After Kythera Biopharmaceuticals Inc. was acquired by Parsippany, N.J.-based drug giant Allergan for $2.1 billion last year, executives could have sat back and counted their money. Instead, they started a new company that just raised $34 million in Series A financing. Sienna Biopharmaceuticals Inc. of Westlake Village, a development-stage company that is working on a laser treatment for hair removal and acne, is hoping to repeat the success of Kythera. The founding team believes it has the formula to make that dream a reality. “So here we are again, really in a very short period of time,” said John Smither, chief financial officer at Sienna who held the same title at Kythera. “We’ve been fortunate to pull together another great group of folks, build a great team, have a very successful — in my opinion — A round, and we have some very cool technology that we’re working on. So we’re kind of off to the races right now.” Thoroughbred team Eleven of the 15 executives from the leadership team, including Smither and Chief Executive Dr. Frederick Beddingfield III, came from Kythera with the remaining four joining from Sienna Labs, the precursor company that initially developed the laser technology. Combined, the team has developed more than 75 products and has been responsible for over 100 international regulatory filings and approvals for numerous medicines and devices. They have helped attain more than 35 Food and Drug Administration device clearances and 17 FDA pharmaceutical approvals, including Kybella, an injection to reduce chin fat that was Kythera’s sole proprietary technology. “VCs (venture capital firms) are generally looking for companies that have CEOs or management teams with proven records of success,” said David Diamond, global life science leader at accounting firm Mayer Hoffman McCann’s San Diego office. “Having that credibility will make it easier to raise funds and go public more quickly – the result of which would be the VC seeing a faster return on its investment.” The experience of Sienna’s executive team extends to the board, where former chief executive of Kythera Keith Leonard sits as executive chairman. In addition, Co-Founder Robert Nelsen and Managing Director Kristina Burow of Chicago-based Arch Venture Partners, the venture capital fund that was an early investor in Kythera and led Sienna’s Series A round, joined the board as part of its investment. “We tend to be active board members. We help set strategy, help create additional resources and help with necessary introductions,” said Arch’s Burow. “What we are most concerned about is that we have a strong shareholder base with long-term shareholders.” Other investors in the round included Altitude Life Science Ventures of Seattle, Partner Fund Management of San Francisco and VenVest Capital of Santa Monica. If Sienna decides to hold a Series B round, Burow said there is a “strong likelihood” that Arch would invest but that it is too early to determine if the firm would lead the Series B or be part of a syndicate. As for the $34 million raised, the majority of the money will go toward clinical trials of the laser technology, called silver plasmonic therapy. If it proves feasible, it will treat acne as well as hair removal for people with light-colored hair. The technology was developed by Dr. Todd Harris, president of Sienna Labs and head of corporate development at Sienna Biopharmaceuticals. Traditional laser hair removal is a procedure that can currently only be performed on people with dark hair, as the laser targets the melanin, or pigment, in the hair, to destroy the follicle. People with light hair don’t have enough melanin for current treatments to detect. However, silver plasmonic therapy targets silver particles that are delivered to the pores down in the hair follicle as opposed to targeting melanin, allowing people with light hair to be treated. The laser kills the follicle to prevent future hair growth. Next to the hair follicle is the sebaceous oil-producing gland. If oil from the gland builds up and blocks pores, it can get infected with bacteria, causing acne. By the same method, silver plasmonic therapy targets the silver particles delivered around the sebaceous gland to treat acne. “Sienna Labs, which was the precursor company, did proof of concept work in both of those indications, showing conceptually and clinically that it worked, which is perfect timing for this team,” said Sienna Chief Executive Beddingfield. “Their core competency is taking it through the large human clinical trials required for FDA clearance and getting those regulatory approvals.” Regulatory formula Nevertheless, with clinical trials as well as the FDA regulatory approval, time is of the essence. Delays can cost companies millions before and after product commercialization. “The clinical trial process is more often than not a very difficult and expensive process for life-science companies,” said Tom Dorsett, chief executive of ePatientFinder, a software platform that helps physicians find patients for clinical trials. “The patent clock starts ticking before trials begin. Every day that a trial is delayed is one less day that drug or device will be on the market under its patent. Once the patent expires, revenue declines quickly follow as competitors enter the market.” Kythera’s Kybella and Allergan’s Botox are prescription cosmetic procedures that are paid in full by the patient and are not covered by insurance. (Botox is sometimes covered by insurers for other uses that are not cosmetic.) It’s a niche market in the health industry that allows drug and device developers to avoid dealing with insurers, who apply pressure for price discounts. However, this also forces developers to price their products conservatively, so they remain affordable to the general public. For its laser hair removal application, silver plasmonic therapy will most likely be a cash-pay procedure, but the company has not made the final determination in regard to its acne application. Sienna has not decided yet if it plans on taking the reimbursement route or commercializing it as a cash-only treatment for acne, according to Smither, the chief financial officer. To push these indications through the clinical trial and regulatory process, the team relies on its experience and knowledge to create process efficiencies. The team already has a positive relationship with the FDA and tries to work collaboratively with the regulatory agency to move products to market in a timely fashion. Beddingfield said the hair removal treatment and acne treatment are on two different timelines. Currently, Sienna is conducting pivotal trials for the indications, which will be presented to the FDA to prove safety and effectiveness. He estimates FDA approval for both treatments sometime in 2018 or 2019, while Sienna looks for international opportunities for its silver plasmonic therapy in the interim. Currently, Sienna is unaware of any competitors in the light-hair-removal space but did say there is one other company, Sebacia Inc. of Duluth, Ga., that is developing a similar acne treatment with a gold nanoparticle technology that is also in the clinical-trial stage. Beddingfield believes if both technologies hit the market, silver will be the preferred option, because it absorbs more light per weight than gold. He also mentioned that silver plasmonic therapy may have other uses down the road and could potentially become a family of products, similar to Botox. The injectable was originally developed to reduce the appearance of wrinkles and is now used to treat such other issues as excessive sweating, overactive bladder and chronic migraine headaches. Besides exploring alternate uses for its current technology, Sienna is actively looking for other outside products to add to the pipeline and is currently considering six assets the company is interested in acquiring or licensing from its headquarters in the Conejo Valley. “We have a fantastic team, but we also have a team which we can build up to be bigger and, I think, quickly,” said Beddingfield. “Part of that is because of where we are and all the connections we have in this little ecosystem that’s been developed here in biopharma and biotech. There’s a lot of depth in the area with ex-Kythera, ex-Amgen and ex-Baxter people, and I think should we grow quickly, would be very willing to consider joining us on this venture.”
