Laser systems shine at dermatology meeting

SAN FRANCISCO, CA - The annual American Academy of Dermatology meeting (AAD; San Francisco, CA, March 3-7) continues to be a showcase for the best of what laser and light-based technologies have to offer physicians who are interested in treating all types of skin conditions. As has been the case for the last several years, the variety and number of aesthetic procedures continues to rise, and according to many analysts and industry leaders, both the patient population and the physician customer base interested in using light-based therapies for aesthetic applications are nowhere near saturated.

“We are very enthusiastic about growth opportunities in this space,” said Joseph Caruso, CEO of Palomar Medical Technologies (Burlington, MA). “I’ve been at this for more than 10 years, since we got the first hair-removal indication, and it is such a completely different business than 10 years ago. It seems like every year the enthusiasm of the physician group increases and the decision-making process is a lot easier. Five years ago doctors would lament months over buying a piece of capital equipment. But now they see it works and their patients want it. We absolutely have validation with the medical community that light-based technologies work better than anything else.”

The healthy growth rate of the aesthetic-laser market should continue for some time, according to a presentation by John Calcagnini of CIBC World Markets (Los Angeles, CA) at the AAD meeting. Calcagnini, who has covered the cosmetic surgery field for nearly 20 years, says that with reported growth of 26% in 2005, new nontraditional channels for aesthetic-laser products, and emerging opportunities for lasers and light-based technologies in body contouring, fat treatments, and home-use products, the future is very bright indeed for suppliers of medical-laser products.

CIBC estimates the cosmetic laser market at $700 million to $1 billion worldwide and that it grew 28% to $182 million in the fourth quarter of 2005 alone. Much of this growth is being driven, Calcagnini says, by the success of the systems manufacturers in introducing their products into markets outside dermatology and plastic surgery.

“Market growth began accelerating in 2004 with the emergence of nontraditional markets for cosmetic lasers for hair removal, skin rejuvenation, and body contouring-namely, medi spas, OB/GYNs, family practice practitioners, and internal medicine physicians,” he said.

While this trend is not new news, Calcagnini speculates that the industry is only seeing the tip of the iceberg with regard to sales growth. In fact, for both hair removal and skin rejuvenation/tightening-by far the market leaders in terms of laser- and light-based aesthetic applications-the changing customer base is driving systems sales to previously unseen heights.

“The issue now is the massive underpenetration in nontraditional channels,” he said. “What is different now is the cycle is probably going to be longer this time because the nontraditional markets are so large and underpenetrated.”

According to the most recent statistics from the American Society for Aesthetic Plastic Surgery (ASAPS), from 1997 to 2005 there was 150% growth in cosmetic procedures (surgical and nonsurgical), with hair removal way up and chemical peels way down.

“Five years ago, our core customers were dermatologists and plastic surgeons,” he said. “Now more than half of our sales go to nontraditional physicians, and that group is more than 10 times the size of the traditional customer group. So the floodgates are open with potential sites. In addition, the devices (for both hair removal and skin rejuvenation) are multi-use, easier to use, with faster payback and more predictable results, and these systems are becoming staples in many physician practices.”
- Kathy Kincade