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Fibrocell Plans Slow Launch of New Wrinkle Drug

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The small-cap company faces capital-raising challenges after FDA approval of smile-line treatment.

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The payoff for LaViv patients, according to Pernock, is a more natural look.

"They're looking like themselves," he says. "We're really going to offer a market expansion."

Fibrocell plans to start taking skin samples of patients next month in selected markets, including Southern California, Miami, New York, and some other East Coast locations. Pernock expects to treat about 1,00 patients this year and hopes to ramp that number up to 15,000 by 2013. After that, he hopes to increase the number to as many as 40,000 a year but that will require an expansion of the company's manufacturing capacity.

The company will need to spend $20 million to $25 million over the next 12 months just to launch and make enough product. With only about $3 million in cash now, that raises a question of how Fibrocell is going to raise the money. Pernock says he's open to a marketing partner (a move that would be a positive catalyst for the stock) and there are some other possibilities being considered.

After more than doubling this year, Fibrocell's stock declined a bit since the FDA approval this week, trading around $1 a share. It's still up more than 90% this year.

A price for the treatment will be announced in coming weeks, Pernock says. He's mindful of his competitors' prices, which he estimates run $2,000 to $3,000 a year for repeat treatments. Fibrocell has been shown to treat wrinkles for six months, according to the company's own studies.

Pernock, 56, was a senior vice president at Glaxo. In his last role at that company he oversaw pharmaceuticals, vaccines, oncology, acute care, and HIV. He says he left his high-level job at the big drug maker because he saw a lot of potential at Fibrocell -- a small, undervalued company with a novel product. Over the next couple of years, he'll need to show investors he made the right move.
No positions in stocks mentioned.
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