Skin so smooth

Vanity may be deeply sinful, but to Joseph Caruso it's also highly profitable.

Caruso and his company, Palomar Medical Technologies Inc. of Burlington, are cashing on the desires of baby-boomers for smooth, flawless skin.

Palomar, which makes cosmetic laser machines that zap hair follicles and sear away fine wrinkles, has more than doubled revenue in the last two years, to $126.5 million. Profit has risen nearly fivefold in the same period, to $53 million. At the end of 2002, Palomar's stock traded at $1.05 a share; on March 30, its closing price was $39.95.

Doctors (typically dermatologists and plastic surgeons, but, increasingly, primary care physicians) buy the machines for up to $200,000 and then can charge $250 per treatment, according to the company. Consumers typically begin with a hair removal treatment, and then return for more procedures to get rid of blemishes, acne, or cellulite. The procedures also are performed in spas.

"Once consumers experience any of these procedures, they really become hooked," says Caruso. "People are willing to spend more money on themselves than ever before. They want immediate gratification, and they want a 'wow' result."

Caruso, 48, rose to chief executive in 2002 after a decade with Palomar. He joined the company as chief financial officer in 1992, the same year Palomar went public, and stayed with the company throughout the 1990s as the stock price rose but then collapsed when the company's strategies failed to produce a dominant product. The company began rebuilding after 1997, when it won government approval for a high-powered laser and brought in a new chief executive, Louis P. Valente , a longtime medical device executive who now serves as chairman.

Palomar is operating in a crowded marketplace. There are at least eight other publicly traded companies in the same business, and dozens of private companies, analysts say. Two competitors, Candela Corp. and Cynosure Inc. , also are based in Massachusetts.

But Palomar has its sights set beyond the doctor's office. The company has negotiated deals with Procter & Gamble Co.'s Gillette division and Johnson & Johnson to produce low-powered units that will be sold directly to consumers for home use. The earliest any of those deals is expected to result in products on drugstore shelves is 2009, analysts say. But once that happens, and the big P&G consumer marketing machinery kicks in, the market for laser treatments is expected to explode.

"The number one hair removal spot is the bikini line. This market has legs," says Anthony Vendetti , senior healthcare analyst at Maxim Group LLC , a New York investment management firm.

Palomar, which has 225 employees, is bursting at the seams at its Burlington research and manufacturing headquarters.

"The use of light-based technology will be a standard in years to come," says Caruso. "It will be the way people turn the clock back on aging."

Christopher Rowland can be reached at crowland@globe.com.