(Reuters) - An injection for double chin reduction developed by Kythera Biopharmaceutical Inc was unanimously backed by an independent panel of experts on Monday, bringing the drug a step closer to approval by the U.S. Food and Drug Administration.
Kythera’s stock has nearly tripled since it went public in 2012 as investors bet on what could be the first approved drug in the United States to reduce localized fat deposits.
The FDA typically accepts the panel’s recommendations.
The drug, ATX-101, is a formulation of synthetically derived deoxycholic acid, which destroys fat under the chin, leaving surrounding tissue largely unaffected.
Other injectables, such as Allergan Inc’s Botox and dermal fillers are normally used to smoothen areas of the face.
Fat removal involves more radical procedures - limited to surgeries performed under general anesthesia and liposuction - and higher costs.
Submental, or below the chin, liposuction costs between $2,700-$5,175, according to the American Society for Dermatologic Surgery.
Kythera has not revealed its pricing plans for the injection.
Submental fat, known colloqially as a “double chin” can be caused by a plethora of factors including genetics and lifestyle, and can be resistant to diet and exercise.
The drug is widely expected to win approval by May 13, when the FDA is scheduled to make its final decision.
Analysts estimate it will generate at least half a billion dollars in peak U.S. sales.
Makers of dermatologic and aesthetic drugs, including Nestle SA’s Galderma, Allergan Inc, and Johnson & Johnson will likely find ATX-101 attractive and could look to acquire rights to the drug or offer to buy the company, Cowen & Co’s Ken Cacciatore said in a client note.
Kythera’s stock was halted on Monday, but had jumped about 25 percent on Thursday when an FDA staff review concluded that the drug’s benefits outweighed its risks.
The stock closed at $53.13 on Friday.
The drug is also being reviewed by Canadian and Swiss regulators.
Last year, Kythera regained rights to the market the drug outside the United States and Canada from a unit of Germany’s Bayer AG.
Westlake Village, California-based Kythera entered into separate license agreements last month with Actelion Ltd and the University of Pennsylvania to develop a potent approach to treat hair loss. (bit.ly/1Ml86Zv)
Editing by Savio D'Souza and Ted Kerr