SID 0008 Zeltiq Aesthetics - Part 2

Besides having a unique technology, cyrolipolysis, Zeltiq may be able to effectively use this revolutionary platform to address needs beyond the original intention to selectively reduce fat in a non-surgical way.  In 2017, it plans to use CoolSculpting to treat grade 2 cellulite and acne.  Grade 2 cellulite affects a large portion of women, while some other devices target grades 3 or higher, which are characterized by unsightly manifestations like cottage cheese thighs.  By 2018, management hopes to introduce CoolSculpting to treat acne.  In this stock research podcast, we discuss the research of Dr. Rox Anderson of the Harvard Medical School, who delves into the history of acne treatments.  Powdered dry ice and acetone pastes were prevalent in the 1940s and 1950s, but were pushed aside by antibiotics and retinoids.  A tightly controlled approach to cyrolipolysis may improve outcomes and address worries of antibiotic resistance and fetal retinoid syndrome.  Using one platform to treat three conditions would present a unique competitive advantage to Zeltiq, should it succeed.

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Stocks-in-Depth thoroughly examines the fundamentals of reasonably valued high-quality small and mid-cap growth companies. It is produced by GARP Research, a provider of equity research to institutions including many of the most well-known fund managers for over 20 years. GARP is known for its granular modelling of business lines and in-depth assessment of competition and served markets. Stocks-in-Depth searches for value and growth by researching stocks that may be out of favor, or where a major catalyst to earnings growth is hidden. Our financial models attempt to shed light on trends underneath opaque segment reporting. Stocks in Depth emphasizes balance sheet accounts and profitability margins to determine underlying return on capital, and maintains healthy skepticism regarding pro forma adjustments and undue reliance upon unconventional measures such as EBITDA. We emphasize field visits with managements, industry conferences, non-public competitors and ancillary fields to detect industry dynamics. In our search for the best companies and investment opportunities, we often challenge the consensus view. StocksinDepth forecasts over the long-term, typically over about a three year horizon, and review track records going back for years.