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New England Aesthetic Startups Attract Venture Capital

A number of aesthetic startups from Boston and its surrounding areas may be hitting the scene at precisely the right time. That's according to the latest edition of "Innovation Economy," a new Boston Globe column about entrepreneurship, which says that financially able baby boomers and a lack of interest among large pharmaceutical and biotech companies are making the aesthetic market an opportune place to be -- and venture capitalists are taking notice. The paper reports that by 2010, the U.S. market for aesthetic devices and therapies will reach $4.2 billion, up from $2 billion in 2005. "Millions of dollars in venture capital funding are flowing into the sector dubbed 'aesthetic medicine,'" reports the Globe, "puffing up local startups like a shot of collagen injected into a pair of lips." Among the puffed up is Follica, a Boston-based company that's researching how stem cells can be used to create new hair follicles. The company's founder, Daphne Zohar, tells the Globe that she has a captive audience -- men in their 40s, many with receding hairlines -- when she's out pitching venture capitalists. Another firm, Watertown, MA-based GI Dynamics, which the Globe says has raised $46 million, is focused on weight loss treatments. It's working on polymer sleeve that a forms a barrier between the food and the intestinal wall, which causes fewer calories to be absorbed. SmoothShapes, of Merrimack, NH, is developing a non-invasive laser-based system indicated for the temporary improvement in the appearance of cellulite. It's unclear how long many of these promising companies will remain independent, as big pharma's interest in aesthetics may peak if upward trends continue. "Culturally, it's not where the bigger players have been," Dan Dubin, vice chairman of investment bank Leerink Swann & Co., tells the Globe. "But I think they're now contemplating how they can get there."

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