Kythera bags FDA approval for its double-chin-shrinking shot

Kythera Biopharmaceuticals ($KYTH) picked up an early FDA approval for its fat-melting injected treatment, a drug now cleared to erase double chins.

The drug, ATX-101, is an analog of natural deoxycholic acid, which the body produces to help break down fat. Injected beneath the chin, Kythera's treatment destroys fat cells, and in clinical trials on more than 1,000 patients, the drug significantly topped placebo in reducing what Kythera calls "submental fullness," or double chin.

Because deoxycholic acid can destroy any cells in its path, the drug is approved only for use under the chin, the FDA said, and the shot carries risks of nerve injury and facial muscle weakness.

The FDA's decision comes about two weeks ahead of schedule, and Kythera expects to launch the drug in the second half of the year. ATX-101, the first treatment of its kind, will sell under the brand name Kybella, and Kythera is pitching the injection as a high-demand, nonsurgical option for double chin reduction, citing an American Society for Dermatologic Surgery survey that estimates 68% of Americans are "bothered" by submental fat.

Kythera regained full rights to the drug last year, orchestrating an $84 million deal to buy out ex-partner Bayer. And Kybella could bring in more than $300 million a year at its peak, according to Leerink analyst Seamus Fernandez.

The company's shares have more than tripled since it pulled off a $73 million IPO in 2012, rising steadily as investors wager that its double chin injection can make a splash on the aesthetic market and potentially lure a buyout. And Kythera is cashing in on that optimism, raising roughly $143.8 million in a stock offering last month as it builds its war chest to launch Kybella.

Beyond its top prospect, Kythera is working to build out a pipeline of aesthetic medicines. Last month, the California biotech signed a $27 million deal with Actelion ($ATLN) to get its hands on a once-failed anti-inflammatory medicine that could have a future as a treatment for hair loss.

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