity focused ultrasound (HIFU) in various forms of focused energy patterns cold/freezing-based technologies for manipulation of fat and muscle action, i.e. cryolipolysis

to other aesthetic approaches, such as: the injection of therapeutic agents, i.e. mesotherapy the topical application of drugs and their activation by energy sources, i.e. photodynamic therapy the use of stem cells, fat transfer, and cloning

to other medical and cosmetic applications, such as: the enhancement of the delivery of drugs, cosmetic compounds, and stem cells by the use of fractional devices tissue copying and culturing wound healing musculoskeletal therapy with ultrasound and other energy sources

stroke therapy, decreased inflammation, and pain relief with LLLT

not to forget the older applications, such as: dermabrasion chemical peels plastic surgery

The table below from the American Society for Aesthetic Plastic Surgery shows the minimally-invasive procedures performed in 2011 versus 2010 and 2000.

Finally, the industry is no longer a purely about medicine, with treatments delivered by licensed medical professionals. The consumer can obtain variations of these treatments through the internet and brick-and-mortar retail establishments utilizing marketing personnel. At-home energy-based devices will also not require either a prescription or physicians supervision. I will bet that lasers are no longer the focus of a majority of the papers at this conference. I am also sure that a majority will regard aesthetic rather than medical applications. Selective Photothermolysis Many think of this industry as having begun in 1983 with a seminal paper on selective photothermolysis (SP) by Rox Anderson and John Parrish. SP is the subject of hundreds of

peer-reviewed papers that show both the functional utility and the predictive value of the theory. This paper conceptualized how to use lasers to perform surgery non-invasively on a microscopic level by selecting both: the wavelength which is selectively absorbed by the targeted tissue or chromophore, which causes selective heating of the targeted tissue, sparing adjacent tissue the corresponding pulse duration which is equal to or shorter than the thermal relaxation time of that target, so that the target can be preferentially heated and destroyed or damaged without transferring significant amounts of energy to surrounding tissue

They did not patent these simple, but revolutionary ideas, thinking they were self-evident. Non-Selective Photothermolysis SP paved the way for aesthetic energy-based medicine, but, in a way, what is done today is much more on the non-selective injury side. Whenever collagen is treated, non-selective injury is occurring to some portion of the skin. It is the healing process that is creating the good aesthetic result. Other than targeting hair and vascular and pigmented lesions, the procedures are not selective any more. To a large extent, it was IPL that made this happen, not that it was planned this way. The discovery was that when a full face was treated to remove redness (small vessels), it actually produced much better looking skin. Selection of Targets by Other Methods There are also other ways today to be selective that do not depend upon the principles of SP. For example, the dermal/subcutaneous junction provides a change in impedance that can create a heating zone for radiant energy. Microwave energy is using this natural target to disable eccrine glands just below the junction in the treatment of primary axillary hyperhidrosis. HIFU devices can also select targets by depth. For example, a device can be set to a depth of 3-4 millimeters to disable eccrine glands. These glands reside equidistant below the surface of the skin in most patients. Cryolipolysis can also be used to select target fat cell apoptosis in subcutaneous fat without causing damage to the overlying skin and surrounding tissue through the controlled use of local skin cooling. The lipids within the fat cells crystallize at temperatures above freezing of water molecules, thereby damaging the fat cells while sparing surrounding tissue, including skin, nerves, vessels, and muscles.

Lasers Remained Directed to Medical Applications Despite the breakthrough conceptualization of SP, over a decade later, by the beginning of 1994, lasers were still primarily directed to medical applications -- especially in ophthalmology and general surgery -- rather than to aesthetics. To use lasers for aesthetic purposes was considered by many to be below why I got a medical degree. There was, however, a basic core of laser physicians, including Fitz Fitzpatrick, who were hard at work trying to expand the aesthetic field. The primary treatment targets were red and brown birthmarks, blood vessels, scars, and tattoos, as well as some epidermal lesions. But, back then, not so long ago, there were no effective methods available to protect the epidermis. Leon Goldman had tried using cold water as a heat sink while using lasers in the early 1970s. Cyrus Chess developed a water cooled plate that could be applied to the skin just antecedent to the laser impact, but the wide variation of cutaneous response made these early attempts less than satisfactory. Some articles had also been written by Barbara Gilcrest about using ice. The giant step forward was yet to come: Rox Andersons and Bill Farinellis development of contact sapphire cooling. Stuart Nelson was still two years away from inventing a form of dynamic cooling using a spray refrigerant. The Birth of the Aesthetic Science Industry: Vanity and Greed The birth of the aesthetic science industry very well could have been at a time and in a place not generally recognized: on July 13, 1994 on Wall Street. Its parents might not have been physics and biology, but vanity and greed. ThermoLase, a spinoff from ThermoElectron and Thermotrex, went public at a $96 million pre-money valuation. ThermoLase had been assigned a patent by Nikolai Tankovich for the permanent removal of hair with a laser targeting microscopic pieces of carbon in the hair duct. ThermoLase submitted a 510(k) application at the end of 1994, and the company was surprised -- and unprepared (it had yet to hire a full-time CEO) -- to receive FDA clearance only four months later. The stock jumped 73% on the day of the announcement. Greed was unleashedand the aesthetic science industry was born. ThermoLase announced a daring business model. It would not sell a short-run of boxes, but would create a recurring revenue stream. It started to roll-out a network of high-end spas to capture the whole gross margin of the service. Later, it opened a second channel of distribution to physicians, putting for the first time a meter on the laser and charging a perprocedure fee.

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At Controversies in August 1995 in Bermuda, Roy Geronemus jumped into the center aisle at the end of a positive presentation, saying, But this doesnt work! Rox said later, Not only doesnt this work, it will never work. But the bubble started to float, and, as we know, bubbles always float higher and longer than anyone expects before they burst. In April 1996, the stock hit a peak of $36.38, giving a market cap of $1.5 billion. ThermoLase could have easily consolidated the industry. At the time, Candela had a market cap of $9 million, Palomar $33 million, and Laser Industries $35 million. Cynosure and ESC Medical (now Lumenis) were still private, and Cutera and Solta were not even venture capital ideas. Then, from its high, the stock lost 92% of its value. ThermoElectron was forced to buy back what remained of its child. Besides the difficulty of getting the carbon into the hair duct, the photons were causing the microscopic particles of carbon to explode, transferring the photon energy into mechanical energy, which dissipated the square of the distance. What was needed was a controlled thermal transfer to the follicular stem cells (which are not pigmented). Success was to come in the following year with the launch of the ruby and alexandrite devices for hair removal. The industry has moved so fast that these devices are now considered mature applications of old technology. The rise and fall of ThermoLase is a story rich in lessons. But the lasting impact is that ThermoLase had uncovered powerful, unmet demand at the intersection of beauty and medicine. It introduced the concepts of consumer marketing and brand building to an industry dominated by physicians, engineers, and physicists. And it left a gold-rush promise for entrepreneurs that big money could be made. Caveat Emptor The ThermoLase story is also a reminder that the industry has been filled with a great deal of, to say it politely, misinformation: Studies are often limited by small patient groups and a failure of results to reach statistical significance. Photographic comparisons can mislead due to changes in lighting, positioning, body tension, makeup, and patient weight change.

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Measurements of circumference by tape can be manipulated by two centimeters just if the patient tenses or relaxes or by slight positioning variation or tension on the measuring tape. Sometimes a simple inflammatory response with associated edema will appear as an improvement of photodamage or acne scarring only to disappear in the ensuing month. Some postulated biological wound healing responses have no foundation in the scientific method or common sense. With some of the injectables and devices, the quality of the results (or, worse, the frequency of disastrous outcomes) varies with the training and skill of the physician or designee using the device. Manufacturers may use words differently, e.g. pitch or density -- a parameter that contributes to the degree of tissue fractional ablation -- is defined differently by different manufacturers, making direct comparisons difficult. Manufacturers equipment can vary in output spectrum, pulse duration, pulse shape, intensity, repetition rate, and cooling characteristics, as well as ease of maintenance and use of consumables. Treatment parameters are well-established for some devices, but not for all. More often than not, device specifications are written to confuse rather than educate, and they provide practically no meaningful information at all. Doctors themselves are also sometimes sloppy in their use of terms, e.g. Joules can be shorthand for fluence (J/cm2).

The blinded, bilateral use of untreated control groups is important in assessing true efficacy. Claims that cannot be observed via objective, reproducible means with adequate controls and histology should be suspect. MRIs can provide objective measures of improvement for fat reduction. Standardization of results, however, is difficult, and little work has been done in this area. Three Powerful Drivers The industry has three powerful drivers: Strong consumer demand to look better and younger. Consumer demand is influenced by media and culture, but it is also in some sense hard-wired. In the U.S., the majority of consumer demand is women in the 35-50 year-old age group. They want to look like themselves, only a younger version. They prioritize their face and are willing to

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spend heavily on creams and lotions, but often are unhappy with the result. Yet, surgery is too big a step. This is the space in-between that aesthetic science fills. Innovation is working and the pipeline is strong. Aesthetic treatments have become safe, efficacious, non-invasive (or minimally invasive), painless (or have good pain management), and have no or little downtime (a lunchtime procedure). A combination of neuromodulators, fillers, and fractional laser treatments can make the right patient look 10 to 20 years younger. According to the American Society for Aesthetic Plastic Surgery, almost 9.2 million cosmetic surgery procedures were performed in the U.S. in 2011, up from 2 million in 1997, with more than 90% of the growth coming from non-invasive procedures. Strong physician demand for cash-pay businesses. These cash-pay procedures enable physicians to get out from under the reimbursement risks and red tape of healthcare. They want new sources of revenue with quick returns on investment.

The table below from the American Society for Aesthetic Plastic Surgery shows average physician fees for cosmetic minimally-invasive procedures.

Current Industry Conditions This is a young industry with an exciting future. BOTOX was only cleared for glabellar lines in 2002; Juvderm for facial wrinkles and folds in 2006; Fraxel for melasma in 2005; Ulthera for eyebrow lift in 2009; and CoolSculpting for selective reduction of love handles in 2010.

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The graph on the next page shows the dramatic growth in nonsurgical cosmetic procedures from 1997 to 2010. Procedures were flat in 2011, still impacted by economic weakness and a lingering credit crunch affecting small businesses, such as physician practices.

Credit is now being extended again to physician offices that have been in business for at least two years and have a credit rating of 650 or higher. Pent-up demand may be high, both for the consumer and for the physician. Procedure rates are improving and sales reps are reporting a lot more lead generation and demo requests. Unlike more mature therapeutic device categories, the severe recession and credit crunch resulted in little average selling price or margin compression for the manufacturers. New applications, cost reductions, and geographical expansion are offering growth opportunities. Sales growth will translate to good earnings growth for the companies. Operating leverage is high, with materials being about 15% of costs, labor 10%, and sales and marketing 10%. The industry remains, however, fiercely competitive in the development of technology, the selling and pricing of equipment, and in the prosecution of patent infringement. For example, Palomar has licensed its hair removal patents to Alma, Candela, Cutera, Cynosure, Ellipse, Iridex (the aesthetic assets of which were acquired by Cutera in February 2012), Jeisys, Lumenis, New Star, Procter & Gamble, Quantel, and Syneron and is suing TRIA Beauty.

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Some innovation is moving overseas because it has become more difficult in the U.S. for doctors to work in partnership with corporations. Corporations that follow Pharmacode as well as Advamed have had to apply the same approach to reimbursed businesses as to the cash-pay segment. Also, the clearance times to get products to market in the U.S. today are much longer today than what they were in the past. The Global Marketplace The marketplace can be viewed as being pyramid-shaped, with the peak being represented by a traditional core market consisting of 20,000 dermatologists and plastic surgeons in the U.S. (11,000 dermatologists and 9,000 plastic surgeons). An additional 40,000 are outside of the U.S. Two other core users include ENT facial plastic surgeons and oculoplastic surgeons. Further down on the pyramid is the larger group in terms of number of physicians in the noncore market. This consists of 160,000 general practice physicians and other medical specialties in the U.S. (60,000 in family practice, 30,000 OB/GYN, and 70,000 in internal medicine). An additional 300,000 are outside of the U.S. Even further down the pyramid, there is the physician-assisted market. In the U.S., this encompasses 2,500 medical spas and salons. At the base of the pyramid, there is the consumer at-home market. Also, someday, the larger market may include additional channels of distribution, such as the large dental channel, where a private company, Dental Photonics, Inc., is well positioned with a disruptive technology. Recurring Revenue Models Manufacturers want to shift from the traditional business model of selling plug it in the wall capital equipment to a tip component or pay to click model. Thermage CPT, for example, utilizes one tip per treatment at a $400 ASP, a sharp drawdown on the physicians margin. Most successful medical device businesses rely heavily on the consumable/disposable revenue model. Although physicians take umbrage at being charged fees per treatment, it does incentivize the manufacturer to put a lot of effort into practice development. The Platform Approach Equipment is increasingly being offered on platforms with multiple applicators or hand pieces rather than on a stand-alone basis. The platform allows the user to change the critical settings to treat multiple targets with one device.

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The platform approach is a more effective way for the physician to upgrade to additional applications, to lower costs, and to achieve higher utilization and a more rapid return on investment. The platform model can also be more attractive versus one-trick pony equipment with a high use of disposables/consumables. Moreover, the platform design allows manufacturers to lower the cost of components and labor. This results in higher manufacturing leverage and gross margins. The majority of platforms trade off performance compared to the gold standard, singleprocedure lasers that are optimally designed for specific applications. Platforms are in highest demand in the non-core markets. Platforms limit the use of the equipment, since only one hand piece can be used at a time. Changing a hand piece takes about 3-5 minutes, including resetting parameters. Additionally, if the base module is non-operative, because it needs service, now the physician has no separate tools to use. This may cause rescheduling a days worth of business. It may also take a few days or longer to have the instrument repaired. Most companies offer service contracts, but these contracts run around $7,500-12,000 a year for each module and hand piece. The added cost may be as much as $5,000-6,000 a month for one of these multi-headed units. Practitioners, however, can buy a second platform, put it in another room, and have several shared laser/IPL hand pieces between rooms that can perform many applications. This second base platform costs less than most single procedure lasers. This room throughput is the way companies typically think about device design these days. High-volume offices can justify single-use equipment. Low-volume offices are better served by the lower cost Swiss Army Knife approach, as long as patient safety is not traded off in the process. The Companies Six often mentioned publicly-traded companies in the industry are Cutera (CUTR), Cynosure (CYNO), Palomar (PMTI), Solta (SLTM), Syneron/Candela (ELOS), and ZELTIQ (ZLTQ). The cumulative results of these companies for 2011 was $687 million in revenues, with a loss of $74 million and negative cash flow of $37 million. As a group, they are trading at an enterprise value/sales ratio of 1.1. There is also a long list of private and developmental-stage companies, many of which are non-device companies. These include Aerolase, Aesthetic Factors, Alma, Anika, Apira, Astanza, Axia, biolitec, Biopelle, BTL, Canfield, Celleration, chromogenex, Contura, CosmoFrance, Dental Photonics, Edge, Ellipse, ellman, EltaMD, Energist, Epionce, Erchonia, Eufoton, Eun Sung, Exilis, FiberTech-RoMack, Fibrocell, Focus Medical, FotoFinder,

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Fotona, Guided Therapy Systems, Hironic, Home Skinovations, Human Med, Ilooda, Imastar, INDUSTRA, Innovative Skincare, Intellectual Light, Invasix, Jan Martin, Jeisys, Kaylight, KLaser, KYTHERA, Lasering USA, Lifecore Biomedical, Lifestyle Lift, Light Age, Lithera, Lucid, Lumenis, Lutronic, Medicol, Modulated Imaging, Miramar, mybody skincare, Myoscience, Nouveau Contour, ON Light, Osyris, PhotoMedex, Phytoceuticals, Pollogen, Ra Medical, Real Aesthetics, Refine, Regenlab, Revance, RPMC, Sandstone, Sanuwave, Sciton, Sesderma, Serene, Shaser, SkinMedica, Sound Surgical, Stiefel Laboratories, Strathspey Crown, Theravant, Toxin Science, TRIA Beauty, Ulthera, Valeant, Veinwave, Venus, Viora, WON, Zeno, and Zerona. Deka Medical, with the brand name DEKA, is a division of El.En. Group, which is listed on the Italian stock exchange. Quanta System is 60% owned by El.En. Group. Many private companies are having difficulty raising money and are forced to sell out to other companies at a loss to investors. They try to time going public when sales are on a sharp upswing so that investors will extrapolate and pay up for projected earnings with a price/earnings multiple. Consolidation by the publicly-traded companies has been held back ostensibly by overlapping product lines and distribution. Unspoken reasons may also have to do with CEO ego clashes over who will run the new companies, and weak governance at the board level.

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THE AT-HOME CONSUMER MARKET The consumers secret desire may be to do many of these vanity procedures in private. Consumers want to feel empowered to make their own decisions about these personal matters. They do not want to look like someone else. They want to turn back the clock on their appearance, but in a way that looks natural. Lines, wrinkles, skin laxity, and blemishes appearing on their face are inconsistent with their self-image. They want to look into the mirror and see in the reflection how they feel about themselves. They want to look like a younger version of me. They want to feel better about themselves and be more competitive in the workplace. They do not want to feel that looking better is a medical procedure. Women take great pride in daily, anti-aging beauty regimens. They believe that their skin communicates how well they care for themselves. Many consumers are reluctant to seek professional help for vanity procedures. Being treated in a doctors office typically costs over $1,000, especially because of the multiple treatments required. Also, visiting a doctors office requires time and perhaps arranging for a babysitter. Moreover, many consumers do not even know the name of a dermatologist or plastic surgeon. Products developed for home use offer personal convenience, privacy, and comfort. Of course, consumers need to be assured that the procedures are safe and do not involve pain, downtime, or side effect risks. Do Less More Frequently In-office treatments have evolved to use a lot of power over a little time. At-home treatments are just the opposite. In accordance with Dieter Mansteins profound principle, do less more frequently, the body may actually respond better to certain treatments at home. This may be particularly true for maintenance-type applications, such as temporary hair removal, treatment of wrinkles, acne, onychomycosis, and cellulite, and even relief from pain. Certainly, this principle is not true for permanent hair removal or most other non-fractional treatments. As Robert Groves Law states: You cant boil a pot of water by heating it a little each day. Business Models Specialty retailers are excited about this high-tech, anti-aging beauty category. It is differentiated from lower-end lotions and potions, and some of the newer devices really work.

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Also, the higher price points provide more margin dollars. The home-use aesthetic device market is growing at a compounded annual rate of perhaps 25%. This is separate from such blockbuster global markets such as teeth whitening and fluorination and skin lightening. Most at-home health and beauty devices have been short on efficacy and long on placebo. Most are nothing more than expensive toys. There is little evidence-based science in them. A new wave of effective and safe devices, however, has become a reality. The TRIA diode laser, for example, effects permanent hair reduction with home use and retails for under $400. It has been the subject of formal clinical trials published in a major, peer-reviewed medical journal and is FDA-cleared. The major consumer health and beauty companies are taking a wait-and-see approach due to brand risk. In addition, a large up-front investment in marketing and tooling is necessary to achieve a low price point for the mass market. The advancing science and the large, unmet consumer needs are real. Ultimately, OTC nonablative devices are going to be hugely successful. This is going to be a crowded space. The opportunity for box companies to partner with consumer product companies is a log-scale jump. Because of safety and comfort concerns, home-use devices will be limited to a few lowenergy settings, fixed pulse durations, single fixed filters for IPL, small treatment areas without any option for skin cooling, and will be effective for fewer skin types compared to professional systems. Energy levels must relate also to frequency of use. Selling a beauty device to the consumer is markedly different from selling lotions and potions and selling to the professional market. It requires different strategies concerning cost, branding, distribution, public relations, training, and communications materials. Of course, any effort will be wasted if it is not backed by strong IP. Some at-home devices are positioned to be sold by doctors to help patients maintain results following professional treatment. For physicians dispensing home devices, however, high costs translate into a reluctance to carry inventory, which limits distribution. Some at-home device marketing may focus on high-end, specialty retailers and TV channels to reach consumers who would not otherwise seek professional services. Teenagers and senior citizens often like to experiment with new skin care products, but are not comfortable visiting a professional for treatment.

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Safety and FDA Clearance At-home devices will incorporate passive and active safety features, both mechanical and electrical, that eliminate risks for damage to the retina, cornea, lens and iris. They will also prevent epidermal damage to all skin types, whether dark or suntanned. For example, the retina eye-safe characteristics of diode lasers above 1400 nm is derived from high water absorption and the fact that there is an inch of water in the eye before the photons can reach the retina. Scarring the cornea, however, is at the other end of the ocular safety spectrum and needs to be evaluated. Just because the energy does not make it to the retina does not necessarily make it safe from an ocular perspective. FDA 510(k) OTC clearance means that the device is safe if used according to the written instructions, and that the consumer can be reasonably expected to understand and follow those instructions. Clearance also means that the device is substantially equivalent in technology, intended use, and clinical outcomes to an existing predicate device. 510(k) clearance can sometimes be granted in the absence of any clinical data, but solely on similarities from an engineering perspective. In the past, FDA clearance has little implication as to whether the device is, in fact, efficacious. New medical device regulations, however, will likely require additional clinical data. Cost Sensitivity Reaching the consumer with a commercial message sufficient to result in a purchase decision can be extraordinarily expensive. Of consequence, most consumer beauty products require a gross profit margin of 80% or more, allowing adequate funds for marketing. It is hard for a small company to pay for a Super Bowl ad! In order to achieve true mass-market potential of millions of units sold, retail price points below $200, perhaps even $125, may be essential. This will be difficult to reach even for relatively simple OTC laser devices, such as those for hair removal, and even harder for nonablative fractional devices. Hair Removal Small thermal damage will shut hair growth down for a period of three to four months. Temporary hair growth delay may be a better business model than permanent hair removal. Low energy density photoepilation causes a highly localized, but mild trauma that interrupts the hair cycle. It induces a catagen-like (regression) transition of the hair follicle that eventually leads to temporary loss of hair. This temporary effect consists of strong hair clearance two to three weeks after treatment, which is maintained for approximately 12 weeks, followed by partial or complete re-growth.

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Some of the at-home hair removal devices that have had commercial success are as follows: TRIA (a true diode laser) from TRIA Beauty (previously SpectraGenics) no!no! (a heated shaving blade) from Radiancy Silkn SensEpil (IPL) from Home Skinovations iPulse Personal (a watered-down IPL system) from CyDen SatinLux/Lumea (IPL sold in Europe) from Philips Me (IPL combined with RF) from Syneron

Radiancy -- which became a subsidiary of PhotoMedex in a reverse merger in December 2011 -- has sold over 2.5 million no!no! devices worldwide. Over 260,000 devices have been sold over HSN, despite customer reviews that the device provides little or no efficacy. The no!no! phenomenon is even more intriguing considering its $270+ price tag, which is not inexpensive. Each unit costs about $15, allowing for spending of $1.2 million per week on marketing, primarily infomercials. Me was launched last year in several large European markets and has reached significant market share against many competitors, such as Philips. Me sold over 50,000 units in its first year. In February 2012, P&G signed a five-year deal to market CyDens IPL, iPulse hair removal device globally. P&G undoubtedly will not risk tarnishing its reputation by having too close of an association with a device that will most likely not be a big success. TRIA In January 2010, TRIA was granted permanent hair reduction labeling by the FDA for its athome device. TRIA has filed for an initial public offering, which would make it the first publicly traded company not serving the professional market. TRIA incorporates a diode laser of 800 nm wavelength delivering a fluence of 6-24 J/cm2 (comparable to many professional systems) with relatively long pulse duration of 125-600 ms, 1.0 cm spot size, and a 0.5 Hz repetition rate. Its Diffuse Radiance Technology diffuses the coherent laser photons so that the device is retina-safe for home use. TRIA also has a contact sensor to safeguard against misuse. TRIA employs a skin color sensor which satisfied any concerns that the FDA may have had regarding laser hair removal on darker or suntanned skin types. The FDA does not have skin pigmentation detection requirement; however, the FDA requires that a product meets a sufficient level of safety for OTC sale. Clinical studies, conducted by Ron Wheeland, showed a 61% mean hair count reduction from all sites three weeks after the second treatment and 60% four weeks after the third treatment.

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It is primarily used for the bikini line and underarm where hair is coarser and easier to remove, especially with its stamping, rather than rolling hand piece. TRIA has sold well over 200,000 at-home hair removal devices at an average retail price of about $400. This also includes sales in Japan and Europe. High return rates are an important consideration with high-priced devices, especially when sold via QVC or Nordstrom's. A majority of the returns, however, are in packages that have never been opened, so that the net return rate could be calculated as being substantially below the gross return rate. ZAP Tndas, recently acquired by Syneron, Zap Acne Spot Treatment Device offers a powerful blue light engine below $50. Synerons combined Zap and Clear sales well exceed 100,000 units. Procter & Gamble Procter & Gamble is paying $2 million a year for a non-exclusive license to Palomars technology and patent portfolio for photon-based hair removal for women only. P&G is also contracted to pay Palomar a certain percentage of sales. P&G appears to have concluded that at-home aesthetic devices will become a large, worldwide market. For P&G, the consumable may be nothing more than a special battery from its Duracell division. Ultimately, the winning products may be sold at such a low cost that the consumer can just throw them out when they stop working. What seems like a dream for a laser company with a 55% gross margin, however, is a low return for P&G, whose margins on disposable razor blades must be on the order of 90%. P&G also has to pay close attention to the risks of product cannibalization. PaloVia Skin Renewing Laser In January 2011, Palomar introduced the first OTC non-ablative fractional device cleared by the FDA for home use. The PaloVia Skin Renewing Laser is a handheld diode laser device at 1410 nm for retinal eye safety with beam divergence of 0.15, maximum output energy of 15 mJ, and pulse duration of 10 ms. It is designed to treat with high energy per spot at low coverage with a mechanical scanner. It is initially cleared for the treatment of periorbital wrinkles. Additional clinical studies will show high efficacy for the treatment of wrinkles elsewhere on the face, age spots, and scars.

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The target market is women 45 to 60 with household incomes above $75,000. After age 40, the cumulative effect of lifetime sun exposure manifests in the form of wrinkles and dyschromia. Unlike lotions and creams, which are most effective on the skins outer layer, the PaloVia laser affects the deeper dermis. It rebuilds the supportive structure of collagen and elastin fibers. The protocol includes an active treatment phase (everyday treatments) and a maintenance phase (twice weekly treatments). The device is used for 3-4 minutes daily for the first month. Then in a maintenance phase, it is used for the same duration per treatment twice weekly. The device is used with the PaloVia Pre-Treatment Gel that reduces reflection and back scattering at the skin surface. The gel is priced at $30 per bottle (with over 90% margins), and the average user is expected to buy two per year. Smart sensors also work with the gel to verify skin contact. The device shuts off after 25 pulses for eight hours to prevent overuse. Each treatment requires 6-8 pulses per each side of the face. A clinical trial of the device was conducted by James Leyden. Consumer satisfaction was high to very high. Of 124 subjects, 92% showed a noticeable reduction in wrinkles after one month of daily treatments. There was a high degree of grading uniformity among the evaluators. There were no adverse events. Non-ablative, consumer home device fractional treatments performed several times per week can produce surprisingly good results with only a month of treatments and with essentially no side effects, pain, or downtime. In particular, treatments involving penetration to only 250 micrometers have in some patients produced significant tightening, in addition to improvement in pigmentation, tone, and texture. Although being a great scientific, first generation success, it may be judged to be a commercial failure. For the full year 2011, PaloVia generated about $3.5 million in net revenues on net units of 12,000. Gross revenues were $5.1 million on gross units of 17,000. The return rate of 30% was skewed by QVC, which accounted for 71% of gross unit sales and 61% of total revenues. QVC had a return rate of 38%. Direct distribution was 9% of gross unit sales and 15% of revenues. The remainder was distributed through multiple channels, including brick/mortar commercial stores, and accounted for 20% of gross units and 19% of revenues. The PaloVia.com website had a return rate of 14%. The average wholesale price was $250, with the device retailing at about $495. The cost of goods was about $3.3 million or a manufacturing cost of about $275 per unit. This left a

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gross profit of about $0.3 million. After operating expenses of $3.6 million, the operating loss was $3.3 million. Wrinkle Reduction On January 13, 2011 Syneron received FDA clearance for its Tanda phototherapy system for the treatment of wrinkles in the periorbital region. Its LED array delivers five times greater power than the existing Tanda family of products. This reduces the required number of treatments to two per week. Soltas Fraxel has a development contract with Philips for an at-home skin rejuvenation device using a 1430 nm eye-safe diode. Philips will manufacture, market, and distribute the device and pay royalties to Solta for its technology. Philips device has an expensive investment in sleek-looking packaging and is being sold at retail at 900 in test markets in England and the Netherlands. This price is well above what Sephora believes their customers would pay. The device incorporates Fraxels software for scanning, enabling a continuous stroke versus PaloVias stamping process. The treatment regimen is two times per week for 8-16 weeks. Over 90% of patients saw improvement after 16 weeks. Improvements persisted after 1 month and 3 month follow-ups. Philips will probably ask for more expansive labeling from the FDA compared to Palomar. In its trials, there was statistically significant improvement in overall skin appearance, pigmented lesions, textural irregularities, dyschromias, and fine lines in the face, neck, hands, and arms. Philips has a strong culture, and its standards are even higher than the FDAs. The Philips/Solta device does not use a disposable. The battery, however, needs to be replaced every 9 months. Cynosure is in partnership with Unilever to introduce an at-home skin rejuvenation device late in 2012 or in early 2013. It will not be a fractional device and will be the cornerstone of a family of topical products. Topicals used in conjunction with a device may contribute measurable effects. Device-based wrinkle treatments may take well more than a month to show improvement, so the combination with cosmetics provides an immediate bang for the consumer. It also provides a natural consumable for the device manufacturer. To add another wrinkle, Syneron is in partnership with Procter & Gamble for a co-branded skin rejuvenation product series. Procter & Gamble seems to be focused on low costs as the key to entering the mass consumer market.

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Acne Treatment The main reason people visit a dermatologist in the U.S. is for acne. approximately 80% of the population at some point in their lives. Acne affects

Blue light, at-home treatment devices have been OTC now for several years. Clinical data shows clearance of acne after weeks of usage. CLARO is the first FDA-cleared, over-the-counter IPL device that uses a combination of both heat and light. In November 2010, CLARO was purchased by Solta for approximately $1 million, leaving investors with a loss. CLARO uses the same wavelengths for the treatment of acne as does Soltas photopneumatic professional device, Isolaz (acquired in the purchase of Aesthera). Additionally, no! no! and Zeno offer spot treatment acne devices. In April 2010, TRIA Beautys blue light LED device was cleared by the FDA. Moreover, Tanda Clear from Pharos Life -- acquired by Syneron on December 8, 2010 -- was the first at-home blue light (414 nm) to be cleared by the FDA for both prescriptive and OTC sales to treat mild to moderate acne. This compares to the one zit at a time clearance by the FDA for no!no! Skin, Zeno, and CLARO. Tanda Clear and the TRIA Skin Clarifying System typically treat multiple lesions with a single pulse, due to their much larger spot sizes. Tanda Clear, for example, treats an area of 16.7 cm2 and Tanda Professional Clear an area of 20.5 cm2. Tanda Clear is an LED-based device that is more powerful than most other OTC blue light devices. It produces 20 milliwatts/cm2. With photon recycling, the dose is increased by approximately three times. Skin temperature is increased by 2o C. Tanda Clear is used for three minutes two times a day. That is six minutes to work on one pimple. If you had five pimples that were on five non-adjacent parts of the face, it would take 30 minutes. The TRIA Skin Clarifying System has about the same total power as Tanda. But it has much higher skin irradiance and faster clearance of acne lesions than any other blue-light device, including office-based blue-light systems. The Future is Not What it Used to Be The powerful global consumer marketing companies -- such as Unilever, Procter & Gamble, Este Lauder, LOreal, and Philips, which are loaded with Ph.D.s in chemistry and biology -will either partner with or buy out some of the small, existing companies, which are loaded with Ph.D.s in physics. The winners in the at-home market will need brand names, strong

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distribution, and the ability to reduce price levels to where the devices will eventually reach a consumable price point. Increasingly, it will be a brand-driven industry, where the cost of the product represents only a small proportion of the retail price. The brands will largely be local, rather than global.

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NEUROMODULATORS Neuromodulators rank as the top nonsurgical procedure as the below chart shows.

Treatment volumes in North America are growing at close to a 7% annualized rate, with fees expanding by 5%. Neuromodulators block the transmission of nerve impulses to the muscle by preventing the release of acetylcholine at the neuromuscular junction. By temporarily preventing targeted muscle from contracting, they smooth dynamic wrinkles, which are superimposed upon chronic changes to the collagen and elastin in the dermis. The most popular neuromodulator procedure is injections of botulinum toxin type A (BoNTA). BoNTA is commonly used in the upper face, especially in the forehead and brow. The cleared cosmetic application of BOTOX Cosmetic and Dysport is for the treatment of glabellar lines via the corrugator and procerus muscles (the dreaded 11s). It is a 10-minute procedure that requires no downtime or recovery. Allergans BOTOX Cosmetic is the market share leader, with about 11 million procedures having been performed since clearance in 2002. It is by far the strongest brand name in the aesthetic science space. Yet, perhaps only 9% of consumers who are aware of BOTOX Cosmetic and can afford it have used it. Once physicians grow comfortable with a brand name product, it is hard for me-too entrants to enter the market. Also, BOTOX Cosmetic is sold bundled in with other products, making it even harder to displace. Ipsens Dysport, marketed in the U.S. by Medicis Pharmaceutical, has the second largest market share. It received FDA clearance in 2009.

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Merz Aestheticss XEOMIN received FDA clearance near the end of 2011. XEOMIN does not require refrigeration prior to reconstitution, which is an advantage in distribution, and it does not have additives, which lessens a patients likelihood of developing antibodies. The clinical action of all three cleared neurotoxins is fairly similar, although each has different kinetics associated with it. BOTOX Cosmetic is onabotulinumtoxinA, Dysport is abobotulinumtoxinA, and XEOMIN is incobotulinumtoxinA. Medicis Pharmaceutical has the right to license a transdermally delivered BoNTA from Revance Therapeutics for axillary hyperhidrosis and lateral canthal lines. The Revance peptide may also be used to transport a variety of other large molecules through the skin. A cool approach for treating wrinkles is cryoneuromodulation. Myoscience has developed a cryoprobe that delivers controlled subcutaneous cooling to freeze selective nerve endings and thus facial muscle movements, temporarily eliminating hyperdynamic muscle facial lines. Already cleared for tissue ablation and the treatment of peripheral pain syndromes, this disposable handheld device procedure would provide an alternative treatment for the large group of patients who are averse or resistant to BOTOX or Dysport. Bankim Mehta, the prior CEO of Primaeva, has a company, Serene, doing the RF version of Myoscience.

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DERMAL FILLERS The second most popular procedure is the administration of dermal fillers. They are injected into the skin for filling and contouring in the face. Like neuromodulators, fillers are cost-effective for patients and physicians alike, and offer immediate results. Loss of facial volume is one of the most important changes associated with aging, and it is not addressed by lasers, surgery, or other treatments (except fat transfer). These injectable gels are used for the correction of facial wrinkles and folds, such as nasolabial folds, as well as to create volume, fill in deep depressions, plump lips, and treat lipoatrophy. Restoration of a youthful facial appearance is more related to soft tissue volume than any other factor. They are called dermal fillers because the FDA has cleared them for that application. Most dermal fillers, however, wind up in subcutaneous tissue. Most fillers are absorbed by the body over two to twenty-four months, with Sculptra lasting up to three years. Depending on the location of the injection and the patients metabolism of the material, this might require repeat treatments at somewhat frequent intervals, possibly costing hundreds of dollars for each syringe (usually about 1 cc) used at these touchup/maintenance sessions. The treatments are safe, effective, and only mildly uncomfortable and are, thus, a lunchhour procedure. Facial injections, however, are an art as well as a science and rare complications can occur, such as acute necrosis due to vascular blockage. The patients are almost always repeat users and provide a flow of continued revenue to the physicians office. The increased traffic further provides ample opportunity for office staff exposure and up-sale. Approximately 95% of the U.S. market is controlled by Allergans Juvderm (cleared in June 2006) and Medicis/Q-Meds/Galdermas Restylane/Perlane (cleared in March 2005). Both are hyaluronic acid (HA) fillers, a gel produced endogenously that binds with water to create volume under the skin. HA dermal fillers can be dissolved if problems arise. These HA fillers are, in turn, followed by Particle and Polymer Fillers (PPF). The PPF market is struggling, because the longevity of aesthetic results lasting up to two years is countered by a higher side effects profile. Bioforms Radiesse (cleared by the FDA in December 2006). Its principal component is a synthetic calcium hydroxylapatite (CaHA) as opposed to a HA filler.

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Other PPF fillers include Sanofi Aventiss biostimulatory filler, Sculptra. Its lactic acid produces volumization was cleared for cosmetic use. It is expensive and needs to be reconstituted prior to use. Sunevas Artefill consists of permanent microscopic plastic beads that require skin testing. It has not enjoyed acceptance by the majority of physicians. Fillers differ as to as follows: duration biological and synthetic construct and origin need for allergy testing viscosity and flow characteristics volumization tissue-lifting ability swelling and bruising the ability to erase if the outcome is not desirable or an allergic reaction takes place injection systems whether they contain lidocaine hydrating formulations cost

Different dermal fillers can be used at different times and in different parts of the face. Physician profit is about the same with all products (volume for volume). Thus, the motive for the use of one product over another is based more upon its perceived aesthetic advantage than material cost. The dermal filler market has shown impressive growth. Further growth may be coming with stem cells, Laviv (azfibrocel-T), and other products in the pipeline.

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TOPICALS Physician-Dispensed Topicals Approximately 25% of patients for nonsurgical aesthetic procedures purchase skincare products from physicians. These topicals can enhance results achieved by aesthetic medical devices as follows: acne treatment improvement of photodamage, including fine lines and wrinkles, enlarged pores and hyperpigmentation reduction of erythema scar reduction skin lightening

Further service offerings are available for in-office dispensing, such as cleansers and sun protection. Rejuvenating topicals include the family of substances derived from vitamin A known as retinoids (Retin-A, Avita, Renova, Tazorac, Differin). Retinoids have a long established literature trail of success since the 1970s in terms of efficacy. Other topicals generally do not. Tretinoin as the generic is available at much lower prices than the brand names. It is used to treat comedonal acne, fine wrinkles, and to smooth sun-damaged skin. Continuous oncedaily application is mandatory to achieve maximum results. The interaction of tretinoin with the retinoic acid receptor causes a cascade of events leading to transcriptional regulation of DNA. This cascade leads to new skin cell proliferation, visible as mild remodeling of the skin surface. The mechanism is different from wound healing and collagen synthesis, when fibrocytes are induced to differentiate as a consequence of cellular damage, and subsequently mediate the production of collagen. Retinol and peptides were not listed as ingredients in any cosmetics before 2005. Retinol is now registered in 200 items, while peptides are listed in 1,200 product statements voluntarily submitted to the FDA. Johnson & Johnsons Roc Retinol Correxion anti-wrinkle cream is among products that include retinol. LOreal SAs Skin Replenishing Age Perfect line contains peptides. Retinyl palmitate has been used in cosmetics since the mid-1970s. Este Lauder uses it in Swiss Performing Extract. The skins esterase can transform the palmitate ester to the active alcohol.

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Products that claim beautification are a cosmetic, while those that alter the bodys structure or function are classified as a drug. Products that make both claims are regulated as over-thecounter drugs, such as a hydrating lipstick that also contains a sunscreen. Obagi specializes in the topically applied substance sector. Its most successful product is a treatment regimen of hydroquinone (a skin lightening agent) and tretinoin. In both the U.S. and Canada, however, regulatory agencies are looking at the status of hydroquinone. This risk has made Obagi a less attractive takeover candidate. SkinMedica is the leading private company for physician-dispensed topicals. Its run rate is about $90 million, and it is EBITDA and cash flow positive. SkinMedicas retinol products have been shown to be equal in efficacy to prescription RetinA. Its VANIQA (eflornithine hydrochloride) Cream 13.9%, is the only FDA-cleared prescription product for the reduction of unwanted facial hair in women. SkinMedica has a non-hydroquinone skin lightener in its pipeline that may be as effective as hydroquinone. Two other new non-hydroquinone products for skin lightening are Perle from Neocutis and elure Skin Whitening from Syneron. elures active ingredient is lignin peroxidase (LIP), which catalyzes melanin degradation. Reportedly, it provides results in 1-4 weeks of regular use versus 4-6 weeks with hydroquinone, which also causes significant irritation. Hydroquinone prevents the formation of melanin; whereas, the LIP enzyme breaks down the melanin once it has formed. Lumixyl is a peptide technology that improves the appearance of hyperpigmentation. It is thought to work by inhibiting tyrosinase, the enzyme responsible for the production of melanin in the skin. In vitro studies show that Lumixyl is 5.5 times more effective than hydroquinone at equidosage in the moderation of melanin. Latisse Physicians also prescribe Allergans glaucoma medication, Latisse, for eyelash hypotrichosis. It increases the percentage of hair follicles in the anagen-phase and lengthens the duration of the anagen-phase by stimulating the prostamide receptor. It can more than double eyelash fullness in 16 weeks. gradually return to their previous appearance. If discontinued, eyelashes will

Infrequently, eyelid darkening can occur, which may be reversible. In rare cases, brown iris pigmentation can also darken, which is likely to be permanent.

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Over-the-Counter Topicals Creams containing alpha-hydroxy acids, such as glycolic acid, anti-oxidants, DNA-repair enzymes, and even various growth factors are available over-the-counter. Este Lauder also offers two effective OTC creams: Crme de la Mer, an anti-inflammatory, and Night Repair, a DNA-repair topical. Cosmetics versus Drugs The term cosmeceuticals was coined by Albert Kligman. It is not an official FDA category, as there are only Foods, Drugs, and Cosmetics. Cosmetics are monitored by the Food Division of the FDA. The safety of cosmetics is the responsibility of the sales company, although an undefined battery of tests needs to be performed that would be acceptable as proof of safety to a trained expert. Testing to determine whether ingredients live up to a manufacturers claims is not mandatory. Cosmetic companies are extremely careful not to claim that their products contain active ingredients that are capable of altering the structure and function of skin as prescription products do. This could classify them as drugs in the eyes of the FDA and regulators throughout the world. Nanometer-sized particles are being used in sun tan lotions that are absorbed systemically and pass through the blood-brain barrier. There are no studies regarding the clinical significance of this. As the ability to measure smaller and smaller changes in tissue has emerged, there seems almost to be a dont ask, dont tell policy by regulatory agencies and cosmetic companies alike. At the same time, a more precarious regulatory environment may be developing in Asia and the Pacific Rim, where countries are becoming stricter and are adhering to European regulatory standards.

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THE ENERGY-BASED DEVICES After neuromodulators, fillers, and physician-dispensed topicals, the most popular treatments are the use of non-invasive or minimally invasive energy-based devices as follows: hair removal (the #1 use of energy-based devices for the 21-39 year-old age group) treatment of diffuse redness, birthmarks, hypertrophic scars, red striae, fine blood vessels and other vascular malformations skin resurfacing, full and fractional, ablative and non-ablative, for skin rejuvenation and treatment of wrinkles, pigmented lesions, all types of scars, and striae tattoo removal and treatment of selected pigmented lesions, such as freckles and lentigines (melasma does not respond well to laser treatment, and treatment of nevi is controversial, and certainly should be avoided at home) treatment of active acne with intense blue and infrared light, sometimes accompanied by suction and by infrared lasers such as the Smoothbeam or CoolTouch treatment of actinic keratoses (precancerous epidermal lesions on photo-damaged skin) collagen remodeling including skin tightening and wrinkle reduction (controlled skin heating) cellulite reduction body contouring (getting rid of small pockets of fat) fat reduction

Of the above indications, it is not always clear which are officially cleared, as physicians often use these devices off-label. In fact, skin rejuvenation, skin tightening, and collagen remodeling are not even FDA categories. These indications are descriptive phrases that the manufacturer defines. For example, skin rejuvenation might be defined as the reduction of the appearance of fine wrinkles near the eye or crows feet. Most companies use footnotes to describe the actual FDA-cleared indication. Aesthetic medical devices are powered by a variety of energy sources as follows: Photon energy is the standard of care for skin resurfacing and skin rejuvenation, treating acne scars, hair removal, wrinkle reduction, removing dyschromia, removing vascular lesions, and tattoo removal. It is the preferred energy modality where either selective chromophore targeting (e.g., tattoo removal) or precise, controlled heating (e.g., collagen remodeling) is the aim. Plasma energy is derived from ionizing a flow of inert nitrogen gas and delivering the resulting thermal energy, in a non-contact fashion, to the skin. It has no selective targets (chromophores) and is absorbed by the whole skin architecture. It is nonablative during treatment, but provides deep energy delivery with rapid healing,

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neocollagenesis, and neoelastogenesis for treatment of fine and deep wrinkles, discoloration, acne scars, actinic keratosis, and skin tightening. Radiofrequency is the main energy source advocated for deep skin tightening (although it is cleared by the FDA for wrinkle reduction). It is the quick and lowcost way to bulk heat tissue deeply. Radiofrequency is amenable to all skin types. High-intensity focused ultrasound can achieve focal injury non-invasively at essentially any tissue depth and in virtually any type of tissue. It can target subdermal connective tissue for skin tightening; the superficial musculoaponeurotic layer hypothetically for a mini-facelift; and adipose tissue for body sculpting or fat reduction. Since it can both image and treat, this modality has distinct advantages. Microwave energy is being used to treat primary axillary hyperhidrosis by disabling the sweat glands. It is a quick procedure that requires local anesthesia, involves minimal patient downtime, and has lasting efficacy. Cryolipolysis uses controlled cooling for the selective, noninvasive reduction of abdomens, saddlebag thighs, flanks ("muffin tops"), back fat (bulges near the braline), and love handles. It gets rid of small pockets of fat without the pain, price, or recovery time of liposuction, but also with more gradual and less dramatic volume reductions.

Each of the energy modalities has advantages and disadvantages with regards to depth of penetration; precision of energy deposition; pain; need for surface cooling and anesthesia; downtime for the patient; ability to be color-blind; and side effect risks or complications, such as unwanted tissue injury or pigment change. Other high volume applications (military, communication, transportation, LED lighting) will help to lower costs, which will increase consumer access. When price points fall, demand will again drive investment, and technology will move ahead even more rapidly.

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PHOTON ENERGY In the 1960s, the invention of lasers (light amplification by stimulated emission of radiation) allowed for the generation of coherent light. This was based on the development of the MASER, which produced microwave radiation in a similar fashion to lasers. Originally, the working term was light oscillation by stimulated emission of radiation, but this produced the unacceptable acronym: loser. Light is that which humans can see. With respect to lasers, much of the light is invisible, and therefore is more appropriately referred to as electromagnetic radiation or photon energy. Visible light waves range from around 400 nm (violet) to about 800 nm (red). Below 400 nm is ultraviolet and above 800 nm is infrared. Everyone can see light from the alexandrite laser at 755 nm, and many people can see light from LightSheer at 808 nm. In 1983, a seminal paper was published by Drs. Rox Anderson and John Parrish at the then called Wellman Laboratories at Harvard University. It showed how photon energy could be absorbed selectively by targeted chromophores (e.g., blood for vascular treatment) at specific wavelengths, which caused thermal excitation. The target could be injured preferentially without transferring significant amounts of energy to surrounding tissues as long as the pulse duration of photon exposure was equal to or shorter than the thermal relaxation time of the target. The thermal relaxation time is the time it takes to dissipate approximately 63% of the administered energy to the surrounding, non-target tissue. It is also how quickly the target cools to 37% of the temperature achieved immediately after photon exposure. As photon energy is selectively absorbed, the temperature of these very small chromophore targets (single cells, organelles, tattoo ink, blood vessels) increases abruptly. By choosing the parameters of wavelength, pulse duration, and fluence, the target tissue can be selectively heated and destroyed or damaged, with the surrounding tissue left largely unheated. Collateral damage, such as burns and blisters, to adjacent tissue is avoided in the ideal setting. In addition to destroying or damaging target tissues, selective heating induces an inflammatory response that in turn produces changes in target tissues such as dermal remodeling of scars or photodamaged skin. It also calls the bodys attention to abnormal tissues, such as damaged blood vessels or tattoo particles, hastening their removal. Larger structures require longer pulse durations for sufficient heat absorption and diffusion, and smaller structures require shorter pulse durations. This is analogous to heating a large pot of water on a stove versus a teaspoon of water. More deeply situated targets require the use of wavelengths that are absorbed less by the bulk of the tissue chromophores. Also, larger diameter treatment spots (in the range of 6-25 mm) with such wavelengths enable deeper penetration of photons into the skin by minimizing

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leaking of the scattered photons outside beam diameter. This results in a higher subsurface energy density in human skin. In general, in the visible and near-infrared wavelengths, longer wavelengths penetrate more deeply. A notable exception is the vascular wavelengths (around 600 nm, yellow/orange) that are absorbed by hemoglobin (the red target in the blood vessel), thereby limiting their depth of penetration. This is especially important for treating port wine stain (red/purple) birthmarks. Since scattering spreads at the edge of a field of photon energy, larger spot sizes effectively have a smaller proportion of their photon energy at the edge, penetrating more deeply than small spots, which are more rapidly dissipated by scattering. At the energies and wavelengths used by most in-office lasers, spot size is as important a factor in the depth of penetration of laser energy as is wavelength. The Relative Absorption of Photon Energy An important characteristic of photon energy is the relative absorption, with respect to water, of the chromophores such as melanin and hemoglobin. Skin is about 15% water in the stratum corneum and 70% in the remainder of the epidermis and dermis. There is some water in subcutaneous fat as well. Water absorption is very low in the visible part of the electromagnetic spectrum. Water absorption, however, is very high in the infrared part of the spectrum. Its absorption curve, however, is not monotonic, with peaks at about 970 nm, 1450 nm, 1930 nm, and a gigantic peak at 2940 nm. A less well-known effect is that water absorption is temperature dependent. On the short wavelength side of each of these absorption peaks, the effect of elevated temperature is to increase absorption; whereas, on the top and long wavelength portions of the peak, the absorption decreases with increasing temperature. This effect is significant around 1927 nm and dramatic near 2940 nm. Since treatment always causes elevations in the temperature during the pulse and with accumulated pulses, these effects must be taken into account, particularly with non-ablative and ablative treatment with laser wavelengths. Melanin as a Chromophore Melanin is present in hair, the lower part of the epidermis, and the iris. Hair removal with photon energy is dependent on the presence of melanin. Photon energy is absorbed by the melanin in the hair shaft and hair matrix located in the hair bulb. The heat subsequently generated damages the pigmented matrix/papillary sheath cells

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of the hair bulb; the follicular epithelial stem cells (the bulge), which are not pigmented; and follicle papilla, including blood vessels. Inflammation then ensues, sending a signal to the hair follicles to enter a prolonged resting phase, devoid of a mature anagen (growing) hair shaft. With sufficient fluence, the follicle may be permanently damaged, resulting in permanent hair removal. The anagen (active growth) stage is deemed to be the stage of the hair growth cycle most susceptible to photoepilation (hair removal). The absorption of melanin is high at shorter visible and near-infrared wavelengths and decreases monotonically with wavelength. The primary patent in this area was issued in 1996 to Melanie Grossman, Rox Anderson, and Bill Farinelli at Wellman. Hair removal is a contest between the epidermal and the follicular melanin. Every photon that reaches a hair follicle must first pass through the epidermis. Thus, the ideal patient has fair skin with dark, coarse hair; whereas, treatment for thin, white, gray, or blonde hair is not possible with current techniques. Nonetheless, hair can be permanently, safely, and effectively removed in patients with darker skin. Treatment parameters include longer pulse durations and longer wavelengths, up to about 1 micrometer (e.g., the near-infrared Nd:YAG laser 1064 nm). Epidermal cooling is desirable to wick away the excessive surface heat generated by in-office systems. Cooling can be administered pre-pulse, during pulse, or after pulse. There are three methods of cooling as follows: cryogen spray or dynamic cooling, as invented by Stuart Nelson (liquid spray cools the skin to -50o C) contact cooling as first used by Rox Anderson and Bill Farinelli (e.g., sapphire windows cooled by water on the laser hand piece, which also allows the practitioner to get closer to the target by pushing down on the skin with this tip) forced refrigerated air cooling (e.g., the Zimmer cooling device, basically a small air conditioner with a fan and a narrow tube to focus the flow of air) with a water-based gel increasing the protective function of cold air by a factor of more than ten As Roy Geronemus

Cooling is important for protection even more than for comfort. observes, Vanity is the best anesthetic. Hemoglobin as a Chromophore

Hemoglobin is contained in blood vessels and is not generally free in the tissues. Similarly to melanin, hemoglobin is absorbed at shorter wavelengths, such as 532 and 595 nm, with a high minimum absorption around 700 nm and weak absorption in the mid-infrared. This

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absorption is somewhat similar to melanin, thus making for difficulties in photon use with regard to pulse durations and cooling. Targeting hemoglobin is an effective advance in treating rosacea. The laser is the only treatment option to reduce the facial flushing, blushing sensation, and erythema that occurs after exposure to the sun, spicy foods, or alcohol (or just about any other enjoyable activity). Both linear vessels and diffuse redness respond to the pulsed-dye laser, the KTP laser, or an optimized IPL system. Serial treatments with lasers or IPLs are the only treatments that address the core problems in rosacea or facial redness. Both topical and oral medications may keep the condition at bay, but do not adequately address the blood vessel problem. Rapamycin, as a topical anti-angiogenic inhibitor, is being combined with laser exposure by Dr. Stuart Nelson at the Beckman Laser Institute in an attempt to improve port wine stain therapeutic outcome. Lipids as a Chromophore Lipids, or triglycerides, can be selectively targeted as well, since they are quite different in their properties from surrounding tissues. The depth of fat cells beneath the dermis makes this tissue harder to target, because the energy directed there has to pass through the epidermis and the dermis above. Lipids are primarily located in the subcutaneous fat below the dermis and above muscle and fascia. Lipids are also found in the sebaceous glands in the dermis. Water accounts for about 70% of the cells volume and the matrix of collagen and elastin that forms the dermis. In a subcutaneous fat cell, by contrast, lipids fill more than 85% of the adipocytes volume. The useful peaks of relative absorption of lipids versus water are at 915 nm, 1210 nm, and 1725 nm. Reflection, Scattering, and Absorption Focused photon energy travels only up to one millimeter into tissue as a focused beam, but a large diameter scattered beam can penetrate to several centimeters. What limits penetration is the combination of reflection at the surface of the skin; back scattering of photons out of the skin; forward scattering/diffusion of photons within the skin; and absorption of photons within the skin. The effects of scattering are much more intense at shorter wavelengths and drop off rapidly above 1 micrometer (1000 nm) and beyond. At shorter wavelengths in regions where absorption is low, photons can penetrate deeply into skin, but they are also highly back scattered and the photon paths are tortuous. This causes the beam to defocus or become uncollimated and thus diffuse, much like seeing through thick fog, making it impossible to focus or image the photons.

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At longer wavelengths beyond 1 micrometer, the effects of scattering are low and the photons can be focused deeply. This can only occur for short distances, however, because the intensity drops off due to absorption itself. As much as 75% of the photons can, in fact, back scatter out of the skin where absorption is low and scattering is high. There are many approaches to recycling photons that are back scattered. In the past, optical cavities such as domes have been used effectively. This can increase the efficacy of coupling by factors of up to two. As sharp-edged band-pass filters become more sophisticated and less costly, these films will be employed with well controlled laser wavelengths and well defined wave fronts of photons to trap the photons forward into the tissue. This can increase the efficiency of coupling by factors of two or more. Mie and Rayleigh scattering in skin decrease with longer wavelengths. Shorter wavelengths are absorbed in melanin and oxyhemoglobin and are more strongly scattered; whereas, longer wavelengths (longer than the Nd:YAGs 1.06 micrometers) are dominated by water absorption and can be focused deeper in regions where the scattering is low and the absorption length is of the order of the penetration depth, or less. Wavelengths from 600 nm to 1300 nm, until water absorption takes over, can penetrate more deeply into skin. Lasers typically used for hair removal penetrate well into the dermis. Beyond 1300 nm, however, the absorption of water begins to limit the depth of penetration, even though the scattering is decreased. Above 1300 nm may be melanin-blind, but it is not water-blind. At 2940 nm, the absorption is essentially all due to water and is very high, resulting in minimal penetration and even ablation at higher fluences. In the far-infrared, such as at 10.6 micrometers, most solids are highly absorbing, as well as water. This includes proteins, lipids, and other skin constituents. The overall absorption in tissue, however, is still highest at 2940 nm. At elevated temperatures, the peak absorption shifts slightly to shorter wavelengths between 2700 and 2900 nm. Because skin is mostly water, the characteristics of photon energy transmission through tissue are strongly determined by the decreasing scattering with wavelength and the peaky increasing absorption of water with wavelength. Absorption and scattering are coupled together at the microscopic level. Scattering causes the path-length through tissue to become torturous and effectively longer and, when there is weak absorption present, the effective absorption length is reduced and the

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penetration limited, even for large spots. Thus, it can be misleading to make generalizations in the presence of non-monotonic (peaky) and tightly coupled phenomena that are oppositely varying with wavelength. Any accurate analysis needs to consider the specific values of the absorption, scattering intensity, scattering angles and geometry of the entire structure being illuminated by the wavelengths of the incident photons as well as by the beam characteristics of the photons. Furthermore, the analysis needs to consider the dynamics of temperature and tissue changes on both absorption and scattering, even during a single pulse in treatment. The best wavelength for penetrating deeply into tissue with minimal tissue damage is around 1.1 micrometer. Here water absorption is low, as is melanin and hemoglobin absorption. To achieve tissue effects deeper in the skin, intensive surface cooling allows an increase in the energy density without causing surface damage. Larger spot sizes are used to increase penetration into the skin, but this reduces the maximum attainable fluence by delivering the energy into a larger area. Ablative Resurfacing The gold standard for repairing photodamaged facial skin, including deep rhytides, pigmentation, and skin laxity, is full surface ablative laser surgery. One treatment consistently achieves unparalleled clinical efficacy. Individuals can easily appear to have grown younger by a decade or more. Ablative skin resurfacing is in essence a controlled burn of the skin. It targets water as the chromophore, leading to epidermal and superficial vaporization, ablation, and coagulation up to 300 micrometers in depth. The wound healing response reverses skin damage caused by the suns ultraviolet rays and acne. The most successful skin resurfacing systems, as pioneered by Richard E. Fitzpatrick, use pulsed wavelengths longer than 2 micrometers, such as 2.94 micrometers ( Er:YAG lasers) and the far-infrared 10.6 micrometers (CO2). These wavelengths are essentially colorblind, with the relative absorption of melanin to water being insignificant (although this does not matter when epidermal melanin is removed by such laser applications). The CO2 skin resurfacing laser also has a dramatic skin tightening effect. routinely observed by clinicians after the delivery of laser pulses. This is

The contraction seen during a laser treatment, however, may be due to temporary tissue shrinkage from denaturing of collagen and tissue de-hydration. The ultimate skin tightening that occurs may result more from the fact that open-wounds heal by contraction and there is a substantial degree of collagen reorganization.

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The mechanism of inducing skin tightening is a heat-induced denaturation of the collagen fibers facilitated by disruption of collagen cross-linking hydrogen bonds. This results in an immediate shrinkage of the skin and onset of formation of new tissue. In terms of temperature profile, an instantaneous rise to 63o C results in bond shifts among the cross-links of the triple helix structure without destroying the structure. Once 70o C is reached, however, the connective tissue is coagulated. Thus, the desired heating range of connective tissue for shrinkage of collagen is approximately 60-70o C. These are approximate temperatures, as also time matters, although less then temperature. Remodeling of skin occurs following the tissue injury. It may be enhanced by having a directly-heated tissue layer and a conductively-heated, thermally injured tissue layer remain after ablation. Sciton has developed an Er:YAG laser that is capable of changing the pulse duration which can vary the amount of denatured dermis left behind. This long pulse feature allows for more thermal tissue damage in an adjustable manner versus typical short pulsed Er:YAG lasers. This can emulate the effect of a carbon dioxide laser at the remaining tissue. Cynosure developed a similar technology, which pre-dates Sciton, but was not commercially successful. For years, the fully ablative CO2 laser was the gold standard for skin resurfacing. It caused removal of the epidermis and residual thermal damage within the dermis. Despite achieving excellent, reproducible clinical results when properly performed, it is rarely used today because of its undesirable side effect profile. Technically, it is an unforgiving procedure that demands an experienced, if not gifted, practitioner. In addition, ablative skin resurfacing involves two weeks of post-operative wound healing, including delayed reepithelialization and risks of bacterial, viral, and fungal infection and even scarring, especially when treating off the face. Few patients are willing to endure a lengthy recovery period, followed by months of persistent redness. Also, the patient was sometimes left with unnatural skin sheen and a clear line of demarcation between the treated face and the untreated neck (when not performed to the ultimate skill level necessary). More importantly, there was a risk of delayed, permanent hypopigmentation, which is virtually impossible to correct. Patients of darker skin tones are more likely to develop this delayed hypopigmentation. Non-Ablative Rejuvenation Over the past 15 years, clinical research has focused on less aggressive procedures that can provide nearly similar outcomes with little or no recovery time, minimal risk of infection and

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scarring, ease of use, and no risk of an unnatural sheen to the skin or delayed hypopigmentation. Techniques that avoided the removal of the epidermis, so-called nonablative rejuvenation, were developed as an alternative to ablative resurfacing. Mid-infrared wave lengths (1320 nm, 1440 nm, and 1540 nm) were used for non-ablative wounding of the dermis without ablation of the epidermis. It required cooling systems to avoid epidermal damage, thus making it difficult to achieve the benefits of resurfacing. Treatment intensity was further reduced to treat pain, which also lowered efficacy. Despite providing an improved side effect profile, non-ablative rejuvenation was a largely unsuccessful effort to achieve desirable results. It did not address epidermal pathology, was painful, and had unpredictable and modest clinical results, even after multiple treatments. Its main use now is for the treatment of acne or scar remodeling, often with 1440 nm laser and spray cooling. Fractional Photothermolysis The new treatment paradigm is fractional photothermolysis (FP). FP preserves clinical efficacy, while greatly reducing side effect risks and downtime. It is a revolution that is only seven years old and it is still being optimized. Dieter Manstein and Rox Anderson at Wellman hatched together this idea of, Why cant you take microbeams and use them in the skin? Nobody does this. We should have precise, tiny micrometer-size laser beams, like they use in ophthalmology, to do that. Once they figured it out, they made a prototype at MGH to produce microdots on the skin. Fractional resurfacing is a simple concept, but it required a breakthrough technology. Rox Anderson tracked down the smartest engineer he knew, Len DeBenedictis, who was in semi-retirement. Joining the effort, Len DeBenedictis acquired a fiber laser from IPG Photonics and developed a unique scanner that efficiently delivered microscopic fractional treatments at a speed five times that of conventional scanners. Fractional treatments are now the preferred methods of performing both ablative and nonablative procedures to resurface aging and sun damaged skin and to treat acne scars. They have also been successfully used in the treatment of non-acne atrophic scars, burn scars, skin tightening, striae, melasma, dyschromia, and poikiloderma. In contrast to traditional laser resurfacing, multiple treatments are often required to achieve the desired clinical outcome. By creating an array of micro-thermal zones (MTZs), regions of the epidermis and dermis are thermally denatured or coagulated, while sparing the immediately surrounding tissue. This intervening, healthy tissue provides host to the fibroblasts and stem cells that stimulate a faster therapeutic wound healing response.

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The wounds are typically 70-400 micrometers in diameter, up to 2 mm deep and may cover from a few percent of the skin surface to over 70%. They affect a fractional volume of treated tissue that is highest at the surface and becomes minimal at the deep tapered tips of the lesions. Typically, office systems create hundreds or thousands of MTZs per square centimeter in the skin, facilitating the formation of new collagen, elastin, hyaluronic acid, and other structural components of the skin. Post-treatment side effects are limited to transient erythema, lasting less than 24 hours. The patterns of fractional treatment, however, may vary significantly, depending on the combination of width, depth, and density. Excellent results are being achieved at aggressive parameters of treatment. Moreover, treatment of only a fraction of the total skin can lead to broad epidermal turnover and dermal remodeling everywhere in the cosmetically treated zones. Histology shows heat shock proteins and collagen precursors first concentrated around the microscopically treated zones, but then spreading to a more uniform distribution in all of the skin tissues. The MTZs are surrounded by surviving pools of unharmed tissue. The surrounding intact cells, extracellular matrix, and blood and lymphatic vessels allow for rapid reepithelialization and dermal repair of treated skin. Hence, there is less patient downtime. Traditional non-fractional laser resurfacing can be considered a form of fractional treatment, because the healing is fractional in that it comes from certain areas spaced apart in the epidermis and dermis. Epidermal cells and stem cells that can differentiate into epidermal cells reside in the hair follicular complex and other deeper glands within the dermis (skin appendages). These deeper cells are usually unharmed by the relatively superficial nature of the ablation and are attracted to the ablated surface forming microscopic pools of new epidermis at those sites, which then fully epithelialize the skin. If a sufficient number of these cells are not left unharmed and adequately distributed, a scar results. This may explain why areas outside the face (e.g., at the neck) are more susceptible to scarring with traditional lasers, as the density of skin appendages is reduced. With fractional treatment, additional fractional pools of cells survive at the surface. This decreases the average migration path length of the keratinocytes, resulting in much faster and more certain reepithelialization. This may also explain why fractional lasers are typically well-tolerated at any skin area, including areas with low densities of skin appendages. With fractional laser resurfacing, small beams are delivered by using either a scanning or stamping mode. Scanning technologies apply beams at high speed and in random patterns keeping treatment times very short.

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Multiple passes over the same treatment area with sufficient time in between passes increase treatment density without running into bulk heating problems. Stamping devices deliver a significant number of beams at once along with surface cooling from a sapphire window. Non-ablative fractional treatments may be deepened with a point compression tip delivery array. Palomars Lux 1540 XD lens decreases the scattering and water absorption in the more superficial tissues and allows the photons to reach deeper targets with high aspect ratio. Ablative Fractional Resurfacing Depending upon wavelength, pulse duration, spot size, and energy, fractional treatment can be either ablative or non-ablative. Currently, non-ablative fractional treatments are preferred 20 to 1 over ablative. Ablative treatments use wavelengths strongly absorbed by water, such as 2.94 and 10.6 microns. The stratum corneum is removed with the creation of tiny holes into the dermis surrounded by a shell of coagulated tissue. Ablation quickly removes tissue by vaporization and exploding. Non-ablative treatments leave the stratum corneum intact. Localized zones of heating (tissue coagulation) only occur below the stratum corneum. Ablative fractional resurfacing (AFR) for photorejuvenation and acne scars combines the effects of traditional CO2 and Er:YAG laser ablation with fractional photothermolysis. It produces an array of microscopic columns of controlled, deep dermal tissue volumetric ablation and vaporization. These are surrounded by thermally-induced annular coagulation zones of denatured collagen with interspersed regions of untreated tissue. The subsequent robust dermal remodeling is reflected by the greater degree of tissue contraction and collagen production compared to non-ablative fractional treatment. The induction of heat-shock protein 47, a pro-collagen protein, and persistent collagen remodeling with wound-healing response lasts for a minimum of three months post-treatment. The rapid healing of AFR is not nearly as difficult to manage in the post-operative phase as the older ablative procedure. Complete reepithelialization, with restoration of the basement membrane, is apparent no later than 3-7 days post-treatment. Ablative fractional resurfacing greatly reduces risks of bacterial infection and scarring and the need for complex aftercare. Unlike conventional ablative laser resurfacing, where posttreatment erythema may last several months, cosmetically objectionable erythema subsides within 4-7 days after AFR treatment. It does not have the risks of delayed permanent hypopigmentation or an unnatural shiny surface with decreased adnexal structures. Scarring and other complications, however, can occur after AFR in certain situations, particularly in off-face areas. AFR also still requires

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anesthesia, has a high risk of post-inflammatory hyperpigmentation, and a downtime of 6-10 days. Ablative fractional resurfacing achieves mild to moderate, predictable improvement after a single treatment in skin texture, enlarged pores, skin laxity, wrinkles, color (both red and brown), acne scars, non-acne atrophic scars, and burn scars. It can deliver approximately 50% of the results of old-fashioned CO2 ablation, but without the risk of delayed, permanent hypopigmentation. Ablative fractional has been used off the face to treat the neck/chest and arms/hands. Unlike full ablative resurfacing, AFR can be repeated after a few months with significant additional benefits for those patients looking for major changes and willing to tolerate the additional downtime. Interestingly, the second treatment is often better tolerated. With ablative fractional resurfacing, photons can go deeper, because of the tissue being removed during the treatment. A collimated or focused beam of either 10.6 micrometers (CO2) or 2.94 micrometers (Er:YAG) can drill a small hole with a coagulated wall with depth from 300 micrometers to well over 1.5 mm into tissue, which compares to the old-fashioned laser resurfacing of 10-200 micrometers deep. Holes wider than 500 micrometers, however, can lead to visible micro-scarring if allowed to heal by second intention. Deep AFR treatments can easily remove 8 cc of dermal tissue from the face, which is similar to what is removed by more modest surgical procedures. These ablated zones, however, are largely replaced by new dermal tissue, which is different from surgical procedures. Research is taking place to induce more immediate closure of the ablated sites by primary intent. If this work succeeds, the tightening capability of AFR could be significantly enhanced. Ablative fractional resurfacing can create micro-channels that can be used as a gateway for topical pharmaceuticals, as well as for the delivery of photons that normally cannot penetrate to deeper layers of the skin by delivering a high intensity simultaneous pulse or second laser pulse. Skin stabilization and pain control are keys in maintaining an effective optical gateway for a second pulse of lower intensity photons which may require several seconds of exposure. Non-Ablative Fractional Resurfacing Fractional photothermolysis (FP) has revolutionized non-ablative treatment modalities. It can also safely treat off-face and leaves no line of demarcation. Most consumers prefer non-ablative fractional procedures, even though they require more treatments than ablative procedures. They may not be quite as effective as ablative resurfacing for some indications, but they do not involve oozing, crusting, wound care, and a high post-treatment incidence of inflammation.

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FP has proven effective for photo-aging, acne scars, and surgical and trauma-induced scars. FP is the treatment of choice for poikiloderma, and dyschromia does respond also, but requires a series of treatments, unless it is supplemented with a pigment laser to boost the response. With non-ablative fractional resurfacing, columns of few hundreds of micrometers in diameter of coagulated tissue are created with 1.41 micrometer (fiber or diode laser), 1.44 micrometer (Nd:YAG or diode laser) or 1.54 micrometer (Er-doped:glass and Er-doped:fiber laser) wavelengths. 1.54 micrometer goes deeper than 1.44 micrometer, because of lower absorption. The depth of the columns can be up to 1.5 mm and is effectively limited by the FDA process rather than by the technology itself. With the digital nature of fractional treatments, most patients show some degree of visible improvement, in contrast to some non-ablative non-fractional therapies, which may not reach the threshold for efficacy. This also occurs with minimal risk or downtime. With nonablative fractional resurfacing, you can have your cake and eat it, too! Lasers for Fractional Delivery Soltas Fraxel 135 m spot CO2 has pulse energies of 5-70 mJ (limited by the FDA rather than system capability), ablation depths of 300-1700 m, and coagulation around the ablation column of 50-100 m. Fraxels other medical lasers are fiber lasers from IPG. They have virtually unlimited life in a medical environment and are extremely reliable. This is opposed, for example, to the pulse dye lasers, which are high maintenance devices. The wave lengths on Fraxels fiber lasers are controlled by the ion implanted Bragg gratings, which act as the mirrors. The lasers are precisely on wavelength and absolutely wave length stable. The beam quality is as good as physics will allow for all lasers with power below approximately 100 W. Fraxels lasers, besides having the best brand name, also have a patented continuous motion optical tracking roller system, the Intelligent Optical Tracking System. Each individual spot is precisely delivered in an even distribution. This compares to a stamping hand piece (spots are delivered from the hand piece in a single pulse passing through a lens array) or a scanning stamp pattern (pattern generated by a computer and 2D galvanometer scanner). Soltas business strategy has successfully integrated disposables into its energy-based systems. Fraxel lasers utilize one tip for three-to-four treatments with tips carrying a $400 ASP. The re:store DUAL adds a wavelength of 1927 nm which produces an outcome similar to the Lumenis Active FX treatment, but non-ablatively. This wavelength is being widely adopted for general cosmetic resurfacing, but is also showing great promise for the treatment of precancerous skin lesions (actinic keratoses). The 1927 nm is now available as a stand-alone, lower priced device.

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Many current practitioners, however, prefer to add a fractional hand piece to their current Starlux 500 platform from Palomar. This is at least 50% cheaper to the practitioner versus buying a stand-alone piece of equipment that requires significant disposable costs. In addition, Palomar has launched the Artisan Aesthetic System. It combines a 1540 nm or 1440 nm fractional non-ablative laser and a 2940 nm fractional ablative laser for skin resurfacing, the first approach of this kind to receive clearance by the FDA. The platform also includes a MaxG hand piece for the treatment of pigmented and vascular lesions. Palomar is also developing an array of pyramidal pins designed to use skin compression to deliver more energy to deeper tissue without damaging the epidermis. This technology may be used for more aggressive skin resurfacing, deep wrinkles, cellulite, and fat cells. Multiple tools can be used to treat the skin and can be delivered differentially according to a patients age, skin condition, downtime requirements, and financial constraints. Cuteras Xeo platform similarly allows for multiple add-on applications. DEKAs laser allows control over the depth of ablation as well as the width of coagulation. It has 250W of peak power and a controlled pulse of 0.2-2 ms, and is extremely fast and ergonomically easy to use. Other outstanding systems include the Lumenis Active and Deep FX and the Cutera YSGG (Pearl and Pearl Fractional) 2790 nm laser, which comes in both an ablative non-fractionated and fractionated mode. In the future, a variety of wavelengths -- or even multiple wavelengths -- will target specific areas down the same fiber. Other technologies will leverage themselves on lower cost energy. New devices will do a significantly better job in terms of noticeable efficacy along with minimal collateral damage, downtime, and risks. Practitioners have to be induced to give up their current equipment and learn how to use the new equipment effectivelythat is, make money. Patents for Fractional Technology Solta, Palomar, and MGH have formed the Fractional Technology Open Patent Program (FTOPP). These three entities combined contributed six of their patent families covering fractional laser technology to the FTOPP program for licensing by third parties in the professional field. Currently, there have been no licenses granted, and there is no ongoing litigation, involving any of the FTOPP patents. Both Solta and Palomar retained all their rights to their respective scanning and focusing technologies. Also, both parties retained all their respective rights in the at-home consumer field.

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For the at-home market, Palomar has exclusive rights from MGH to USP 6,997,923, one of the seminal patents in the FTOPP program. Palomar has not said if it will license any of their FTOPP or other patents to any third parties in the at-home field. Solta owns USP 6,632,219, one of its patents in the FTOPP program. 219 predates 923 by more than two years, is currently in reissue proceedings in the United States Patent and Trademark Office, and is expected to reissue in the near future with broad claims covering both at-home and professional and spa fractional devices. Patent battles seem to be shaping up as to whether Solta is infringing Palomars 923 patent and whether Palomar is infringing Soltas claims. In the latter regard, there is arguable ambiguity as to whether Soltas claims cover only unfocused fractional systems; whereas, Palomars is focused. Also at issue may be whether Soltas claims regarding scanned fractional in a substantially simultaneous manner covers Palomars rapid repetition of a single spot. Low-Level Laser Therapy Low-level laser therapy (LLLT) can also manipulate mitochondrial activity without a thermal approach. While the impact of treatment can be significant, the mechanism is still hazy. LLLT may increase respiration in the mitochondria, activating transcription factors and reducing inflammation and oxidative stress. The major pathway appears to be photochemical dissociation of nitric oxide (NO) from a binding site on Cytochrome c Oxidase (CcO), the enzyme responsible for using oxygen. The key wavelengths are the four absorption bands of CcO near 590, 635, 810, and 950 nm. The 810 nm is being sold by the thousands, particularly outside the U.S., for enhancing wound healing. Non-Thermal Interactions In aesthetic medicine, photons are normally thought of in terms of producing controlled heating of targets to create tissue damage and response. Tissue optics and thermal conductivity are important factors in this approach. However, besides thermal, photons can also be used to produce biological, chemical, and mechanical affects in tissue. Photons can be used to affect chemical bonds. Ultra-violet light has had success in this area. With the shorter pulses of the picosecond laser, photons can further be used similar to sound waves to create mechanical stress and damage in the target. Increasing photomechanical damage without major photothermal side effects may have important aesthetic and medical applications in treating tissue. Commercial applications may also occur in the semiconductor, photovoltaic, display technology, and implant industries.

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PLASMA ENERGY Plasma treatment is delivered through a disposable nozzle using pulses of ionized and excited nitrogen gas impinging on the skin. These excited N2 molecules deposit their thermal energy on the surface of the skin. The energy is absorbed deeply into the entire skins architecture leading to thermal damage and deep modification of the skins architecture, but without ablating the skin during treatment. As Eric Bernstein said, plasma creates a wound response without an open wound. With the use of the higher energy plasma treatments, the skin will begin to peel in about 3-4 days, but only after a regenerated, healthy, natural skin architecture beneath this crust replaces the treated areas of the skin with neocollagenesis and neoelastogenesis. With plasma, the new collagen appears in natural matrix form, different from neocollagenesis from aggressive, traditional ablative treatments. Human histological studies have shown that improvement continues for at least one year following treatment. Since it treats the whole skin architecture, it is different from fractional treatments wherein old damaged tissue, up to 80%, may be left untreated. At higher energy plasma treatments, outcomes approach near-to-full CO2 laser treatments. Based on past treatment tracking, hypopigmentation has been minimized and only rare lines of demarcation are seen when treating specific areas, such as peri-oral, peri-orbital and eyelids. Hyperpigmentation can also be minimized when using plasma for Asian and darker skin patients. The leading provider of plasma technology for skin regeneration and rejuvenation, Rhytec, was forced to close in late 2008. This was despite having placed 500 systems worldwide, with disposable usage up 60% from 2007. In November of 2010, the Energist Group acquired the rights and intellectual property of Rhytecs Portrait Plasma technology. A range of protocol options is available that allows the patient and physician to choose an appropriate treatment based on the severity of sun damage, wrinkles, skin condition, and laxity, thus providing the potential for more predictable downtime versus result outcomes, and creating higher patient satisfaction. Portrait Plasma is FDA-cleared for the treatment of wrinkles (on the whole body, including neck, chest, and hands), acne scars, benign skin lesions/actinic keratosis, viral papillomata, and seborrhoeic keratosis. Clinical studies have shown skin tightening.

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RADIOFREQUENCY Radiofrequency (RF) occupies the low end of the electromagnetic spectrum. RF spans a frequency spectrum from about 30 kilohertz to 3 gigahertz, with wavelengths longer than about 10 centimeters. Including microwave energy, the frequency spectrum goes to 300 gigahertz. RF heating is generated in tissue by energy transferred from the electrical field to the charges in the tissue. This transfer of energy occurs through three basic mechanisms of interaction between the electromagnetic field and the charges: orientation of electric dipoles that already exist in the atoms and molecules in the tissue polarization of atoms and molecules to produce dipole moments displacement of conduction electrons and ions in the tissue

Skin heated to about 42o C feels comfortably warm. Around 43o C, there is a tipping point and the heat starts to be perceived as pain. The perception of pain, of course, can be influenced by anxiety, vibration, stretching, or pressure. RF can also be used in combination with other forms of energy. Importantly, it is cheaper to manufacture devices that produce RF versus photon energy. For example, Syneron markets a skin tightening application, ReFirme. It combines bipolar RF (120 J/cm ) and infrared photon energy (700-2,000 nm; 10 W/cm ). Monopolar and Bipolar There are a number of different ways that treatment tips contact the body and deliver energy: monopolar (Soltas Thermage and Alma), bipolar (Syneron), and recent introduction of multipolar application techniques. As a result of a legal agreement, Soltas Thermage ceded its bipolar intellectual property to Syneron and Syneron ceded its monopolar intellectual property to Thermage. Thermages monopolar procedure -- for tightening and contouring skin -- uses a ground pad that is connected to the patients back and also incorporates capacitive coupling to the skin. This allows the 6.78 MHz radiofrequency energy to flow through the active electrode and through an insulating dielectric layer tip, heating the tissue in proximity to it. As a key part of its business strategy, Solta has successfully integrated disposables into its energy-based systems. Thermage CPT utilizes one tip per treatment at a $400 ASP, a sharp drawdown on the physicians margin. Bipolar electrode configurations allow for significant localization of RF energy. The effect is limited to the tissue between the two electrodes placed on the skin surfaces close to each

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other. With monopolar RF, however, this can be achieved by increasing the frequency and shortening the wavelength of the energy. With proper antenna design and phase array principles, it is possible to focus beams in skin volumes smaller than the radiofrequency wavelength. In the frequency region beyond 30 GHz, with sub-centimeter wavelengths, there may eventually be deeply focused mm-sized beams, although scattering needs to be considered. Deformation of the skin can aid in the focusing process. The tissue being targeted can be brought closer to the energy source by using suction or pressure. This is also true with photon sources, where, in addition, hemoglobin is forced out as a competing chromophore, assuming it is not the desired target. Monopolar RF is primarily used for tissue tightening of the face, but has been successfully used on diffuse body parts (abdomen, buttocks, and thighs), providing an increased profit margin for the manufacturer. Earlier cases of complications, such as lipoatrophy, have been minimized by using lower energy settings, but increased passes of the applicator tip. This built in safety measure has allowed many more practitioners to utilize the device and, more importantly, has dramatically increased profits by selling more pulses/shots in the time limited (usually about two hours) for the average disposable tip. This model of low entry cost, but high back-end costs, has proven to be highly profitable for Solta. Ellman markets an RF device for facial wrinkles called Pelleve. It is a hand piece for use with the Surgitron device. The Surgitron Dual RF S5 has two distinct frequencies: 4.0 MHz (monopolar) and 1.7 MHz (bipolar). Newer competitors are marketing multipolar units with similar reported efficacy, but with no disposables. At an entry level of approximately $70,000, this may be competition for Solta. There is a lack of clinical studies, however, with some of these devices. The fact is they are only on the market because of 510(k) clearance. Fractionated RF RF fields tend to concentrate at a point on an electrode. Syneron has two devices that focus it to make fractional wounds surrounded by unaffected tissue. They are a safer alternative for ethnic skin. Its original eMatrix was intended for reduction in wrinkles, acne, and scars via a process coined as subablative rejuvenation. With this radiofrequency tip, the energy is delivered in a pyramid shape such that the energy is concentrated in the dermis with minimal epidermal disruption.

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In addition, with the eMatrix system, the lesion temperature and impedance is measured in real-time so as to provide the practitioner with feedback on the treatment. The manufacturer also benefits from a high margin, single use disposable tip. The newer e2 tip or epidermal tip has a shallow target so that the pigment in the surface of the skin is more the target. Using two tips, the practitioner can get collagen remodeling and superficial pigment smoothing. Synerons ePrime, acquired from Primaeva, uses a micro-needle electrode array. The device causes precise dermal injuries that arouse an anabolic wound healing response which stimulates the growth of collagen and elastin. It is used to treat skin tone, laxity, and volume. A matrix of paired 32 gauge electrodes is inserted into the dermis causing tissue coagulation between oppositely polarized needles and at a predefined depth. Since each wound is surrounded by untreated tissue, healing is relatively rapid, and the risk of side effects is low. The treatment tip is disposable. The ePrime system monitors the temperature of each needle with real time feedback. This allows for adequate delivery of energy to raise dermal temperatures from 68o C to 72o C for about four seconds. This smart needle array engenders a much greater predictability of response as opposed to the traditional bulk heating approaches for skin tightening. After 45 to 60 minutes to treat the entire face, the patient is left with little poke marks and mild edema and erythema which may last for a few days, but usually return to normal activities within 24 hours. The concept of puncturing the skin and creating an epidermal wound, along with slightly increased downtime and pain, may limit the technologys widespread acceptance versus other similarly available devices. Radiofrequency-based products will take better advantage of the high performance and low cost components and subsystems that are available outside of therapeutic medicine. RF and microwave radiation is deployed extensively for radar, communications, food processing, industrial materials processing, waste processing, chemical analysis, plasma processing, nuclear magnetic resonance and MRI. New products will allow RF energy above 20 MHz to be coupled into and self-propagated through tissue in a manner similar to photon energy. Just as photon energy can be tuned to chromophores in skin, RF frequencies will be tuned to conformational resonances of protein molecules. This will include folds, twists, and compressions of polypeptide chains, such as collagen. A greater breadth of more sophisticated products will be developed in terms of delivery of high power, controlled depth of penetration, specificity with regard to different tissues, ability to focus deeply into tissue, and extremely low cost. RFs non-thermal bioelectric and electrochemical interaction with tissue will become important in treating infection and cancer.

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HIGH-INTENSITY FOCUSED ULTRASOUND Ultrasound is a form of mechanical wave sound energy. It is the only available radiant energy source that propagates as a coherent wave beyond a few millimeters into tissue. Also, as with RF, ultrasound is chromophore-independent and, therefore, color-blind. Ultrasound is not electromagnetic as are photon and RF energies. Its propagation results from periodic compression (overpressure) and rarefaction or decompression (negative pressure) of the medium. Propagation properties are determined by the elastic characteristics, absorption, and density of the medium. Unlike electromagnetic energies, ultrasound cannot self-propagate through vacuum or efficiently through air, but does have in common a frequency-dependent attenuation. Ultrasound commonly refers to the use of the energy for imaging; whereas, high-intensity ultrasound and particularly high-intensity focused ultrasound (HIFU) refers to the use of energy for therapy. HIFU waves induce an oscillation in tissue structures at a period set by the frequency of excitation. This produces tissue damage via either a thermal or mechanical process. In the thermal process, the vibration in the tissue structure creates friction, which generates an abrupt rise in temperature within the focal volume. Most of the absorbed acoustic energy ends up as heat. In the mechanical process, HIFU causes non-thermal effects, such as cavitation, radiation force, and acoustic streaming. Cavitation is the formation and collapse of microscopic vacuum bubbles due to sudden pressure differentials within the beam. Mechanical damage is also caused by streaming (fluid motion induced by the ultrasound field) and shear forces (generated from high pressure levels within the heated tissue). Especially at MHz frequencies, a HIFU beam can be focused at a known depth within the skin tissue. The spatial characteristics of the focal region are determined primarily by the curvature of the ultrasound wave front, the operating frequency, transducer size, and the tissue it is propagating through. The propagation speed of sound in tissue, like water, is about 1540 meters per second or about 200,000 times slower than for photon energy. The range of operating frequencies for therapeutic applications to date is 0.2-10 MHz, thereby resulting in wavelengths of 7.7-0.15 mm, respectively. At 7.5 MHz, the wavelength in tissue is only 0.2 mm. A HIFU beam can, therefore, be focused to achieve a selective tissue effect zone of approximately 1 mm3 (less than the size of a grain of rice).

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The HIFU fields can be transcutaneously directed into visceral soft tissue to produce coagulative necrosis resulting primarily from thermal mechanisms. Most of the work in this area has been to develop HIFU as a surgical tool to treat tumors in the liver, breast, and uterus. Selective heating within the tight focal zone can be achieved because of the low scattering of HIFU waves in soft tissue. Scattering within a HIFU beam is due to tissue non-uniformity in terms of differences in speed of sound and density in different parts of tissue. Theoretically, HIFU can be used to target the sebaceous and eccrine glands. HIFU can penetrate substantially deeper with lower power than photon energy. Depth of penetration of HIFU energy is frequency-dependent: the lower the frequency, the greater the depth of penetration. For example, the Ulthera system operates at frequencies of 4-10 MHz for the therapy modality. More frequencies will be employed in the future to reach a variety of additional depths of treatment. The imaging modality operates at much higher frequencies. Design of HIFU transducers for therapy requires the consideration of high power output and predictable electro-mechanical efficiency. The transducers for therapy are well in the frequency regime of diagnostic ultrasound transducer designs and are, hence, technically feasible. Transducers are under development to operate at multiple frequencies to enable treatments at virtually any depth. With HIFU source frequencies >1 MHz and source diameters on the order of 25 mm, focused ultrasound can produce controlled tissue thermal coagulation (focal tissue temperature of 6080o C). This is similar to photon-produced, controlled thermal injury and is the mechanism of action for Ulthera (for skin lifting and tightening). The LipoSonix (Solta) system used for non-invasive lipolysis has a mechanism of action which is also mainly confined to thermal heating/coagulation. Cavitation Besides producing coagulative necrosis by thermal mechanisms, ultrasound-tissue interaction can result from microcavitation, the growth and collapse of micro-bubbles. This results from the alternating compression and rarefaction changes within the beam. Importantly, this mechanism of action can cause damage of tissue cells and fibers without the associated pain of thermal damage. At low frequency (<1 MHz) and sufficiently high pressure amplitudes, ultrasound can produce controlled tissue injury due to cavitation. Further, high negative pressure levels may also induce tissue rupture. The minimally invasive VASER Ultrasonic Lipo System uses low frequency ultrasound (37 kHz) to dislodge and create a suspension of fat cells within a targeted area, while preserving surrounding tissue. Fat deposits are then aspirated using cannulas.

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Through the choice of operating frequency and energy, the VASER Ultrasonic Lipo System preserves the viability of the aspirated fat, allowing it to be used for autologus fat transfer and further processing into adipose-derived stem cells. The system received FDA clearance in September 2002 for the fragmentation, emulsification, and aspiration of subcutaneous fatty tissue for aesthetic body contouring. Further, creation of high negative pressure levels (not cavitation) may also induce tissue rupture in a non-thermal manner. Of note, currently available RF and lasers/IPLs cannot create such non-thermal effects. But the use of RF prior to ultrasound is thought to increase microcavitation. Ultrafast (sub-nanosecond) laser pulses, however, have been demonstrated to be focusable through the epidermis into the dermis using high numerical aperture optics. This creates nonthermal dielectric breakdown and tissue disruption without damaging the epidermis. No therapeutic aesthetic medical systems have yet been deployed with ultrafast technology. A Fractional Approach HIFU can operate similarly to other fractional approaches in that well-defined, multiple thermal zones of injury are created which are surrounded by healthy tissue. By using a highly directive source geometry with the source energy settings increased significantly, HIFU energy can be focused spatially in a tightly confined region. Other than ionizing x-rays and gamma-rays, HIFU is the only energy source that can create lesions deep in the dermis and fat, while sparing the epidermis, upper dermis, and underlying tissues and organs without the need for concurrent surface cooling. This is because the fluences in those non-targeted areas are well below the threshold for causing significant tissue heating or coagulation. Additionally, HIFU can create thermal zones in a variable 3-D geometry. Unlike pulsed photons -- which need significant surface cooling in order to accomplish tissue coagulation at depth -- ultrasound can easily control the shape and volume of each lesion in a tightly focused beam at various depths. Ulthera has a focal zone on the order of 1 mm3 and UltraShape, 100 mm3. Existing Ultrasound Systems Ultheras treatment consists of placing a grid of micro-coagulative lesions on the order of 1 mm3 at depths in skin of 1-6 mm, source energy levels of 0.1 to 3 J, and spacing on the order of 1.5 mm, from 4 to 10 MHz dual-mode image/treat transducers. Clinical applications include non-invasive face-lifts, brow-lifts, and neck-lifts achieved through fractionated treatment of the superficial muscular aponeurotic system (SMAS) and subcutaneous tissue. LipoSonix and UltraShape deliver ultrasound in a completely different manner to emulsify fat. LipoSonix focuses high intensity ultrasound at precise depths within adipose tissue

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(approximately 13 mm on an adjustable plane). By translating the pulsing transducer over the skin surface, it provides a fractional pattern of many mini-spots in that layer. The dense pattern of mini-spots is formed with a fluence of around 100 J/cm2. UltraShape targets tissue at depths of 10-30 mm on a fixed plane with fluence on the order of 100 J/cm2. The location of the thermal damage is defined by the positioning of the focal plane of the transducer and is not selective to fat. Instead, the damage is achieved where fat is supposed to be at the focal plane of the transducer. The damaged adipocytes and released triglycerides are engulfed and digested by macrophages. The lipid-laden microphages are passed on to the lymphatic system, transported to the blood via the thoracic duct, and then processed by the liver. Damaged tissues in the treated areas are resorbed over several months. Pain, however, remains an important hurdle. UltraShape claims that it uses this mechanical rather than thermal mechanism of action to achieve lipolysis. Because of the appearance of blisters and other wounds that appear to be thermal, however, this assertion has been challenged. The VASER Shape MC1 was cleared by the FDA in May 2010 and is marketed in the U.S. by Sound Surgical. It uses two non-focused transducers to produce overlapping ultrasound beams. In the overlap region, which extends from 1-5 cm deep, the adipose tissue is affected by both a thermal mechanism and a so-called radiation force which causes a micromassage to change the permeability of the fat cell membrane. This combination temporarily opens pores in the fat cells causing leakage of liquid fat for removal by the lymphatic system. Celleration markets a MIST Therapy treatment for skin rejuvenation. It utilizes low frequency ultrasound delivered through a saline mist. The company claims that the treatment accelerates healing by reducing inflammation, increasing collagen deposition, and reducing bacteria. Image and Treat Ultrasound-based imaging systems for clinical diagnosis have been used safely and routinely for several decades. Almost ten years ago, Michael Slayton and Peter Barthe at Guided Therapy Systems invented the magic bullet: a transducer that can both image and treat a small spot. Ulthera has licensed this imaging-and-treating transducer for a number of aesthetic applications. Ultheras transducer is unique in its ability to combine imaging and treating of tissues in real time. Just as other clinical disciplines endeavor to see before treating, albeit not in real time, Ultheras use of ultrasound brings such enabling technology to aesthetic medicine in real time.

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Ultheras device has two functioning modes: imaging (which is used to image the region of interest before the therapeutic ultrasound exposures) treatment (which is the mode that delivers a series of higher-energy ultrasound exposures)

A series of selective coagulated zones can be produced along a straight line at a given depth within the tissue (25 mm line of discrete lesions 0.5-5.0 mm apart). For each series of exposures the following source conditions can be varied: power output (W) exposure time (ms) length of exposure line (mm) distance between exposure zones (mm) time delay after each exposure (ms)

The hand piece remains the same, while a variety of transducers are used that target specific depths and use specific frequencies. Imaging provides the ability to select a specific depth for targeting at the time of the procedure, as well as the ability to avoid any injury to the contiguous tissue as the depth for treatment is selected. In 2009, Ulthera received FDA clearance for non-surgical lifting of tissue (the eyebrow). Ulthera can spur collagen growth deep under the dermis without leaving a scar. Treatment procedures are still being optimized. Ultheras entry system set-up costs approximately $100,000. An adopting practice can reach positive cash flow by performing just one Ultherapy procedure per day for two months, depending on procedural costs and practice demographics. Adequate pain management has been difficult to achieve in about one-half of patients at therapeutic energy levels. Combinations of anxiolytics, narcotics, anesthetics, and verbal support are often necessary. Peer-reviewed studies have documented an average eyebrow lift of 2 mm with an upper face treatment. The company has further submitted a new 510(k) to the FDA seeking a specific indication for improvement in the lower face and neck. Reports from Asia and Europe, where Ultherapy has been practiced for two and one-half years, indicate a one- to two-year duration of results. The companys most recent treatment guidelines are producing immediate results post-treatment with more improvement occurring during the succeeding 3-4 months as new collagen forms. Sound Surgicals TouchView Ultrasound transducer has recently been cleared as an accessory to its Terason 2000+ Laptop Ultrasound Imaging System. The addition of the TouchView

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allows high quality imaging and portability, as well as an accurate and reproducible measurement of fat tissue depth. Pain, Sequelae, and Safety HIFU often does not require surface cooling or anesthesia, because the entire skin surface is not heated and the tissue effect is at depth. Heating in small spots in deep structures that are not well innervated may not be painful. Interaction of the HIFU beam with a nerve or bone, however, can result in severe pain and other sequelae. Moreover, when HIFU hits a bone, it bounces back through tissue as unfocused energy. This can have a detrimental effect within existing scars or over bony areas. Similar to other energy modalities, increased tissue absorption results following coagulation of tissue with HIFU. The region of coagulation progresses proximally toward the ultrasound source, with little energy straying distal to the focus. This can have a detrimental effect on existing scars. Since HIFU energy is capable of achieving tissue effects remotely from the energy source, significant safety criteria need to be satisfied before an application is cleared for human use. Limiting the amount of user-selectable ultrasound energy to a few millimeters from the skin surface with small, discrete, coagulation zones on the order of 1 mm3 can enhance procedural safety. Limitations HIFU has some further inherent limitations. For example, to limit the tissue damage to a small focal volume, high frequencies have to be used. Using high frequencies, however, limits the depth of penetration, because attenuation increases with frequency. Additionally, since the focal volume is three-dimensional, to limit the damage to a thin layer of tissue, the treatment volume is small in lateral extent. This makes it necessary to generate many focal spots to achieve an effect. Faster positioning and scanning systems are necessary to facilitate the treatment within reasonable time. This may be addressed by the use of cylindrical focusing and phased arrays. Cylindrical focusing, however, does not provide the same advantage with regard to protecting the more superficial tissues. Phased arrays only approximate the effects of physically moving the transducer and cost, size, and complexity can be greatly increased in such multi-channel systems. Also, ultrasound cannot make fractional lesions as quickly or as densely as photons. Increases in speed, however, can come from using multiple treatment lines sequentially.

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Current HIFU devices used for coagulating substantial volumes of tissue are already slow, and procedure times become even longer when employed with imaging. If the treatment speed and density are increased, the cooling requirements will increase proportionally, becoming equivalent to photon and RF energies at the same speed and coverage. Although the ability to image-and-treat in the same session is advantageous, once the depths of the target are established, there may be a general tendency to use average depths for targeting rather than imaging first and then adjusting depth for targeting. Imaging-andtreating may be impractical for the vast majority of treating physicians, who do not want to spend the extra time per procedure. Besides, the interpretation of ultrasound images requires some skills and is subject to a learning process. Furthermore, HIFU is only spatially selective versus photon energys selective chromophorebased absorption. Depending on the application, the nature of ultrasound, not relying on a chromophore, can prove to be an advantage or disadvantage. The deeper the target, the larger the applicator becomes in order to focus on the same small area. For example, LipoSonix at 2 MHz has about a 4 cm diameter transducer. For treatments at greater depth, scattering and coupling problems to the skin limit attaining a small size of the focal spot. Despite these technological limitations, or rather characteristics, ultrasound-based therapy is a highly promising modality poised for growth. Ultrasound is the only practical radiant energy source that propagates as a wave beyond a few millimeters into tissue.

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MICROWAVE ENERGY Miramar Labs recently received FDA clearance for its miraDry System, which uses microwave energy to treat primary axillary hyperhidrosis by disabling the sweat glands. Requiring local anesthesia, it is a quick, in-office procedure that is non-invasive and involves minimal to no patient downtime. Two treatments spaced three months apart are required. A recent clinical study showed 90% efficacy and 90% patient satisfaction. The safety of the procedure, however, has not been fully established. There has been one report of damage to an important hand nerve that traverses the axilla region in a patient with low body fat. Venture capitalists have invested $30 million in the company. A like amount of capital may be necessary to launch the business. Yet, RF energy may provide an even cheaper approach. RF energy near 1 MHz has a natural increase in impedance at the dermal/subcutaneous fat junction. The sweat glands reside deep in the dermis and in the superficial fat, and may be effectively targeted with an RF probe. A HIFU device can also be set to an equidistant depth level of 3-4 millimeters to disable the eccrine glands. These actually reside below, not above, the dermal/subcutaneous junction. Coming down the pike may be microwave (and terahertz) devices that will have revolutionary deep focusing capabilities and flexible attributes. How expensive they will be is an open question.

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CRYOLIPOLYSIS Cryolipolysis is a novel, anti-heat way to contour the body and remove non-invasively small grabbable areas of fat resistant to diet and exercise: the flanks (love handles), muffin tops, back fat, and abdominal and inner thigh bulges. This non-invasive fat reduction approach was invented by Dieter Manstein and Rox Anderson at Wellman. The primary mechanism of fat cell death is cold-induced apoptosis (programmed cell death), not necrosis. The selectivity is achieved by a selective biological response rather than selective cooling of the fat. The damaged fat cells die over two-to-three months post-treatment. remove the dead fat cells and their lipid contents. Inflammatory cells

As the dead fat is removed, the bulges shrink and flatten over a period of one-to-four months. Once the fat is removed from an area, it does not return soon, if ever, just as with liposuction. ZELTIQs cooling device, CoolSculpting, was cleared by the FDA in September 2010 for non-invasive fat layer reduction. ZELTIQ demonstrated to the FDA that triglyceride levels do not rise significantly following its procedure. Suction is used to draw a skin fold into a cup-shaped applicator. It rapidly cools the area to near-freezing levels, while avoiding conducting too much heat away from deeper structures. Its single treatment uses no needles, incisions, or pain medication and requires no recovery time. One treatment consistently removes a sub-dermal fat layer of about 0.5 to 1.0 cm at the center of the treated bulge. The important clinical effect, however, is the improved image of the contouring rather than the amount of fat that is removed. The consumer satisfaction scores for ZELTIQ are higher than for almost all other procedures rated on www.RealSelf.com, the Yelp for cosmetic procedures. Patients can expect an approximate 25-30% improvement in treated areas after two applications of the technology. Post-procedural dysasthesia has been reported to last as long as a month after treatment, but has not been permanent. The procedure has good clinical outcomes, is easily repeatable, and has profitable economics for the physician office. The procedure requires only minutes of the clinicians time for a 60minute treatment. For the physician, capital costs are returned in many cases within six months. It is a profitable therapy for the doctor, with a 70% net margin. At the same time, ZELTIQs margins for systems are over 70% and for procedures over 90%.

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Some doctors, however, feel that it takes multiple treatments and cycles and that the number of appropriate candidates is small. Also, some feel that the costs are higher and the time it takes is longer than generally described. It is also difficult to get patients to pay $1,200-$1,500 per area, and in reality many procedures go for about $750-$1,000. ZELTIQ charges the doctor $150 per treatment for a small area and $275 per treatment for a large area. ZELTIQ is giving doctors about 20-50% of their marketing dollars back, depending on how many cards that the doctors purchase. This means the more procedures and the more marketing the doctor does, the more money he gets back. A theoretical risk is physicians bypassing ZELTIQs disposable cards. The court ruling with Apple and Jailbreaking phones may apply to CoolSculpting. The disposable cards can be washed through an acid bath and the circuit-run to figure out how to recreate it, refill, or bypass it. Another option is to jump the board on the unit itself to bypass the card check. The fundamental principles involved with the use of cold -- and perhaps the alternating use of cold and heat -- may spawn other aesthetic, as well as therapeutic applications. The engineering of effective applications, however, is a challenge.

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MESOTHERAPY There is a lot of bogus stuff and poor research in the mesotherapy world. There are strong convictions about anything that allows trans-epidermal delivery. The agent being injected is critical. But that does not mean there is not a diamond lying in there to be unearthed and polished. Differentiation should be made between the injection of who-knows-what and the actual pharmaceutical approaches of KYTHERA and Lithera. KYTHERA Biopharmaceuticals is in clinical trials with ATX-101 an injectable adipolytic agent for the reduction of submental fat. ATX-101 is a formulation of synthetic sodium deoxycholate, a well-characterized endogenous compound involved in the natural breakdown of dietary fat. KYTHERA has entered into a licensing and development agreement with Bayer HealthCare in this regard. KYTHERA is to receive $43 million up front and may receive $330 million more. KYTHERA is also developing ATX-104, a light-activated facial contouring agent. Lithera is developing an injectable, LIPO-102, also for localized fat reduction. It uses salmeterol xinafoate and fluticasone propionate, previously cleared for other indications.

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FAT REDUCTION AND BODY CONTOURING WHO estimates that approximately 46% of the adult population in the U.S. is obese. This compares to 25% in the UK, 19% in Brazil, and 4% in China. Lipoplasty and abdominoplasty together represent the most frequent aesthetic surgical procedures in the U.S., as the below chart shows. They represent a combined U.S. market of over $1.6 billion.

These procedures abruptly reduce subcutaneous fat mass. Current techniques make it possible to remove 10 liters of fat. Laser-Assisted Lipolysis In recent years, laser-assisted lipolysis devices have been marketed to assist with lipoplasty and abdominoplasty. These devices liquefy fat to facilitate removal, tighten the overlying skin, reduce blood loss intra-operatively, and lessen bruising and post-operative pain. Total procedure time and expense, however, is increased, as well as risks of skin injury/burns and fiber breakage inside the skin. Most of the wavelengths target water and are at 975 nm, 1064 nm, 1320 nm, 1370 nm, 1440 nm, and 1470 nm. Palomar argues that 924 nm, 1210 nm, and 1715 nm are the best wavelengths for skin safety to prevent skin burns from the inside, because the fat absorption of these wavelengths is about two times higher than for water. Of these wavelengths, Palomar argues that 924 nm is optimum to satisfy both safety and efficacy. The 924 nm has the lowest coefficient of absorption for fat tissue (about 0.13 cm-1), which allows uniform heating of a large volume of fat tissue in the laser tunnel (about 1 cm in diameter).

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924 nm is a fat-selective wavelength patented for use by Palomars SlimLipo. Palomar claims that the 924 nm wavelength produces a creamier aspirate that is easier to remove. A graph regarding absorption in fatty tissue and the dermis follows:

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dermis * human fatty adipose tissue *

1320nm

1440nm

Coefficients of absorption (cm-1)

10
920nm 1064nm 975nm

1470nm

0.1

1370nm

0.01 850 900 950 1000 1050 1100 1150 1200 1250 1300 1350 1400 1450 1500

Wavelengths (nm)
*: Estimated absorption based on main chromophores in tissue: Dermis contains approximately 70% water; Human fatty adipose tissue contains approximately 75% lipid and 20% water. (Duck 1990, "Physical properties of tissue", pp.320-328 London: Academic Press).

Consumer excitement started with Bruce Katzs endorsement in Star Magazine and People and in an interview on Good Morning America. This gave birth to Cynosures SmartLipo as an important brand name. SmartLipo is primarily used as a marketing lead-in to conventional suction-assisted liposuction rather than as a stand-alone modality. This compares to 80-90% of Palomars customers using its SlimLipo only for lipolysis procedures. Cynosures SmartLipo with its Therma Guide for temperature control is estimated to control 85% of the U.S. dermatology market. 60% of Palomars SlimLipo owners are plastic surgeons. The HIFU-assisted VASER device is marketed primarily to plastic surgeons.

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SmartLipo languished in Europe, but then had a big run in the U.S. There are lots of fat and motivated doctors here. Non-core physicians make up the biggest segment of laser lipolysis users, followed by plastic surgeons and then dermatologists. Perhaps only 140 dermatologists perform liposuction. Other Forms of Fat Reduction Non-invasive modalities are being developed to target subcutaneous fat. Photon energy, alone or in combination with other energy sources, has been employed to remove fat, with limited success. Erchonias low power laser, Zerona, received clearance from the FDA in September 2010 for fat reduction. It claims to enhance the permeability of the fat cells through which the triglycerides leak out into the lymphatic system. This is in much the same way the gut delivers fat from a meal through the lymphatic system and to the venous system. This approach does not destroy the fat cells or result in inflammation. The Zerona device employs five moving lasers at a wavelength of 635 nm, each emitting at 17 mW. This compares to a red laser pointer, which typically emits in the energy range between approximately 1-5 mW. The low laser power does not allow for any warming of the tissue. The effectiveness of this approach is highly questionable. To date, no side-by-side, peerreviewed studies have been published. Cuteras truSculpt system provides non-invasive radio frequency treatment for body sculpting. It enables large volumetric deep tissue treatment with minimal discomfort and no downtime. The system features real-time temperature monitoring, and the ability to achieve predictable therapeutic temperatures in subcutaneous fat while maintaining comfortable levels in the skin. High-Intensity Focused Ultrasound Other non-invasive, high-intensity focused ultrasound (HIFU) procedures are focused on fat reduction in the areas of the abdomen and flanks. This approach disrupts subcutaneous adipose tissue through both mechanical shearing forces and temperature increases and ultimately results in the phagocytosis of the adipocytes. Having paid full price for Liposonix in a bidding war with Allergan, Medicis recently sold Liposonix to Solta. Liposonix was cleared by the FDA in September 2011 for body contouring, and its Generation II system was cleared in October 2011 for non-invasive waist circumference reduction. Many doctors in the European Union, Canada and Japan that used the first version of the device were not impressed.

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Clinical studies for Liposonix at 59J/cm2 have shown reduction of waist circumference after a single treatment of approximately 2.6 cm (one inch) within an 8-12 week time frame. Adverse events include procedural pain, post-procedural pain, bruising, and swelling. These are mostly mild, short-lived, and resolve without incident. Liposonix has good marketing with 1 inch, 1 hour, and 1 treatment. It has a disposable for $5,000, which is good for 12 treatments or about $420 per treatment. The doctor will charge $3,000. If the second generation of Liposonix pans out as being at least as consistent as CoolSculpting, then ZELTIQ will have competition. No provider wants two boxes at $100K each, especially if a sales rep is telling them a hundred reasons why they only need the onethat their company sells. Ultrashape products utilized focused ultrasound waves to destroy selectively and noninvasively fat cells for body sculpting. It destroys the cells via a mechanical non-thermal process. After more than $50 million was invested in the development in this technology, Syneron bought it in February 2012 for $12 million. Its newest product, the Contour V3, features a Vertical Dynamic Focus which allows fat cells to be destroyed at various depths of the fat tissue, thus being able to treat patients of both normal and overweight size. The system is approved in Europe and FDA clearance is expected in approximately 18 months. Treatment times range from 20 to 30 minutes, results are visible within 7 to 10 days, and the procedure is pain free. Patients experience on average a circumference reduction of 4 centimeters after three treatments, although some feel that circumferential reduction is a relatively weak endpoint. It is hard to say what role will be played by the venus RF technology. Also, there is the FDAcleared Bella Contour body contouring system based upon ultrasound, electrical current fields, and lymphatic drainage. Body Shaping Versus Obesity Devices like ZELTIQs are ideal for a low BMI patient with a few lumps and bumps. They are best suited for local fat removal that is resistant to exercise, such as love handles. The effect is much less visible on patients with higher body fat. Liposuction, where large volumes of fat can be removed, can lead to weight loss. There is conflicting evidence, however, as to whether it improves the metabolic liabilities of obesity. That may be because the weight loss is modest, and it may be because it does not reduce visceral fat, which is thought to be more closely correlated to metabolic disorders.

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Obesity is best addressed through life-style changes or with gastric banding or bypass and sleeve gastrectomy, which affect absorption or limit ingestion of food. Weight loss drugs have a poor track record. Treatment of obesity will not occur with the application of devices that reach only a small part of the subcutaneous fat and none of the peritoneal fat or other internally deposited fat. There is some speculation that cold adaptation, which may increase the presence of brown fat and is metabolically active, may be another approach to weight loss. The increased presence of heat-producing brown fat is correlated with lean body composition. Ultrashape, now owned by Syneron, is the only non-thermal multi-layer fat layer destructive technology which can de-bulk and sculpt any area of the body. This technology is targeted at core physicians and it is complementary to the Vela lines tightening mode of action.

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CELLULITE Cellulite is characterized by topographic skin dimpling or an orange peel texture. It is apparent in 90% of post-pubertal females and in androgen-deficit males. It is not associated with weight or health. Cellulite represents a gender-related difference in the structure of subcutaneous fat lobules and the uneven thickness and architecture of the connective tissue septae that divide them. It is in essence a fat protrusion or herniation at the dermal/subcutaneous junction. Women have a higher percentage of thinner, hypodermal fibrous septae mainly oriented perpendicular to the skins surface. Men, whereas, have a higher percentage of thicker septae in a criss-cross pattern. Despite a large number of treatments available -- all of which claim to work somehow -- few actually do work, and many work with unpredictable results. Some treatments show mild improvements in the appearance of cellulite, but these improvements are not maintained over time. Cellulaze Cynosures Cellulaze Cellulite Laser Workstation is the first minimally-invasive surgical device that provides a long-term reduction of cellulite. In the procedure, which is performed under a local anesthetic, the physician inserts a small cannula under the skin. Its SideLight 3DTM side-firing technology directs laser thermal energy to the treatment zones, typically the buttocks and the thighs. The laser energy creates microbubbles at the tip of the SideLight fiber to heat and disrupt the bulging pockets of fat. Next, the SideLight fiber is used to subcise thermally the septal bonds. Lastly, the SideLight laser energy is directed upward to coagulate the collagen in the dermis and promote new growth. Patients in one U.S. study demonstrated an average increase in skin thickness of 23% and 27% at one month and one year, respectively. Skin elasticity increased an average of 32.5% at one month and 21% at one year. Best results can be seen three months post-procedure, after new collagen is created, increasing skin thickness and elasticity. On February 3, 2011, Cynosure further announced that it had acquired Elem and would also begin to market the companys non-invasive SmoothShapes. The SmoothShapes XV system treats cellulite through a process which combines photon energy with a vacuum and massage. Treatment with Radiofrequency RF energy disperses along and can preferentially heat the junction between the deeper dermis and the sub-dermal fat layer. Fat is a poor electrical conductor at frequencies of 1 MHz and

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below. Injury to the lower dermis can produce fibrosis, which may prevent fat herniation into the dermis improving the appearance of cellulite. Synerons VelaShape treatments harness IPL and RF to help smooth cellulite and reduce body circumferences. It is FDA-cleared for the temporary reduction in the appearance of cellulite. Over three million procedures have been performed worldwide. Yet, radiofrequency has generally been disregarded as a modality for subcutaneous adipocyte destruction. It is associated with complications that include second-degree burns, persistent erythema, scarring, edema, and fat atrophy.

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ACTINIC KERATOSES Actinic keratoses are precancerous skin growths resulting from cumulative exposure to the sun. The typical appearance of AK is a crusted, red macule, or a keratotic papule, that is often more easily felt than seen. Left untreated, a small percentage of these growths can eventually become squamous cell carcinoma. Early treatment can prevent this transition to malignancy. Fraxels superficial 1927 nm Thulium wavelength has produced dramatic therapeutic results for clearing of actinic keratoses (AKs). But the AKs reappear in approximately nine months and repeat treatments are necessary. Laser treatment, however, is expensive compared to cryotherapy or topical therapy with a chemotherapy cream or immune-modulating cream. These are also generally covered by insurance. The most commonly prescribed are the chemotherapy creams 5-fluorouracil (Efudex, Carac) and the immune-modulating cream imiquimod, 3.75% by weight dose (Medicis Aldara and Zyclara; Leo Pharmas Picato Gel; and generics). Medicis Resiquimod is a successor molecule to imiquimod with similar properties as an immune response modifier with greater potentcy. Topical chemotherapy and immune-modulators require weeks of application to achieve efficacy. For the duration of the treatment and for a period of time after it is completed, the precancerous lesions react with significant inflammation. This can cause discomfort and pain for the patient, resulting in sub-optimal compliance. Inflammation, however, is expected and is an indicator of treatment efficacy. Failure of the skin to react likely represents ineffective treatment. Although scarring and persistent redness are uncommon side effects of these treatments, they can cause redness, swelling and irritation to areas affected by precancerous changes. The success rates, though, are high (70%-100%). Brands cost approximately $550, with generics half of that. Another approach is the use of photodynamic therapy (PDT). Dusa Pharmaceuticals sells a BLU-U light source (the razor) and Levulan Kerastick (the razor blade) for the treatment of AKs. DUSAs Levulan brand of aminolevulinic acid HCl (ALA) is a pro-drug that is converted through a cell based process into the photosensitizer PoIX. The activated photosensitizer transfers energy to oxygen molecules found in cells, converting the oxygen into a highly energized form which destroys or alters the sensitized cells. Since CMS increased reimbursement for Levulan Kerastick to levels that made the procedure more profitable for physicians and more competitive with the standard of care, cryotherapy,

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there has been a significant ramp in revenue growth. Levulan PDT procedures only need to be performed one-to-two times initially on patients, compared to cryotherapy procedures which are usually repeated multiple times per year.

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TATTOO REMOVAL According to the Pew Research Center, more than 40% of Americans between the ages of 26 and 40 have at least one tattoo. The tattoo represents an important personal statement, and professional tattoo artists take pride in the fact that the tattoo is permanent and that a degree of pain has to be accepted in the tattoo process. Not long ago, most tattoo inks were composed of heavy metals with carcinogenic qualities milled from car paints or marking inks for corrugated boxes. Today, most tattoo inks -through regulatory intervention led by the State of California, the European Union, and a selfdirected industry cleanup -- are manufactured with GRAS materials. Tattoos are comprised of nano-sized pigment particles that have been phagocytized by cells primarily in the dermis. The purpose of laser treatment is to destroy these stained phagocytic cells, causing them to release pigments and create inflammation. This inflammation stimulates the appearance of new phagocytes to carry most of the released pigments into the lymphatics. There are always some macrophages left behind; thus, the need for multiple treatments. The process of removing tattoos is expensive, time consuming, painful, and runs risks of hypopigmentation and blistering. Some colors are very difficult, if not impossible to remove, particularly white. To be more accurate, however, tattoos are not removed from the body, only from sight. The treated tattoo particles are swept away and stored in the lymph nodes. Four to as many as twenty laser passes are required, each one spaced one month apart. Qswitched ruby, alexandrite, and Nd:YAG treatments have become a commodity procedure for physicians in tattoo removal. Driven by the 3D art form, a new complication is the layering of tattoo pigments. Where historically an inked color depicted on the skin was the same color that was placed into the tissue, today the color seen is a layering of multiple colors. The layering gives depth or a 3D visual. Therefore, determining which laser to use to remove the tattoo is more complicated. More often than not, complications in tattoo removal come from dermatologists who do not truly understand what a tattoo is and the laser physics involved in its removal. Generally, a dermatologist will have a single laser rather than multiple types of lasers capable of addressing the array of colors tattooed into the skin. HOYA ConBio, now a division of Cynosure, has been a leader in tattoo removal. Its MedLite C6 laser has two wave lengths (1064 nm and 532 nm) and utilizes a dye impregnated filter disc driven by the 532 wave length to produce both 650 nm and 585 nm. This provides the potential to treat additional tattoo pigments at a reasonable, small additional equipment cost.

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Its recently introduced RevLite Q-switched Nd:YAG allows for somewhat faster and more precise treatment of colored tattoos, which may reduce the number of required treatments. A slightly lower, but adequate power generated as a second double pulse may make for a more comfortable treatment experience for the patient. R-20 and R-0 The Wellman Center has optimized a simple technique that removes 60% of a particular unwanted tattoo in a single session that takes about 90 minutes without significant scarring or texture change. The procedure treats tattoos three times at 20-minute intervals, waiting long enough to have the white and opaque surface appearance (microscopic interstitial bubbles that appear instantly following treatment) dissipate. However, the third and fourth treatments may clear the tattoo by only an additional 10%-20%. Repeat laser passes at 20-minute intervals -- or R-20-- are effective, but too time consuming for most practices. For the patients, one hour plus visits are also unacceptable. A leapfrog method is being developed by ON Light Sciences, Inc. using a topical acceleration. An inert topical with a powerful gas carrying capacity, perfluorodecalin, fades the whitening reaction in five seconds. R-20 becomes R-0. Four laser passes can occur in five minutes. Picosecond Lasers While current standard of care utilizes Q-switched lasers in the nanosecond domain, more effective tattoo nanometer particle destruction occurs in the picosecond domain. Shorter pulse duration allows targeting smaller structures and is more color blind, meaning more effective treatment for any pigment color. Picosecond lasers are especially effective at removing 100% of green and blue colors. Not long ago, it was thought that the average tattoo particle was one-to-three microns in diameter. Theoretically, this would make it a tasty morsel to be phagocytized by a cell with an average diameter of, say, ten microns. It turns out, however, that tattoo particles are in the lower end of the nanometer range. Rapid local heating by picosecond lasers results in significant mechanical forces on the target, which are relieved by the propagation of acoustic waves. The pulse duration has to be shorter than the propagation of the acoustic waves in the target. The physical process involves the formation of a surface plasma cloud. The large electric field of a picosecond pulse strips the low mass electrons off the atoms, and the positively charged atoms left behind undergo a Coulomb explosion. A Coulomb explosion is a cold alternative to localized thermal ablation.

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PicoSure Cynosures PicoSure picosecond alexandrite (755 nm) has been successfully engineered -after a nine year research effort -- to have a small footprint and to be reliable. Not long ago, picosecond lasers could barely fit through the door, cost over $300,000, and needed two, fulltime Ph.D.s just to keep it running. The shorter pulse duration makes it ideal for treating multi-colored and recalcitrant tattoos and benign pigmented lesions. The PicoSure is further under investigation, at different wave lengths, for skin toning, striae, and pigmented scarring. At a list price of perhaps $250,000, its advantages over proven nanosecond lasers will have to be demonstrated. FDA clearance is expected later this year.

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VANITY OF VANITIES Innovation will continue to uncover unmet consumer needs. Much will change, but what will not change is the desire to look attractive. Without it, the world as we know it would stop turning. Vanitas,vanitas,omnia vanitas.

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