The Artes failure is just one indicator of the impact of a struggling economy and other market forces on the tightening facial aesthetics field.
Rhytec, manufacturer of Portrait plasma-based skin resurfacing systems, also filed for bankruptcy in late 2008, and Johnson & Johnson's purchase of Mentor continues a shakeout that some say only the strongest will survive.
Experts say permanent fillers are waning in popularity.
"Permanent fillers are a concept that has come and gone," says Wendy Lewis, president, Wendy Lewis & Co., Global Aesthetic Consultancy, New York.
Even in Europe, where such fillers were "everywhere" a few years ago, "Many practitioners are no longer using (them)," she says. "That's because we now have temporary fillers with minimal to no side effects — that's what consumers are asking for."
Ms. Lewis also says the permanent filler business model never worked well for physicians, who seek return visits.
California-based Artes Medical, maker of ArteFill (polymethylmethacrylate, bovine collagen), filed for Chapter 7 bankruptcy on Dec. 1, 2008. The company said it was unable to negotiate a deal with a lender that called in a $30 million debt, according to published accounts.
Artes officials did not return requests for comment, and the company's former public relations agency was unable to answer Dermatology Times' questions.
The company's demise wasn't totally unexpected.
"Maybe the rate at which Artes went bankrupt was a surprise, but the fact that ArteFill never took off wasn't," says Peter Bye, senior analyst with New York-based Jefferies & Co.
Thanks to a particularly arduous approval process and backlash stemming from problems with ArteFill's predecessor formulation, ArteColl, Mr. Bye says, "They were in a deep hole when they started."
Still, he says, ArteFill's flameout will make it "very tough to get the next (permanent filler) approved and achieve any traction." No matter how strong future candidates are, he says, ArteFill has caused the FDA to "throw up a higher barrier" in terms of the approval process.
Other factors contributing to the ArteFill's failure include the economy and the "800-pound gorilla" created by California-based Allergan's 2005 purchase of Inamed, a maker of dermal fillers and breast implants, Mr. Bye adds.
"The economics of the dermal filler market got very crowded and deteriorated more rapidly than anyone would have imagined," he says.
For manufacturers, fillers are far less profitable than they were three years ago, he says, noting that the pricing of Restylane (hyaluronic acid, Medicis) has fallen at least 20 percent during that time.
"The only thing that's increased is marketing costs," Mr. Bye says. "That's not a great combination."