I have been following the stock prices for the following companies: Cutera, Thermage, Syneron, and Medicis and have noticed that these companies' stock has dropped anywhere from 20 -60% in the last 12 months.

Cutera INC: $9.95 down from $25.60 per share 12 months ago
Syneron: $17 down from $26.04 per share 12 months ago
Thermage: $3.17 down from $7.50 per share 12 months ago
Medicis: $23.92 down from $32.32 per share 12 months ago

Anyone here worried about the future of cosmetic medicine? The laser companies are not selling as many machines because the end users are seeing fewer fee for service clients willing to pay the big bucks for the next generation laser treatments offered by the leading laser manufacturers?

The oil price, energy cost, subprime mortgage, inflation, food crisis issues are steering consumers away from spending on cosmetic medicine, dentistry, and certain luxury goods. I have seen the market becoming more saturated and competitive as medspas rise and fall in the past few years.

The laser manufacturers are fighting for market share much like the way medspas are fighting for new clients. It is a far more competitive market than what it was 3 years ago.

LAskindoc-

You are absolutely correct that the field is much more competitive than just a few years ago and new MedSpas are opening regularly. However, in an industrial area such as ours where I would have expected to see quite a downturn as people lose jobs and tighten their belts, we have more and more calls from people that want to do 'something' to help them feel better about things. Many of the new competitors are going to fail, but the ones who succeed will be those who stay the course with good service, good results, and respect for the patients. I doubt the quickie medspas will do well because the patients want to feel like they are getting every cent's worth for their hard-earned money.

I agree completely with your reasoning about market saturation, but there have been endless examples of this type of market shift over the years and as long as the service is still relevant, there will be survivors. The good news is it will likely be the strongest and most effective that do survive.

Great info on the stock prices also by the way!

LAskindoc,

Don't you think that there sales are down now also because they have oversold the market? The laser companies have sold to anyone willing to buy. I think some of these companies just can not find new people to sell to. I think that we are going to see many "medspas" continue to go out of business. Look at the franchises.

Also look at the units on the secondary market. Cutera has hundreds of systems on the secondary market. They are one of the worst companies for overselling their units.

Also look at the companies that you wrote about. None of these companies really have any great new equipment or procedures. The fractionated CO2's are all the rage.

The economy has played a role in this situation and only the strong will survive. I know you are in a tough market and I hope you continue to do well. Our economy in the midwest has not been hit as hard so we are continuing to grow this year.

One thing to take away from this conversation is the fact that the laser companies are "fighting" for market share. This is good for us and makes it a buyers market. Either on the secondary market or even with a new laser system. Be sure to be very aggressive with discounts, add-ons etc. Remember the laser companies will not survive without our money.

I was just at the Aesthetic show and heard from multiple companies that over the next 1 to 2 years we will see a consolidation of these aesthetic technology companies. I have heard rumors that Thermage is looking at Reliant as reliant is in financial trouble. I have also heard that Reliant is trying to go public probably to attempt to increase their buyout price.

If the laser companies want to sell more lasers they had better take better care of the doctors so we can take better care of our patients and get better clinical results. Results are King. Word of mouth is so important.

Laser companies are really dropping the ball when it comes to continuing education and encouraging "clinical exchange" between providers.

Go to http://www.geocities.com/clinicaleducationexchange/ for a greaat essay on this topic.

[Inserted correct link from other comment. Jeff]

Stock price is just one way to get a sense of what's going on. Stock prices in many industries have dropped 20-30% in the past year, and it only makes sense that aesthetic medicine would take a bigger hit because after all let's face it, these procedures are not essential.

But even so, I think this marketspace has held up really well. It's true that the market is pretty saturated at this point and I doubt we'll see the grow that happened earlier in the decade, but even treading water is pretty good given the sate of the economy (already mentioned fuel/housing/stock mess).

I work with a Sacramento plastic surgery practice and I've seen the market slow dramatically in the past year but there's still a lot of demand out there, especially for laser and other med spa procedures. The ASPS doesn't do a great job of tracking laser procedures, but they do give numbers for hair removal, skin resurfacing and vein treatment.All these procedures were up in 2007 over 06. I don't know how 08 will shake out, probably a decline, but I think it's a blip that will be overcome by the growing number of boomers seeking med spa treatments.

Secondary markets tell the story- lot's of sciton, palomar and companies that over promised and under delivered results. The strong spas will pull through.

Sometimes it's hard to tell the difference between platinum and gold...don't worry, the market will come back up soon! It's all platinum in Dubai right now...and California will always be full of gold. : )