Kythera Biopharmaceuticals (KYTH) 10-K/A 2012 FY Annual report (amended)

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TABLE OF CONTENTS
PART IV
Index to Financial Statements

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K/A

Amendment No. 1

(Mark One)
ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2012
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                 to

Commission file number: 001-35663

KYTHERA Biopharmaceuticals, Inc.
(Exact Name of Registrant as Specified in its Charter)

Delaware (State or Other Jurisdiction of Incorporation or Organization)	03-0552903 (I.R.S. Employer Identification No.)
27200 West Agoura Road, Suite 200 Calabasas, California (Address of Principal Executive Offices)	91301 (Zip Code)

(818) 587-4500
(Registrant's Telephone Number, Including Area Code)

         Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $0.00001 par value	The NASDAQ Global Select Market

         Securities registered pursuant to Section 12(g) of the Act:None

         Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o    No ý

         Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o    No ý

         Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

         Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý    No o

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer o Accelerated filer o Non-accelerated filer ý
(Do not check if a
smaller reporting company) Smaller reporting company o

         Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No ý

         The registrant was not a public company as of the last business day of its most recently completed second fiscal quarter and, therefore, cannot calculate the aggregate market value of its voting and non-voting common equity held by non-affiliates as of such date.

         As of February 25, 2013, the number of outstanding shares of the registrant's common stock, par value $0.00001 per share, was 18,332,382.

DOCUMENTS INCORPORATED BY REFERENCE

         Certain sections of the registrant's definitive Proxy Statement for the 2013 Annual Meeting of Stockholders filed with the Securities and Exchange Commission pursuant to Rule 14A are incorporated by reference into Part III of this Form 10-K.

EXPLANATORY NOTE

        We are filing this Amendment No. 1 on Form 10-K/A (the "Amended Filing") to our Annual Report on Form 10-K for the year ended December 31, 2012 originally filed with the Securities and Exchange Commission ("SEC") on March 26, 2013 (the "Original Filing") to correct the presentation of basic and diluted weighted average shares outstanding and the related net income (loss) per share for the periods from December 31, 2008 through December 31, 2012, and to update the related disclosures found in Part II—Item 6. Selected Financial Data and Item 8. Financial Statements and Supplementary Data.

Description of the Restatement

        We are filing this amendment to correct the previously reported basic and diluted net income (loss) per share amounts for periods from December 31, 2008 through December 31, 2012. Although net income (loss) was correct as reported, basic and diluted net income (loss) per share was incorrectly computed. Basic and diluted net income (loss) per share is calculated by dividing net income (loss) for the period by the basic and diluted weighted average number of shares outstanding during that period. In the restated periods, preferred shares issued prior to the Company's initial public offering in October 2012 were inappropriately included in the weighted average shares outstanding used to calculate basic and diluted net income (loss) per share from their date of issuance, rather than from the date of actual conversion to common shares as a result of the Company's initial public offering. Similarly, the effects of the assumed conversion of the preferred shares should have only been included in the diluted net income per share prior to actual conversion to the extent that the impact would have been dilutive.

        For more information regarding the calculation of net income (loss) per common share, please refer to Note 2, "Summary of Significant Accounting Policies—Basic and Dilutive Net Loss per Common Share." For more information on our evaluation of this restatement of our disclosure controls and procedures, please refer to Item 9A, "Controls and Procedures."

        The corrections have no impact on the Company's net income (loss) reported in the statement of operations and comprehensive loss, balance sheets, or the statements of cash flows or stockholders' equity (deficit) for any of the above mentioned periods.

Items Amended in This Filing

        For the convenience of the reader, this Amended Filing sets forth the Original Filing, as modified and superseded where necessary to reflect the restatement. The following items have been amended as a result of, and to reflect, the restatement:

•

Part II—Item 6. Selected Financial Data;

•

Part II—Item 8. Financial Statements and Supplementary Data;

•

Part II—Item 9A. Controls and Procedures; and

•

Part IV—Item 15. Exhibits, Financial Statement Schedules.

        In accordance with applicable SEC rules, this Amended Filing includes new certifications as required by Rule 12b-15 under the Securities and Exchange Act of 1934 ("Exchange Act") from our Chief Executive Officer and Chief Financial Officer dated as of the date of filing of this Amended Filing.

        Except for the items noted above, no other information included in the Original Filing is being amended or updated by this Amended Filing. This Amended Filing continues to describe the conditions as of the date of the Original Filing and, except as contained herein, we have not updated or modified the disclosures contained in the Original Filing. Accordingly, this Amended Filing should be read in conjunction with our filings made with the SEC subsequent to the filing of the Original Filing, including any amendment to those filings.

TABLE OF CONTENTS

		Page
PART II
Item 6.	Selected Financial Data	1
Item 8.	Financial Statements and Supplementary Data	2
Item 9A.	Controls and Procedures	2
PART IV
Item 15.	Exhibits, Financial Statement Schedules	4
	SIGNATURES	11

i

PART II

ITEM 6.    Selected Financial Data.

        You should read the following selected financial data together with our audited financial statements and the related notes included in this Amended Filing and the information under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" and other financial information included in our Annual Report on Form 10-K filed on March 26, 2013. The selected financial data included in this section are not intended to replace our audited financial statements and the related notes included elsewhere in this annual report.

        We derived the selected statement of operations data for the years ended December 31, 2010, 2011 and 2012 and the balance sheet data as of December 31, 2011 and 2012 from our audited financial statements appearing elsewhere in this Annual Report on Form 10-K/A. The selected statement of operations data for the years ended December 31, 2008 and 2009 and the balance sheet data as of December 31, 2008, 2009 and 2010 are derived from our audited and unaudited financial statements not included in this Annual Report on Form 10-K/A. Our historical results are not necessarily indicative of the results that may be expected in the future.

	Year Ended December 31,
	2008			2009			2010			2011			2012
	(in thousands, except for per shares data)
Statement of Operations Data:
License income	$	—		$	—		$	4,488		$	12,985		$	19,687
Sublicense expense		—			—			411			1,188			1,936
Gross margin		—			—			4,077			11,797			17,751
Operating expenses:
Research and development		15,672			9,823			14,842			15,766			43,184
General and administrative		4,522			4,930			6,785			6,879			10,505
Total operating expenses:		20,194			14,753			21,627			22,645			53,689
Loss from operations		(20,194	)		(14,753	)		(17,550	)		(10,848	)		(35,938	)
Warrant and other interest income (expense), net		457			(7	)		589			(304	)		(861	)
Other income		—			—			930			—			—
Net loss	$	(19,737	)	$	(14,760	)	$	(16,031	)	$	(11,152	)	$	(36,799	)
Per share information:
Net loss per share of common stock, basic and diluted—restated	$	(14.62	)	$	(10.85	)	$	(11.64)	(1)	$	(7.98)	(1)	$	(7.47)	(1)
Weighted-average number of shares used in computing net loss per share of common stock, basic and diluted—restated		1,350,000			1,360,000			1,377,000	(1)		1,398,000	(1)		4,924,000	(1)

(1)

Refer to Note 2, "Summary of Significant Accounting Policies—Restatement" for a reconciliation of restated net loss per share of common stock, basic and diluted, and restated weighted average shares, basic and diluted.

1

	As of December 31,
	2008			2009			2010			2011			2012
	(in thousands)
Balance Sheet Data:
Cash, cash equivalents and marketable securities	$	24,536		$	19,754		$	21,676		$	34,577		$	79,311
Working capital		20,920			16,912			3,890			29,524			71,367
Total assets		25,327			20,092			45,509			45,079			96,222
Redeemable convertible preferred stock warrant liability		1,528			1,601			1,031			2,145			—
Redeemable convertible preferred stock		60,933			70,930			71,300			107,587			—
Accumulated deficit		(41,564	)		(56,324	)		(72,355	)		(83,507	)		(120,306	)
Total stockholders' (deficit) equity		(41,182	)		(55,445	)		(70,747	)		(81,024	)		68,906

ITEM 8.    Financial Statements and Supplementary Data.

        Our financial statements, together with the independent registered public accounting firm report thereon, are incorporated by reference from the applicable information set forth in Part IV Item 15, "Exhibits, Financial Statement Schedules" of this Annual Report on Form 10-K/A.

ITEM 9A.    Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

        Our management, with the participation of our chief executive and financial officers, evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2012. The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of December 31, 2012, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective because of the material weakness (discussed below) relating to our internal control over financial reporting.

        Management determined that the Company did not maintain effective controls over the process for calculating and reporting weighted average shares outstanding as used in the earnings per share calculations for each period presented through December 31, 2012. Specifically, management did not perform a sufficiently precise review to ensure the accuracy of the Company's calculation of weighted average common shares outstanding and earnings per share.

        This calculation has been corrected and management subsequently established appropriate preparation and review controls to ensure that all historical and current share activity is properly included, weighted and reflected in the net income (loss) per share calculations. Net loss per share for periods reported in 2013 have been correctly reported under these controls.

2

        A material weakness in internal control over financial reporting is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis by the Company's internal controls.

        We have determined that this deficiency constituted a "material weakness" in our internal control over financial reporting. We have advised our independent auditors and our audit committee of this prior deficiency in our internal control over financial reporting, and the fact that this deficiency constituted a "material weakness."

Management's Annual Report on Internal Control Over Financial Reporting

        This Annual Report on Form 10-K/A does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of the Company's independent registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public companies.

Changes in Internal Control over Financial Reporting

        There were no changes in our internal controls over financial reporting during the quarter ended December 31, 2012 identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

3

PART IV

ITEM 15.    Exhibits, Financial Statement Schedules.

(a)

Documents filed as part of this report

1.

Financial Statements

        The following financial statements are included herein:

	Page
Report of Independent Registered Public Accounting Firm	F-2
Balance Sheets at December 31, 2012 and 2011	F-3
Statements of Operations and Comprehensive Loss for each of the three years in the period ended December 31, 2012	F-4
Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) for each of the three years in the period ended December 31, 2012	F-5
Statements of Cash Flows for each of the three years in the period ended December 31, 2012	F-6
Notes to Financial Statements	F-7

2.

Financial Statement Schedules

        None, as all required disclosures have been made in the Financial Statements and notes thereto or are not applicable.

4

(b)

Exhibits

				Incorporated by Reference
Exhibit Number							Filed Herewith
			Exhibit Description	Form	Date	Number
	1.1		Form of Underwriting Agreement	S-1/A	08/31/2012	1.1
	3.1		Seventh Amended and Restated Certificate of Incorporation of KYTHERA Biopharmaceuticals, Inc.	8-K	10/16/2012	3.1
	3.2		Amended and Restated Bylaws of KYTHERA Biopharmaceuticals, Inc.	8-K	10/16/2012	3.2
	4.1		Reference is made to exhibits 3.1 and 3.2.
	4.2		Specimen Common Stock Certificate.	S-1/A	08/31/2012	4.2
	10.1(a	)	Third Amended and Restated Investor Rights Agreement, dated August 30, 2011, between KYTHERA Biopharmaceuticals, Inc. and certain of its stockholders.	S-1/A	05/17/2012	10.1(a)
	10.1(b	)	Amendment, dated January 27, 2012, to Third Amended and Restated Investor Rights Agreement, dated August 30, 2011, between KYTHERA Biopharmaceuticals, Inc. and certain of its stockholders.	S-1/A	05/17/2012	10.1(b)
	10.2	#	Form of Indemnity Agreement for directors and officers.	S-1/A	05/17/2012	10.2
	10.3(a	)	Loan and Security Agreement No. 1991, dated as of March 21, 2011, by and between Lighthouse Capital Partners VI, L.P. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.3(a)
	10.3(b	)	Amendment No. 1, dated December 30, 2011, to that certain Loan and Security Agreement No. 1991, dated as of March 21, 2011, by and between Lighthouse Capital Partners VI, L.P. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.3(b)
	10.3(c	)	Amendment No. 2, dated July 23, 2012, to that certain Loan and Security Agreement No. 1991, dated as of March 21, 2011, by and between Lighthouse Capital Partners VI, L.P. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	08/31/2012	10.3(c)

5

				Incorporated by Reference
Exhibit Number							Filed Herewith
			Exhibit Description	Form	Date	Number
	10.3(d	)	Amendment No. 3, dated November 30, 2012, to that certain Loan and Security Agreement No. 1991, dated as of March 21, 2011, as amended, by and between Lighthouse Capital Partners VI, L.P. and KYTHERA Biopharmaceuticals, Inc.	8-K	12/05/2012	10.1
	10.4(a	)	Standard Multi-Tenant Office Lease—Gross, dated December 2009, by and between 27200 Associates, L.L.C. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.4(a)
	10.4(b	)	First Amendment, dated January 8, 2010, to that the certain Standard Multi-Tenant Office Lease-Gross, dated December 2009, by and between 27200 Associates, L.L.C. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.4(b)
	10.4(c	)	Second Amendment, dated April 21, 2011, to that the certain Standard Multi-Tenant Office Lease-Gross, dated December 2009, by and between 27200 Associates, L.L.C. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.4(c)
	10.4(d	)	Third Amendment, dated March 23, 2012, to that the certain Standard Multi-Tenant Office Lease-Gross, dated December 2009, by and between 27200 Associates, L.L.C. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.4(d)
	10.5(a)	†	License Agreement, dated August 26, 2010, by and between Bayer Consumer Care AG and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.5(a)
	10.5(b)	†	First Amendment, dated March 21, 2011, to that certain License Agreement, dated August 26, 2010, by and between Bayer Consumer Care AG and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.5(b)
	10.5(c)	†	Second Amendment, dated April 2, 2012, to that certain License Agreement, dated August 26, 2010, by and between Bayer Consumer Care AG and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.5(c)

6

				Incorporated by Reference
Exhibit Number							Filed Herewith
			Exhibit Description	Form	Date	Number
	10.6(a)	†	Services, Research, Development and Collaboration Agreement, dated August 26, 2010, by and between Intendis GmbH and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.6(a)
	10.6(b)	†	First Amendment, dated November 17, 2010, to that certain Services, Research, Development and Collaboration Agreement, dated August 26, 2010, by and between Intendis GmbH and KYTHERA Biopharmaceuticals,  Inc.	S-1/A	05/17/2012	10.6(b)
	10.6(c)	†	Second Amendment, dated April 2, 2012, to that certain Services, Research, Development and Collaboration Agreement, dated August 26, 2010, by and between Intendis GmbH and KYTHERA Biopharmaceuticals,  Inc.	S-1/A	05/17/2012	10.6(c)
	10.7(a)	†	License Agreement, dated August 29, 2005, by and between KYTHERA Biopharmaceuticals and Los Angeles Biomedical Research Institute at Harbor/UCLA Medical Center.	S-1/A	05/17/2012	10.7(a)
	10.7(b	)	Amendment, dated January 5, 2010, to that certain License Agreement, dated August 29, 2005, by and between KYTHERA Biopharmaceuticals and Los Angeles Biomedical Research Institute at Harbor/UCLA Medical Center.	S-1/A	05/17/2012	10.7(b)
	10.7(c	)	Amendment, dated August 18, 2010, to that certain License Agreement, dated August 29, 2005, by and between KYTHERA Biopharmaceuticals and Los Angeles Biomedical Research Institute at Harbor/UCLA Medical Center.	S-1/A	05/17/2012	10.7(c)
	10.8(a)	†	Manufacturing and Supply Agreement, dated July 7, 2009, by and between Pfizer, Inc. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	06/11/2012	10.8(a)
	10.8(b)	†	First Amendment, dated May 21, 2012, to Manufacturing and Supply Agreement, dated July 7, 2009 by and between Pfizer, Inc. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	06/11/2012	10.8(b)

7

				Incorporated by Reference
Exhibit Number							Filed Herewith
			Exhibit Description	Form	Date	Number
	10.9	†	Development and Supply Agreement, dated November 29, 2010, by and between Hospira Worldwide, Inc. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.9
	10.10(a)	#	KYTHERA Biopharmaceuticals, Inc. 2004 Stock Plan, as amended.	S-1/A	05/17/2012	10.10(a)
	10.10(b)	#	Form of Stock Option Grant Notice and Stock Option Agreement under the 2004 Stock Plan, as amended.	S-1/A	05/17/2012	10.10(b)
	10.11(a)	#	KYTHERA Biopharmaceuticals, Inc. 2012 Equity Incentive Award Plan.	10-Q	11/13/2012	10.3(a)
	10.11(b)	#	Form of Stock Option Grant Notice and Stock Option Agreement under the 2012 Equity Incentive Award Plan.	S-1/A	05/17/2012	10.11(b)
	10.11(c)	#	Form of Restricted Stock Award Agreement and Restricted Stock Unit Award Grant Notice under the 2012 Equity Incentive Award Plan.	S-1/A	05/17/2012	10.11(c)
	10.12	#	Amended and Restated Employment Agreement, dated April 2, 2012, by and between Keith R. Leonard, Jr. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.12
	10.13	#	Amended and Restated Employment Agreement, dated April 2, 2012, by and between John W. Smither and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.13
	10.14	#	Amended and Restated Employment Agreement, dated April 2, 2012, by and between Patricia S. Walker, M.D., Ph.D., and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.14
	10.15	#	Amended and Restated Employment Agreement, dated April 2, 2012, by and between Keith L. Klein, J.D. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.15
	10.16	#	Amended and Restated Employment Agreement, dated April 2, 2012, by and between Jeffrey D. Webster and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.16
	10.17	#	Non-employee Director Compensation Program.	S-1/A	05/17/2012	10.17

8

				Incorporated by Reference
Exhibit Number							Filed Herewith
			Exhibit Description	Form	Date	Number
	10.18	#	Employment agreement, dated March 23, 2013, by and between Frederick Beddingfield, III, M.D., Ph.D., and KYTHERA Biopharmaceuticals, Inc.	10-K	03/26/2013	10.18
	23.1		Consent of independent registered public accounting firm.				X
	24.1		Power of Attorney.	10-K	03/26/2013	24.1
	31.1		Certification of Chief Executive Officer of KYTHERA Biopharmaceuticals, Inc., as required by Rule 13a-14(a) or Rule 15d-14(a).	10-K	03/26/2013	31.1
	31.2		Certification of Chief Financial Officer of KYTHERA Biopharmaceuticals, Inc., as required by Rule 13a-14(a) or Rule 15d-14(a).	10-K	03/26/2013	31.2
	31.3		Certification of Chief Executive Officer of KYTHERA Biopharmaceuticals, Inc., as required by Rule 13a-14(a) or Rule 15d-14(a).				X
	31.4		Certification of Chief Financial Officer of KYTHERA Biopharmaceuticals, Inc., as required by Rule 13a-14(a) or Rule 15d-14(a).				X
	32.1	**	Certification by the Chief Executive Officer and Chief Financial Officer, as required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 36 of Title 18 of the United States Code (18 U.S.C. §1350).	10-K	03/26/2013	32.1
	32.2	**	Certification by the Chief Executive Officer and Chief Financial Officer, as required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 36 of Title 18 of the United States Code (18 U.S.C. §1350).				X
	101.INS	***	XBRL Instance Document				X
��	101.SCH	***	XBRL Taxonomy Extension Schema Document				X
	101.CAL	***	XBRL Taxonomy Extension Calculation Linkbase Document				X
	101.DEF	***	XBRL Taxonomy Extension Definition Linkbase Document				X

9

				Incorporated by Reference
Exhibit Number							Filed Herewith
			Exhibit Description	Form	Date	Number
	101.LAB	***	XBRL Taxonomy Extension Labels Linkbase Document				X
	101.PRE	***	XBRL Taxonomy Extension Presentation Linkbase Document				X

†

Confidential treatment has been granted for certain information contained in this exhibit. Such information has been omitted and filed separately with the Securities and Exchange Commission.

#

Indicates management contract or compensatory plan.

**

The certifications attached as Exhibits 32.1 and 32.2 that accompany this Annual Report on Form 10-K/A, are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of KYTHERA Biopharmaceuticals, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-K/A, irrespective of any general incorporation language contained in such filing.

***

Pursuant to Rule 406T of Regulation S-T, the XBRL files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

10

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	KYTHERA Biopharmaceuticals, Inc.
September 27, 2013	By:	/s/ JOHN W. SMITHER John W. Smither Chief Financial Officer (Principal Financial and Accounting Officer)

11

EXHIBIT INDEX

				Incorporated by Reference
Exhibit Number							Filed Herewith
			Exhibit Description	Form	Date	Number
	1.1		Form of Underwriting Agreement	S-1/A	08/31/2012	1.1
	3.1		Seventh Amended and Restated Certificate of Incorporation of KYTHERA Biopharmaceuticals, Inc.	8-K	10/16/2012	3.1
	3.2		Amended and Restated Bylaws of KYTHERA Biopharmaceuticals, Inc.	8-K	10/16/2012	3.2
	4.1		Reference is made to exhibits 3.1 and 3.2.
	4.2		Specimen Common Stock Certificate.	S-1/A	08/31/2012	4.2
	10.1(a	)	Third Amended and Restated Investor Rights Agreement, dated August 30, 2011, between KYTHERA Biopharmaceuticals, Inc. and certain of its stockholders.	S-1/A	05/17/2012	10.1(a)
	10.1(b	)	Amendment, dated January 27, 2012, to Third Amended and Restated Investor Rights Agreement, dated August 30, 2011, between KYTHERA Biopharmaceuticals, Inc. and certain of its stockholders.	S-1/A	05/17/2012	10.1(b)
	10.2	#	Form of Indemnity Agreement for directors and officers.	S-1/A	05/17/2012	10.2
	10.3(a	)	Loan and Security Agreement No. 1991, dated as of March 21, 2011, by and between Lighthouse Capital Partners VI, L.P. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.3(a)
	10.3(b	)	Amendment No. 1, dated December 30, 2011, to that certain Loan and Security Agreement No. 1991, dated as of March 21, 2011, by and between Lighthouse Capital Partners VI, L.P. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.3(b)
	10.3(c	)	Amendment No. 2, dated July 23, 2012, to that certain Loan and Security Agreement No. 1991, dated as of March 21, 2011, by and between Lighthouse Capital Partners VI, L.P. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	08/31/2012	10.3(c)

12

				Incorporated by Reference
Exhibit Number							Filed Herewith
			Exhibit Description	Form	Date	Number
	10.3(d	)	Amendment No. 3, dated November 30, 2012, to that certain Loan and Security Agreement No. 1991, dated as of March 21, 2011, as amended, by and between Lighthouse Capital Partners VI, L.P. and KYTHERA Biopharmaceuticals, Inc.	8-K	12/05/2012	10.1
	10.4(a	)	Standard Multi-Tenant Office Lease—Gross, dated December 2009, by and between 27200 Associates, L.L.C. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.4(a)
	10.4(b	)	First Amendment, dated January 8, 2010, to that the certain Standard Multi-Tenant Office Lease-Gross, dated December 2009, by and between 27200 Associates, L.L.C. and KYTHERA Biopharmaceuticals,  Inc.	S-1/A	05/17/2012	10.4(b)
	10.4(c	)	Second Amendment, dated April 21, 2011, to that the certain Standard Multi-Tenant Office Lease-Gross, dated December 2009, by and between 27200 Associates, L.L.C. and KYTHERA Biopharmaceuticals,  Inc.	S-1/A	05/17/2012	10.4(c)
	10.4(d	)	Third Amendment, dated March 23, 2012, to that the certain Standard Multi-Tenant Office Lease-Gross, dated December 2009, by and between 27200 Associates, L.L.C. and KYTHERA Biopharmaceuticals,  Inc.	S-1/A	05/17/2012	10.4(d)
	10.5(a)	†	License Agreement, dated August 26, 2010, by and between Bayer Consumer Care AG and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.5(a)
	10.5(b)	†	First Amendment, dated March 21, 2011, to that certain License Agreement, dated August 26, 2010, by and between Bayer Consumer Care AG and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.5(b)
	10.5(c)	†	Second Amendment, dated April 2, 2012, to that certain License Agreement, dated August 26, 2010, by and between Bayer Consumer Care AG and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.5(c)

13

				Incorporated by Reference
Exhibit Number							Filed Herewith
			Exhibit Description	Form	Date	Number
	10.6(a)	†	Services, Research, Development and Collaboration Agreement, dated August 26, 2010, by and between Intendis GmbH and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.6(a)
	10.6(b)	†	First Amendment, dated November 17, 2010, to that certain Services, Research, Development and Collaboration Agreement, dated August 26, 2010, by and between Intendis GmbH and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.6(b)
	10.6(c)	†	Second Amendment, dated April 2, 2012, to that certain Services, Research, Development and Collaboration Agreement, dated August 26, 2010, by and between Intendis GmbH and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.6(c)
	10.7(a)	†	License Agreement, dated August 29, 2005, by and between KYTHERA Biopharmaceuticals and Los Angeles Biomedical Research Institute at Harbor/UCLA Medical Center.	S-1/A	05/17/2012	10.7(a)
	10.7(b	)	Amendment, dated January 5, 2010, to that certain License Agreement, dated August 29, 2005, by and between KYTHERA Biopharmaceuticals and Los Angeles Biomedical Research Institute at Harbor/UCLA Medical Center.	S-1/A	05/17/2012	10.7(b)
	10.7(c	)	Amendment, dated August 18, 2010, to that certain License Agreement, dated August 29, 2005, by and between KYTHERA Biopharmaceuticals and Los Angeles Biomedical Research Institute at Harbor/UCLA Medical Center.	S-1/A	05/17/2012	10.7(c)
	10.8(a)	†	Manufacturing and Supply Agreement, dated July 7, 2009, by and between Pfizer, Inc. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	06/11/2012	10.8(a)
	10.8(b)	†	First Amendment, dated May 21, 2012, to Manufacturing and Supply Agreement, dated July 7, 2009 by and between Pfizer, Inc. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	06/11/2012	10.8(b)
	10.9	†	Development and Supply Agreement, dated November 29, 2010, by and between Hospira Worldwide, Inc. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.9

14

				Incorporated by Reference
Exhibit Number							Filed Herewith
			Exhibit Description	Form	Date	Number
	10.10(a)	#	KYTHERA Biopharmaceuticals, Inc. 2004 Stock Plan, as amended.	S-1/A	05/17/2012	10.10(a)
	10.10(b)	#	Form of Stock Option Grant Notice and Stock Option Agreement under the 2004 Stock Plan, as amended.	S-1/A	05/17/2012	10.10(b)
	10.11(a)	#	KYTHERA Biopharmaceuticals, Inc. 2012 Equity Incentive Award Plan.	10-Q	11/13/2012	10.3(a)
	10.11(b)	#	Form of Stock Option Grant Notice and Stock Option Agreement under the 2012 Equity Incentive Award Plan.	S-1/A	05/17/2012	10.11(b)
	10.11(c)	#	Form of Restricted Stock Award Agreement and Restricted Stock Unit Award Grant Notice under the 2012 Equity Incentive Award Plan.	S-1/A	05/17/2012	10.11(c)
	10.12	#	Amended and Restated Employment Agreement, dated April 2, 2012, by and between Keith R. Leonard, Jr. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.12
	10.13	#	Amended and Restated Employment Agreement, dated April 2, 2012, by and between John W. Smither and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.13
	10.14	#	Amended and Restated Employment Agreement, dated April 2, 2012, by and between Patricia S. Walker, M.D., Ph.D., and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.14
	10.15	#	Amended and Restated Employment Agreement, dated April 2, 2012, by and between Keith L. Klein, J.D. and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.15
	10.16	#	Amended and Restated Employment Agreement, dated April 2, 2012, by and between Jeffrey D. Webster and KYTHERA Biopharmaceuticals, Inc.	S-1/A	05/17/2012	10.16
	10.17	#	Non-employee Director Compensation Program.	S-1/A	05/17/2012	10.17
	10.18	#	Employment agreement, dated March 23, 2013, by and between Frederick Beddingfield, III, M.D., Ph.D., and KYTHERA Biopharmaceuticals, Inc.	10-K	03/26/2013	10.18
	23.1		Consent of independent registered public accounting firm.				X
	24.1		Power of Attorney.	10-K	03/26/2013	24.1

15

				Incorporated by Reference
Exhibit Number							Filed Herewith
			Exhibit Description	Form	Date	Number
	31.1		Certification of Chief Executive Officer of KYTHERA Biopharmaceuticals, Inc., as required by Rule 13a-14(a) or Rule 15d-14(a).	10-K	03/26/2013	31.1
	31.2		Certification of Chief Financial Officer of KYTHERA Biopharmaceuticals, Inc., as required by Rule 13a-14(a) or Rule 15d-14(a).	10-K	03/26/2013	31.2
	31.3		Certification of Chief Executive Officer of KYTHERA Biopharmaceuticals, Inc., as required by Rule 13a-14(a) or Rule 15d-14(a).				X
	31.4		Certification of Chief Financial Officer of KYTHERA Biopharmaceuticals, Inc., as required by Rule 13a-14(a) or Rule 15d-14(a).				X
	32.1	**	Certification by the Chief Executive Officer, and Chief Financial Officer, as required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 36 of Title 18 of the United States Code (18 U.S.C. §1350).	10-K	03/26/2013	32.1
	32.2	**	Certification by the Chief Executive Officer, and Chief Financial Officer, as required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 36 of Title 18 of the United States Code (18 U.S.C. §1350).				X
	101.INS	***	XBRL Instance Document				X
	101.SCH	***	XBRL Taxonomy Extension Schema Document				X
	101.CAL	***	XBRL Taxonomy Extension Calculation Linkbase Document				X
	101.DEF	***	XBRL Taxonomy Extension Definition Linkbase Document				X
	101.LAB	***	XBRL Taxonomy Extension Labels Linkbase Document				X
	101.PRE	***	XBRL Taxonomy Extension Presentation Linkbase Document				X

†

Confidential treatment has been granted for certain information contained in this exhibit. Such information has been omitted and filed separately with the Securities and Exchange Commission.

#

Indicates management contract or compensatory plan.

**

The certifications attached as Exhibits 32.1 and 32.2 that accompany this Annual Report on Form 10-K/A are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of KYTHERA Biopharmaceuticals, Inc. under the

16

Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-K/A, irrespective of any general incorporation language contained in such filing.

***

Pursuant to Rule 406T of Regulation S-T, the XBRL files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

17

KYTHERA BIOPHARMACEUTICALS, INC.

Index to Financial Statements

	Page
Report of Independent Registered Public Accounting Firm		F-2
Balance Sheets		F-3
Statements of Operations and Comprehensive Loss		F-4
Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)		F-5
Statements of Cash Flows		F-6
Notes to Financial Statements		F-7

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
of KYTHERA Biopharmaceuticals, Inc.

        We have audited the accompanying balance sheets of KYTHERA Biopharmaceuticals, Inc. as of December 31, 2012 and 2011, and the related statements of operations and comprehensive loss, redeemable convertible preferred stock and stockholders' equity (deficit), and cash flows for each of the three years in the period ended December 31, 2012. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of KYTHERA Biopharmaceuticals, Inc. at December 31, 2012 and 2011, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles.

        As described in Note 2, the financial statements for the years ended December 31, 2012, 2011 and 2010 have been restated to correct an error in basic and diluted net loss per share and basic and diluted weighted average shares outstanding for each of the three years in the period ended December 31, 2012.

	/s/ Ernst & Young LLP
Los Angeles, California March 26, 2013, except for Note 2 as it relates to Restatement and Basic and Dilutive Net Loss per Common Share, as to which the date is September 26, 2013.

F-2

KYTHERA BIOPHARMACEUTICALS, INC.

Balance Sheets

	December 31,
	2012			2011
Assets
Current assets:
Cash and cash equivalents	$	79,311,000		$	34,577,000
Restricted cash, current portion		7,657,000			7,403,000
Deferred licensor payment		—			352,000
Prepaid clinical trial expenses		—			938,000
Prepaid expenses and other current assets		621,000			1,058,000
Total current assets		87,589,000			44,328,000
Property and equipment, net		275,000			720,000
Restricted cash—net of current portion		8,321,000			—
Other assets		37,000			31,000
Total assets	$	96,222,000		$	45,079,000
Liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)
Current liabilities:
Accounts payable	$	2,152,000		$	962,000
Accrued personnel costs		2,173,000			1,500,000
Accrued costs for services		4,862,000			3,544,000
Accrued interest		22,000			—
Note payable, current portion		1,160,000			—
Payable to licensor		—			1,560,000
Deferred development funds, current portion		5,853,000			4,951,000
Deferred revenue		—			3,847,000
Total current liabilities		16,222,000			16,364,000
Deferred rent		9,000			7,000
Deferred development funds—net of current portion		8,321,000			—
Note payable—net of current portion		2,764,000			—
Redeemable convertible preferred stock warrants		—			2,145,000
Total liabilities		27,316,000			18,516,000
Commitments and contingencies
Redeemable convertible preferred stock, $0.0001 par value per share:
Series A redeemable convertible preferred stock, no shares and 4,775,000 shares authorized, no shares and 1,806,000 shares issued and outstanding at December 31, 2012 and 2011, respectively liquidation preference of $955,000 at December 31, 2011		—			902,000
Series B redeemable convertible preferred stock, no shares and 11,171,000 shares authorized, no shares and 3,981,000 shares issued and outstanding at December 31, 2012 and 2011, respectively liquidation preference of $30,280,000 at December 31, 2011		—			30,193,000
Series C redeemable convertible preferred stock, no shares and 8,300,000 shares authorized, no shares and 3,023,000 shares issued and outstanding at December 31, 2012 and 2011, respectively liquidation preference of $40,370,000 at December 31, 2011		—			40,205,000
Series D redeemable convertible preferred stock, no shares and 9,970,000 shares authorized, no shares and 2,692,000 shares issued and outstanding at December 31, 2012 and 2011, respectively liquidation preference of $37,425,000 at December 31, 2011		—			36,287,000
Stockholders' equity (deficit):
Common stock, $0.00001 par value, 300,000,000 and 45,000,000 shares authorized, 18,325,000 and 1,399,000 shares issued and outstanding at December 31, 2012 and 2011, respectively		—			—
Additional paid in capital		189,212,000			2,483,000
Accumulated other comprehensive loss		—			—
Accumulated deficit		(120,306,000	)		(83,507,000	)
Total stockholders' equity (deficit)		68,906,000			(81,024,000	)
Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)	$	96,222,000		$	45,079,000

See accompanying notes.

F-3

KYTHERA BIOPHARMACEUTICALS, INC.

Statements of Operations and Comprehensive Loss

	Year Ended December 31,
	2012			2011			2010
License income	$	19,687,000		$	12,985,000		$	4,488,000
Sublicense expense		1,936,000			1,188,000			411,000
Gross margin		17,751,000			11,797,000			4,077,000
Operating expenses:
Research and development		43,184,000			15,766,000			14,842,000
General and administrative		10,505,000			6,879,000			6,785,000
Total operating expenses		53,689,000			22,645,000			21,627,000
Loss from operations		(35,938,000	)		(10,848,000	)		(17,550,000	)
Warrant and other interest (expense) income, net		(861,000	)		(304,000	)		589,000
Other income		—			—			930,000
Net loss	$	(36,799,000	)	$	(11,152,000	)	$	(16,031,000	)
Other comprehensive income (loss):
Unrealized gain on marketable securities		—			—			4,000
Comprehensive loss	$	(36,799,000	)	$	(11,152,000	)	$	(16,027,000	)
Per share information:
Net loss, basic and diluted (restated)	$	(7.47	)	$	(7.98	)	$	(11.64	)
Basic and diluted weighted average shares outstanding (restated)		4,924,000			1,398,000			1,377,000

See accompanying notes.

F-4

KYTHERA BIOPHARMACEUTICALS, INC.

Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)

	Redeemable Convertible Preferred Stock																								Stockholders' Equity (Deficit)
	Series A Redeemable Convertible Preferred Stock						Series B Redeemable Convertible Preferred Stock						Series C Redeemable Convertible Preferred Stock						Series D Redeemable Convertible Preferred Stock
																									Common Stock
																																	Accumulated Other Comprehensive Income (loss)
																												Par Value		Additional Paid in Capital						Accumulated Deficit
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount			Shares														Total
Balance at December 31, 2009		1,806,000			902,000			3,981,000			30,193,000			2,996,000			39,835,000			—			—			1,367,000			—		883,000			(4,000	)		(56,324,000	)		(55,445,000	)
Issuance of common stock in connection with exercise of stock options		—			—			—			—			—			—			—			—			26,000			—		58,000			—			—			58,000
Issuance of common stock in January 2010 at $5.50 per share for services		—			—			—			—			—			—			—			—			1,000			—		9,000			—			—			9,000
Issuance of Series C convertible preferred stock in November 2010 at $13.3530 per share for services		—			—			—			—			27,000			370,000			—			—			—			—		—			—			—			—
Compensation expense related to stock options and restricted common stock		—			—			—			—			—			—			—			—			—			—		658,000			—			—			658,000
Unrealized gain on marketable securities		—			—			—			—			—			—			—			—			—			—		—			4,000			—			4,000
Net loss		—			—			—			—			—			—			—			—			—			—		—			—			(16,031,000	)		(16,031,000	)
Balance at December 31, 2010		1,806,000			902,000			3,981,000			30,193,000			3,023,000			40,205,000			—			—			1,394,000			—		1,608,000			—			(72,355,000	)		(70,747,000	)
Issuance of common stock in connection with exercise of stock options		—			—			—			—			—			—			—			—			12,000			—		18,000			—			—			18,000
Re-purchase of common stock in June 2011		—			—			—			—			—			—			—			—			(7,000	)		—		(1,000	)		—			—			(1,000	)
Issuance of Series D convertible preferred stock in August 2011 for cash at $13.9040 per share, net of issuance costs of $1,138,000		—			—			—			—			—			—			2,692,000			36,287,000			—			—		—			—			—			—
Compensation expense related to stock options		—			—			—			—			—			—			—			—			—			—		858,000			—			—			858,000
Net loss		—			—			—			—			—			—			—			—			—			—		—			—			(11,152,000	)		(11,152,000	)
Balance at December 31, 2011		1,806,000			902,000			3,981,000			30,193,000			3,023,000			40,205,000			2,692,000			36,287,000			1,399,000			—		2,483,000			—		$	(83,507,000	)	$	(81,024,000	)
Issuance of common stock in connection with exercise of stock options		—			—			—			—			—			—			—			—			51,000			—		123,000			—			—			123,000
Issuance of common stock in January 2012 at $8.22 per share for services		—			—			—			—			—			—			—			—			5,000			—		43,000			—			—			43,000
Issuance of Series D convertible preferred stock in July 2012 at $13.9040 per share for services		—			—			—			—			—			—			11,000			158,000			—			—		—			—			—			—
Issuance of common stock in October 2012 at $22.50 per share for services		—			—			—			—			—			—			—			—			63,000			—		1,414,000			—			—			1,414,000
Compensation expense related to stock options		—			—			—			—			—			—			—			—			—			—		1,816,000			—			—			1,816,000
Issuance of 5,060,000 shares of common stock at $16.00 per share, net of issuance cost of $8,481,000		—			—			—			—			—			—			—			—			5,060,000			—		72,479,000			—			—			72,479,000
Conversion of convertible preferred stock into common stock		(1,806,000	)		(902,000	)		(3,981,000	)		(30,193,000	)		(3,023,000	)		(40,205,000	)		(2,703,000	)		(36,445,000	)		11,545,000			—		107,743,000			—			—			107,743,000
Reclassification of Preferred Stock Warrant Liability to additional paid in capital		—			—			—			—			—			—			—			—			—			—		3,101,000			—			—			3,101,000
Issuance of common stock due to net exercise of warrants		—			—			—			—			—			—			—			—			201,000			—		—			—			—			—
Issuance of common stock due to warrants exercised for cash		—			—			—			—			—			—			—			—			1,000			—		10,000			—			—			10,000
Net loss		—			—			—			—			—			—			—			—			—			—		—			—			(36,799,000	)		(36,799,000	)
Balance at December 31, 2012		—		$	—			—		$	—			—		$	—			—		$	—			18,325,000			—	$	189,212,000		$	—		$	(120.306,000	)	$	68,906,000

See accompanying notes.

F-5

KYTHERA BIOPHARMACEUTICALS, INC.

Statements of Cash Flows

	Year Ended December 31,
	2012			2011			2010
Operating activities
Net loss	$	(36,799,000	)	$	(11,152,000	)	$	(16,031,000	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Amortization of (discount) on marketable securities		—			—			(16,000	)
Amortization of debt issuance cost		272,000			—			—
Amortization of redeemable convertible preferred stock warrant value		—			71,000			—
Depreciation		635,000			54,000			174,000
Loss on disposal of property and equipment		—			4,000			—
Revaluation of redeemable convertible preferred stock warrants		422,000			229,000			(570,000	)
Stock-based compensation		3,429,000			858,000			1,037,000
Changes in assets and liabilities:
Prepaid expenses and other current assets		561,000			(809,000	)		(209,000	)
Restricted cash		(8,575,000	)		14,416,000			(21,819,000	)
Deferred licensor payment		352,000			1,188,000			(1,540,000	)
Other assets		(6,000	)		(12,000	)		—
Accounts payable and other accrued liabilities		3,203,000			80,000			2,920,000
Deferred revenue		(3,847,000	)		(12,984,000	)		16,831,000
Deferred development funds		9,223,000			(14,652,000	)		19,603,000
Deferred long term payable to licensor		(1,560,000	)		—			1,560,000
Deferred rent		2,000			2,000			5,000
Net cash (used in) provided by operating activities		(32,688,000	)		(22,707,000	)		1,945,000
Investing activities
Proceeds from sales of marketable securities		—			—			12,697,000
Investment in property and equipment		(190,000	)		(696,000	)		(100,000	)
Net cash (used in) provided by investing activities		(190,000	)		(696,000	)		12,597,000
Financing activities
Borrowings on credit facility		5,000,000			—			—
Proceeds from initial public offering, net of issuance costs		72,479,000			—			—
Proceeds from common stock option and warrant exercises		133,000			17,000			58,000
Net proceeds from issuance of convertible preferred stock		—			36,287,000			—
Net cash provided by financing activities		77,612,000			36,304,000			58,000
Net increase in cash and cash equivalents		44,734,000			12,901,000			14,600,000
Cash and cash equivalents at beginning of period		34,577,000			21,676,000			7,076,000
Cash and cash equivalents at end of period	$	79,311,000		$	34,577,000		$	21,676,000
Supplemental disclosures
Issuance of redeemable convertible preferred stock warrants for senior loan facility commitment	$	534,000		$	885,000		$	—
Reclassification of warrants to purchase common stock	$	3,101,000		$	—		$	—
Conversion of convertible preferred stock to common stock	$	107,743,000		$	—		$	—
Issuance of redeemable convertible preferred stock for licensor payment	$	158,000		$	—		$	195,000
Issuance of redeemable convertible preferred stock for services rendered	$	—		$	—		$	175,000
Issuance of common stock for licensor payment	$	1,414,000		$	—		$	—
Issuance of common stock for services rendered	$	43,000		$	—		$	9,000
Interest expense paid in cash	$	147,000		$	—		$	—

See accompanying notes.

F-6

KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements

1. Organization and Basis of Presentation

        KYTHERA Biopharmaceuticals, Inc. ("KYTHERA" or the "Company") is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel prescription products for the aesthetic medicine market. The Company's objective is to develop first-in-class, prescription aesthetic products using an approach that relies on the scientific rigor of biotechnology to address unmet needs in the rapidly-growing market for aesthetic medicine. The Company's initial focus is on the facial aesthetics market, which comprises the majority of the aesthetics medicine market. The Company's product candidate, ATX-101, is a potential first-in-class, injectable drug currently in Phase III clinical development for the reduction of submental fat, which commonly presents as an undesirable "double chin."

        KYTHERA was originally incorporated in Delaware in June 2004 under the name Dermion, Inc. It commenced operations in August 2005 and its name was changed to AESTHERx, Inc. In July 2006, the Company changed its name to KYTHERA Biopharmaceuticals, Inc.

        Since commencement of operations in August 2005, the Company has devoted substantially all its efforts to the development of ATX-101, recruiting personnel and raising capital. In 2010, the Company entered into a License Agreement with Bayer Consumer Care AG and a Services, Research, Development and Collaboration Agreement with Bayer's Affiliate, Intendis GmbH, collectively referred to as the collaboration arrangement with Bayer. Bayer Consumer Care AG and Intendis GmbH are referred to jointly as Bayer.

        The accompanying financial statements for the years ended December 31, 2012, 2011, and 2010 have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the foreseeable future. Since inception in 2004, the Company has not been profitable and has incurred operating losses in each year. The Company has a limited operating history upon which you can evaluate its business and prospects. The Company has not generated any revenue from product sales to date and will continue to incur significant research and development and other expenses related to its ongoing operations. The Company has recorded net losses of $36,799,000, $11,152,000 and $16,031,000 for the years ended December 31, 2012, 2011 and 2010, respectively, and had an accumulated deficit of $120,306,000, and $83,507,000 as of December 31, 2012 and 2011, respectively. The Company has funded its operations primarily through the sale and issuance of common and preferred stock, convertible debt, and amounts received pursuant to the collaboration arrangement with Bayer. Net working capital at December 31, 2012 and 2011, was $71,367,000 and $27,964,000, respectively. The Company expects to continue to incur losses for the foreseeable future. At December 31, 2012, the Company had capital resources consisting of cash and cash equivalents and restricted cash of $95,289,000, of which $15,978,000 was restricted. The Company also has access to borrow up to $10,000,000 through its credit facility (see further discussion in Note 12, "Subsequent Events").

        On September 11, 2012, the Board of Directors approved a 1-for-2.6443 reverse stock split of the Company's capital stock. All share and per share information included in the accompanying financial statements has been adjusted to reflect this reverse stock split.

        On October 16, 2012, the Company completed its initial public offering ("IPO") of 5,060,000 shares of common stock, which includes the exercise in full by the underwriters of their option to purchase up to 660,000 additional shares of common stock, at an offering price of $16.00 per share. The Company received net proceeds of approximately $72,479,000, after deducting underwriting discounts, commissions and offering related transaction costs. In connection with the IPO, the

F-7

KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

1. Organization and Basis of Presentation (Continued)

Company's outstanding shares of redeemable convertible preferred stock were automatically converted into 11,545,000 shares of common stock and warrants exercisable for redeemable convertible preferred stock were automatically converted into warrants exercisable for 365,000 shares of common stock, resulting in the reclassification of the related redeemable convertible preferred stock warrant liability of $3,101,000 to additional paid-in capital.

        In connection with the completion of its IPO, on October 16, 2012, the Company filed an amended and restated certificate of incorporation and bylaws, which, among other things, changed the number of authorized shares of common stock to 300,000,000 shares and preferred stock to 5,000,000 shares.

2. Summary of Significant Accounting Policies

Basis of Presentation

        The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP.

Reclassifications

        Certain prior year amounts have been reclassified to conform to the current year presentation.

Restatement

        The Company has determined that restatements are required to previously reported basic and diluted net income (loss) per share for all periods prior to and including the period ended December 31, 2012 due to an error in the computation. Basic and diluted net income (loss) per share is calculated by dividing net income (loss) for the period by the basic and diluted weighted average number of shares outstanding during that period. In the restated periods, preferred shares issued prior to the Company's initial public offering in October 2012 were inappropriately included in the weighted average shares outstanding used to calculate basic and diluted net income (loss) per share from their date of issuance, rather than from the date of actual conversion to common shares as a result of the Company's initial public offering. The effects of the assumed conversion of the preferred shares should have only been included in the diluted net income per share prior to actual conversion to the extent that the impact would have been dilutive.

        A summary of the impact of the correction of the errors on the net loss per share, basic and diluted, is as follows:

	Year Ended December 31, 2012			Year Ended December 31, 2011			Year Ended December 31, 2010
Net loss per share, basic and diluted—originally reported	$	(2.62	)	$	(1.00	)	$	(1.57	)
Difference in net loss per share, basic and diluted		(4.85	)		(6.98	)		(10.07	)
Net loss per share, basic and diluted—restated	$	(7.47	)	$	(7.98	)	$	(11.64	)

F-8

KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

Reconciliation of net loss per share, basic and diluted	Year Ended December 31, 2012			Year Ended December 31, 2011			Year Ended December 31, 2010
Numerator
Net loss	$	(36,799,000	)	$	(11,152,000	)	$	(16,031,000	)
Denominator
Weighted-average shares, basic and diluted—originally reported		14,058,000			11,139,000			10,193,000
Remove previously reported effect:
Redeemable convertible preferred stock (incorrectly included from issuance)		(9,134,000	)		(9,741,000	)		(8,816,000	)
Weighted average shares, basic and diluted—restated(1)		4,924,000			1,398,000			1,377,000
Net loss per share, basic and diluted—restated	$	(7.47	)	$	(7.98	)	$	(11.64	)

(1)

Since the numerator was a loss for each of the periods presented, the dilutive effects of stock options, warrants and redeemable convertible preferred stock were not included in the calculation of diluted net loss per share as the effect was anti-dilutive.

        The corrections have no impact on the Company's balance sheets, net loss, or the statements of cash flows or stockholders' equity (deficit) for any of the above mentioned periods.

Use of Estimates

        The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could materially differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including: expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. This process may result in actual results differing materially from those estimated amounts used in the preparation of the financial statements.

Segment Reporting

        Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. To date, the Company has viewed its operations and manages its business as one segment operating primarily in the United States.

F-9

KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

Cash, Cash Equivalents and Marketable Securities

        The Company considers all highly liquid securities with original final maturities of three months or less from the date of purchase to be cash equivalents. As of December 31, 2012 and 2011, cash and cash equivalents are comprised of funds in cash and money market accounts. From time to time, the Company maintains cash balances in excess of amounts insured by the Federal Deposit Insurance Corporation, or FDIC. The accounts are monitored by management to mitigate the risk.

        From time to time, the Company invests in marketable securities, which are classified as available-for-sale securities and are stated at fair value. Any unrealized gain or loss on the investments is reported as a component of other comprehensive income (loss) within the statement of operations and comprehensive loss. Realized gains and losses and declines in value, if any, judged to be other-than-temporary on available-for-sale securities are reported in interest income or expense, net. When securities are sold, any associated unrealized gain or loss previously reported as other comprehensive income (loss) is reclassified out of other comprehensive income (loss) and recorded in net income (loss) on the statement of operations and comprehensive loss in the period sold. Accrued interest and dividends are included in interest income. The Company periodically reviews available-for-sale securities for other-than temporary declines in fair value below the cost basis, and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

        As of December 31, 2012 and 2011, the Company did not have any marketable securities. There were no realized gains or losses from the sale of marketable securities for the years ended December 31, 2012 and 2011. The Company recognized $1,000 of realized gains from the sale of marketable securities for the year ended December 31, 2010.

Restricted Cash

        Restricted cash of $15,978,000 and $7,403,000 at December 31, 2012 and 2011, respectively, represents restricted cash received through the collaboration arrangement with Bayer that will be used to fund certain further global development activities of ATX-101 (see Note 7, "Commitments, Collaborations and Contingencies").

        Payments the Company received to fund collaboration efforts under the terms of the collaboration agreement with Bayer were recorded as restricted cash and deferred development funds, and are recognized as an offset to development expenses as the restricted cash is utilized to fund such development activities.

F-10

KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

Property and Equipment

        Property and equipment are recorded at historical cost and consisted of the following:

	December 31,
	2012			2011
Cameras	$	923,000		$	923,000
Computer hardware and electronics		147,000			90,000
Furniture and fixtures		227,000			103,000
Software		21,000			12,000
		1,318,000			1,128,000
Less accumulated depreciation		(1,043,000	)		(408,000	)
	$	275,000		$	720,000

        Depreciation is recorded using the straight-line method over the estimated useful lives of the assets (one to five years). The Company reviews its property and equipment assets for impairment in value whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company disposed of $54,000 and $34,000 of computer hardware and electronics for the years ended December 31, 2011 and 2010, with a recognized loss at disposal of $4,000 for the year end December 31, 2011. No disposals were made during the year ended December 31, 2012 and no loss on disposal was recognized during the years ended December 31, 2012 and 2010.

Concentration of Credit Risk

        Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of cash and cash equivalents and marketable securities. The primary objectives for the Company's investment portfolio are the preservation of capital and the maintenance of liquidity.

        The Company's investment policy limits investments to certain types of instruments such as certificates of deposit, money market instruments, and obligations issued by U.S. government and U.S. government agencies, and places restrictions on maturities and concentration by type and issuer. From time to time, the Company maintains cash balances in excess of amounts insured by the FDIC. The accounts are monitored by management to mitigate the risk.

Stock-Based Compensation

        The Company accounts for all stock-based payments issued to employees and directors using an option pricing model for estimating fair value. Accordingly, stock-based compensation expense is measured based on the estimated fair value of the awards on the date of grant, net of forfeitures. Compensation expense is recognized for the portion that is ultimately expected to vest over the period during which the recipient renders the required services to the Company using the straight-line single option method.

        In accordance with authoritative guidance, the fair value of non-employee stock based awards is re-measured as the awards vest, and the resulting increase in fair value, if any, is recognized as expense in the period the related services are rendered.

F-11

KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

Redeemable Convertible Preferred Stock Warrants

        Prior to the Company's IPO, freestanding warrants that related to the purchase of redeemable convertible preferred stock were classified as liabilities and recorded at fair value regardless of the timing of the redemption feature or the redemption price or the likelihood of redemption. The warrants were subject to re-measurement at each balance sheet date and any change in fair value was recognized as a component of warrant and other interest (expense) income, net. Pursuant to the terms of these warrants, upon the conversion of the class of preferred stock underlying the warrant, the warrants automatically became exercisable for shares of the Company's common stock based upon the conversion ratio of the underlying class of preferred stock. The consummation of the Company's IPO resulted in the conversion of all classes of the Company's preferred stock into common stock. Upon such conversion of the underlying classes of preferred stock, the warrants were reclassified as a component of equity and were no longer subject to re-measurement.

Fair Value of Financial Instruments

        The carrying amounts reported in the accompanying financial statements for cash and cash equivalents, accounts payable and accrued liabilities approximate their fair value because of the short-term nature of these accounts. Based on the borrowing rates currently available to the Company for debt with similar terms and consideration of default and credit risk, the carrying value of the notes payable approximates their fair value. The fair value of the warrant liability is discussed in Note 8, "Fair Value Measurements."

Revenue Recognition

        The Company recognizes revenue when all of the following four criteria are present: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the fee is fixed or determinable; and collectability is reasonably assured.

        For arrangements that involve the delivery of more than one element, each product, service and/or right to use assets is evaluated to determine whether it qualifies as a separate unit of accounting. This determination is based on whether the deliverable has "stand-alone value" to the customer. The consideration that is fixed or determinable is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. The estimated selling price of each deliverable is determined using the following hierarchy of values: (i) vendor-specific objective evidence of fair value, (ii) third-party evidence of selling price (TPE) and (iii) best estimate of selling price (BESP). The BESP reflects our best estimate of what the selling price would be if the deliverable was regularly sold by us on a stand-alone basis. In most cases we expect to use TPE or BESP for allocating consideration to each deliverable. The consideration allocated to each unit of accounting is recognized as the related goods or services are delivered, limited to the consideration that is not contingent upon future deliverables. Analyzing the arrangement to identify deliverables requires the use of judgment, and each deliverable may be an obligation to deliver services, a right or license to use an asset, or another performance obligation.

        The Company's revenue is related to the license agreement with Bayer executed in 2010. This agreement provides for various types of payments, including non-refundable upfront license fees, milestone payments, and future royalties on Bayer's net product sales of ATX-101.

F-12

KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

        The Company received a non-refundable upfront license payment of approximately $21,319,000 from Bayer upon execution of the license agreement. The terms of the collaboration arrangement with Bayer include continuing performance obligations and development and clinical manufacturing supply obligations that were conditions to Bayer's decision to pursue continued development and regulatory approval for ATX-101. Due to these ongoing performance obligations, the Company determined that the license did not have stand-alone value. The Company also did not have objective and reliable evidence of the fair value of these undelivered obligations. Accordingly, amounts received upfront under the license agreement were recorded as deferred revenue and were recognized on a straight-line basis over the expected period of substantial involvement in these collaboration activities, which were completed as of May 31, 2012. The period over which these activities were to be performed was based upon management's estimate of the period to complete the development activities required to be conducted relative to the upfront license fee and development funds received from Bayer. Current deferred revenue represents amounts, which are expected to be recognized within one year.

        The Company recognizes revenue from milestone payments when earned, provided that (i) the milestone event is substantive in that it can only be achieved based in whole or in part on either the entity's performance or on the occurrence of a specific outcome resulting from the entity's performance and its achievability was not reasonably assured at the inception of the collaboration arrangement and (ii) the Company does not have ongoing performance obligations related to the achievement of the milestone earned and (iii) it would result in additional payments being due to the Company. Milestone payments are considered substantive if all of the following conditions are met: the milestone payment is non-refundable; achievement of the milestone was not reasonably assured at the inception of the arrangement; substantive effort is involved to achieve the milestone; and the amount of the milestone appears reasonable in relation to the effort expended, the other milestones in the arrangement and the related risk associated with the achievement of the milestone. Any amounts received under the collaboration arrangement in advance of performance, if deemed substantive, are recorded as deferred revenue and recognized as revenue as the Company completes its performance obligations.

Research and Development Costs

        Major components of research and development (R&D) costs include cash compensation, stock-based compensation, pre-clinical studies, clinical trial and related clinical manufacturing, materials and supplies, and fees paid to consultants and other entities that conduct certain research and development activities on the Company's behalf. R&D costs, including upfront fees and milestones paid to collaborators, are expensed as goods are received or services rendered. Costs to acquire technologies to be used in research and development that have not reached technological feasibility and have no alternative future use are also expensed as incurred. Costs incurred in connection with clinical trial activities for which the underlying nature of the activities themselves do not directly relate to active research and development, such as costs incurred for market research and focus groups linked to clinical strategy as well as costs to build the Company's brand, are not included in R&D costs but are reflected as general and administrative expenses.

        The Company enters into agreements with various research institutions, contract laboratories, contract manufacturers and consultants. These agreements are generally on a fee-for-service basis and are cancelable.

F-13

KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

Clinical Trial Accruals

        As part of the process of preparing its financial statements, the Company is required to estimate its expenses resulting from its obligations under contracts with vendors and consultants and clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided to us under such contracts. The Company's objective is to reflect the appropriate trial expenses in its financial statements by matching those expenses with the period in which services and efforts are expended. The Company accounts for these expenses according to the progress of the trial as measured by patient progression and the timing of various aspects of the trial. The Company determines accrual estimates through financial models taking into account discussion with applicable personnel and outside service providers as to the progress or state of consummation of trials, or the services completed. During the course of a clinical trial, the Company adjusts its rate of clinical expense recognition if actual results differ from its estimates. The Company makes estimates of its accrued expenses as of each balance sheet date in its financial statements based on the facts and circumstances known to us at that time. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in us reporting amounts that are too high or too low for any particular period. Through December 31, 2012, there have been no material adjustments to the Company's prior period estimates of accrued expenses for clinical trials. The Company's clinical trial accrual is dependent upon the timely and accurate reporting of contract research organizations and other third-party vendors.

Other Income

        Other income represents amounts received under the Qualified Therapeutic Discovery Credit Programs included in healthcare reform legislation enacted in March 2010. This program established a one-time pool of $1 billion for grants to small biotech companies developing novel therapeutics which met certain requirements. Under this program, the Company received a non-recurring grant in 2010, which totaled $930,000, related to four research and development projects. As the grant amount related entirely to expenses that had been previously incurred for research and development activities, the Company recognized the full amount of the grant as other income at the time it was entitled to such grants.

Basic and Dilutive Net Loss Per Common Share

        Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period, excluding the dilutive effects of converting redeemable preferred stock, warrants to purchase redeemable convertible preferred stock and options. Diluted net loss per common share is computed by dividing the net loss by the sum of the weighted-average number of common shares outstanding during the period plus the potential dilutive effects of redeemable convertible preferred stock and warrants to purchase redeemable convertible preferred stock, and options outstanding during the period calculated in accordance with the treasury stock method, but are excluded if their effect is anti-dilutive. Because the impact of these items is anti-dilutive during periods of net loss, there was no difference between basic and diluted loss per common share at December 31, 2012, 2011 and 2010.

F-14

KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

        The calculation of weighted-average diluted shares outstanding excludes the dilutive effect of converting redeemable convertible preferred stock, warrants to purchase redeemable convertible preferred stock and options to purchase common stock, as the impact of such items are anti-dilutive during periods of net loss. Shares excluded from the calculation were 1,956,000, 13,334,000 (restated) and 10,481,000 (restated) for the years ended December 31, 2012, 2011 and 2010, respectively.

Income Taxes

        The Company accounts for income taxes under the asset and liability method, which requires, among other things, that deferred income taxes be provided for temporary differences between the tax bases of the Company's assets and liabilities and their financial statement reported amounts. A valuation allowance is recorded when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Management has considered estimated future taxable income and ongoing prudent and feasible tax planning strategies in assessing the amount of the valuation allowance. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made.

        Additionally, the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized upon settlement. Accordingly, the Company establishes reserves for uncertain tax positions.

Comprehensive Loss

        Comprehensive loss is comprised of net loss and other comprehensive income or loss. The only component of other comprehensive income or loss is unrealized gains and losses on marketable securities. Comprehensive gains and losses have been reflected in the statements of operations and comprehensive loss and stockholders' equity (deficit) for all periods presented.

Collaboration Arrangements

        A collaboration arrangement is defined as a contractual arrangement that has or may have significant financial milestones associated with success-based development, which include certain arrangements the Company has entered into regarding the research and development, manufacture and/or commercialization of products and product candidates. These collaborations generally provide for non-refundable, upfront license fees, research and development and commercial performance milestone payments, cost sharing and royalty payments. The collaboration agreements with third parties are performed on a "best efforts" basis with no guarantee of either technological or commercial success. The Company evaluates whether an arrangement is a collaboration arrangement at its inception based on the facts and circumstances specific to the arrangement. The Company reevaluates whether an arrangement qualifies or continues to qualify as a collaboration arrangement whenever there is a change in the anticipated or actual ultimate commercial success of the endeavor. See Note 7, "Commitments, Collaborations and Contingencies."

F-15

KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

Recent Accounting Pronouncements

        In June 2011, a new accounting standard was issued that changed the disclosure requirements for the presentation of other comprehensive income, or OCI, in the financial statements, including the elimination of the option to present OCI in the statement of stockholders' equity (deficit). OCI and its components will be required to be presented for both interim and annual periods either in a single financial statement, the statement of comprehensive income, or in two separate but consecutive financial statements, consisting of a statement of income followed by a separate statement presenting OCI. This standard is required to be applied retrospectively for interim and annual periods beginning after December 15, 2011. This standard was adopted as of January 1, 2012 and the retrospective application of this standard did not have a material impact on the Company's financial statements.

        In February 2013, a new accounting standard was issued that requires increased disclosure requirements regarding amounts that are reclassified out of accumulated other comprehensive income. The standard is required to be adopted prospectively beginning on January 1, 2013. Adoption of this standard is not expected to have a material impact on the Company's financial statements.

        In May 2011, the FASB issued a GAAP update on fair value measurement, which eliminates certain differences between U.S. GAAP and International Financial Reporting Standards (IFRS), resulting in a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between GAAP and IFRS. It also expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. This revised standard was adopted effective on January 1, 2012. Adoption of this standard did not have a material effect on the Company's financial position, results of operations or cash flows.

3. Bridge Financing

        In January 2006, the Company entered into bridge financing transactions by issuing convertible promissory notes and warrants, for aggregate proceeds of $8,051,000 from certain existing and new investors. The convertible notes bore interest at 8% and were automatically convertible into shares of the Company's preferred stock upon the occurrence of a qualified preferred stock financing as described in the convertible promissory note agreement. The estimated fair value of the warrants, totaling approximately $440,000, was treated as a deduction from the note proceeds (debt discount) and amortized as interest expense over the period the notes were outstanding. The warrants entitled the note holders to obtain a certain number of preferred shares, based on a specific formula outlined in the agreement, at the issuance price of the qualified preferred stock financing. When the Company completed its Series B redeemable convertible preferred stock ("Series B Preferred") financing in May 2006, the aggregate principal and interest outstanding on the convertible notes of $8,247,000 was converted into approximately 1,084,000 shares of Series B Preferred at the issuance price of $7.6055 per share. In addition, the number and the exercise price of the warrants issued in connection with the bridge financing was established at the time of the issuance of the Series B Preferred, resulting in warrants exercisable for approximately 243,000 shares of Series B Preferred at an exercise price of $7.6055 per share. The Company classified the warrants as a liability and re-measured the liability to estimated fair value at December 31, 2011 and 2010 using the Black-Scholes option pricing model under the following assumptions: contractual life according to the remaining terms of the warrants, no dividend yield, risk-free interest rate of 0.13% and 0.63% and volatility of 72% and 75% at December 31, 2011 and 2010, respectively.

F-16

KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

3. Bridge Financing (Continued)

        The increase in the fair value of the warrants from issuance through IPO in October of 2012, totaled $1,205,000 and has been recorded in warrant and other interest income (expense), net, and included $349,000 of interest expense, $265,000 of interest expense and $570,000 of interest income, in the statements of operations and comprehensive loss for the years ended December 31, 2012, 2011 and 2010, respectively. Upon IPO in October of 2012, the warrants for convertible preferred stock became warrants for common stock and were reclassified to equity. All but 178 warrants were exercised during 2012, with the remaining warrants being exercised in January 2013, resulting in the net issuance of 153,000 shares of common stock.

4. Note Payable

        On March 21, 2011, the Company executed a debt financing agreement whereby the Company had access to borrow up to $15,000,000 of senior loan financing through January 1, 2012. On December 30, 2011, the Company amended its credit facility to provide for an extension of its drawdown period through December 1, 2012, provided that it had drawn down at least $5,000,000 as of August 1, 2012. On July 23, 2012, the Company obtained an additional 60 day extension of the initial drawdown date from August 1, 2012 to October 1, 2012. For each draw, the Company shall make six months of interest only payments at a fixed rate of 11.5% followed by 30 months of interest and principal payments at a fixed rate of 8.5% and a final payment of 6% of the amount drawn. As of December 31, 2011, no amounts had been drawn. The debt is secured by all the Company's assets, except for the Company's intellectual property, which is subject to a negative pledge agreement.

        On October 1, 2012 the Company drew $5,000,000 and, in November 2012, obtained an extension allowing for the draw of the remaining $10,000,000 in $5,000,000 increments by January 31, 2013 and February 28, 2013 (see further discussion in Note 12, "Subsequent Events").

        Upon entry into the agreement, the Company issued warrants to purchase 34,000 shares of Series C redeemable convertible preferred stock ("Series C Preferred") at an exercise price of $13.3530. The estimated fair value of the warrants at issuance of approximately $345,000 was recorded as a deferred financing cost offsetting the note payable liability and is being amortized to warrant and other interest income (expense), net, over the expected term of the loan.

        Upon extension of the credit facility in July 2012, the Company issued a warrant to purchase up to an additional 86,000 shares of its Series D redeemable convertible preferred stock ("Series D Preferred") at an exercise price of $13.9040. The estimated fair value of the warrant at issuance of approximately $1,074,000 was recorded as a deferred financing cost offsetting the note payable liability and is being amortized to warrant and other interest income (expense), net over the expected term of the loan.

        Upon issuance, the Company classified the warrants to purchase convertible preferred stock as a liability and re-measured the liability to estimated fair value using the Black-Scholes option pricing model. Assumptions used to revalue the Series C Preferred warrants at December 31, 2011 were as follows: contractual life according to the remaining terms of the warrants, no dividend yield, risk-free interest rate of 1.75% and volatility of 80%. Assumptions used to revalue the Series D Preferred warrants at December 31, 2011 were as follows: contractual life according to the remaining terms of the warrants, no dividend yield, risk-free interest rate of 1.89% and volatility of 81%. Upon IPO in October of 2012, the warrants to purchase convertible preferred stock were converted to warrants to

F-17

KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

4. Note Payable (Continued)

purchase common stock. Upon this conversion, the warrants ceased to be remeasured and the warrant liability was reclassified to equity.

        The increase in the fair value of the Series C Preferred warrants from issuance in March 2011 through IPO in October of 2012, totaled $55,000 and has been recorded in warrant and other interest income (expense), net, in the statements of operations and comprehensive loss, and included interest expense of $91,000 and interest income of $36,000 for the years ended December 31, 2012 and 2011, respectively. The decrease in value of the Series D Preferred warrants from issuance in December 2011 through IPO in October of 2012 totaled $18,000 and has been recorded in warrant and other interest income (expense), net, in the statement of operations and comprehensive loss for the year ended December 31, 2012. There was no change in the fair value of the Series D Preferred warrants during the year ended December 31, 2011 due to the timing of issuance.

        In December of 2012, the warrants to purchase 120,000 shares of common stock were net exercised on a cashless basis for 49,000 shares of common stock. There were no warrants outstanding as of December 31, 2012.

        Included in warrant and other interest income (expense), net for the year ended December 31, 2012 was amortization of debt issuance costs of $272,000 and interest expense related to the note payable of $169,000. The balance of accrued interest expense at December 31, 2012 was $22,000. The remaining unamortized debt issuance cost at December 31, 2012 was $1,076,000.

        The credit facility includes various covenants. As of December 31, 2011 and 2012, we were in compliance with all covenants associated with the credit facility.

        Future maturities of the Note payable as of December 31, 2012 are as follows:

2013	$	1,500,000
2014		2,000,000
2015		1,500,000
		5,000,000
Unamortized debt issuance cost		(1,076,000	)
		3,924,000
Current portion		(1,160,000	)
Note payable—net of current portion	$	2,764,000

5. Redeemable Convertible Preferred Stock

        In August 2005, the Company issued 1,711,000 shares of its Series A redeemable convertible preferred stock ("Series A Preferred") at a price of $0.53 per share, for aggregate gross proceeds of $905,000. In addition, the Company issued an aggregate of 95,000 shares of Series A Preferred to service providers valued at $0.53 per share for services rendered.

        In May 2006, the Company issued 3,944,000 shares of its Series B Preferred at a price of $7.6055 per share, for aggregate gross proceeds of $30,000,000 (including the conversion of the convertible promissory notes issued in January 2006). In addition, the Company issued an aggregate of approximately 37,000 shares of its Series B Preferred to Los Angeles Biomedical Research Institute

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KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

5. Redeemable Convertible Preferred Stock (Continued)

pursuant to a license agreement which required the Company to issue shares of its capital stock with a value at issuance of $280,000. The Company recognized the $280,000 as research and development expense in 2005.

        In May 2008, the Company issued 2,247,000 shares of Series C Preferred at a price of $13.3530 per share, for aggregate gross proceeds of $30,000,000.

        The Series C Preferred financing also provided for an additional $10,000,000 investment (Additional Investment) from the investors in the Series C Preferred financing, where upon approval of not less than 75% of the members of the board of directors, the Company had the right to request the Series C investors to purchase, on a pro-rata basis, $10,000,000 of Series C Preferred at the Series C price of $13.3530 per share. In the event a Series C investor elected not to participate in the Additional Investment, the Company was permitted to issue and sell such investor's pro rata portion of the Additional Investment to other investors approved by the board of directors.

        On January 30, 2009, the Series C investors agreed to participate in the Additional Investment. The financing closed on July 1, 2009 and the Company issued 749,000 shares of its Series C Preferred for $10,000,000 in aggregate gross proceeds. In November 2010, the Company issued an additional 27,000 shares of its Series C Preferred valued at $13.3530 per share in exchange for services. On January 25, 2011, the board of directors approved an increase in the authorized number of Series C Preferred shares, increasing the number of authorized shares to 8,300,000.

        In August 2011, the Company issued 2,692,000 shares of its Series D Preferred at a price of $13.9040 per share, for aggregate gross proceeds of $37,425,000.

        Upon IPO in October of 2012, all shares of convertible preferred stock converted into 11,545,000 shares of common stock. The Series A Preferred, Series C Preferred and Series D Preferred was converted into common stock on a 1-for-1 basis. The Series B Preferred was converted into shares of common stock on a 1-for-1.00785 basis.

Dividends

        The holders of the Preferred Stock were entitled to receive dividends, when and if declared by the board of directors, at the rate of $0.042, $0.608, $1.068 and $1.113 per share per annum, on each outstanding share of Series A Preferred, Series B Preferred, Series C Preferred and Series D Preferred, respectively. No dividends had been declared through the date of conversion.

6. Stockholders' Equity

Restricted Common Stock

        In August 2005, the Company issued approximately 1,311,000 shares of its restricted common stock to its founders. The Company had a right to repurchase any unvested shares at a price of $0.0264 upon termination over the vesting period of the shares. In 2011, the Company repurchased approximately 7,000 unvested shares. There were no repurchases or transfers of shares in 2012 or 2010. As of December 31, 2011, all outstanding founders' shares were fully vested. The Company accounted for this issuance using an option pricing model to estimate the fair value of the stock and recognized the fair value of the stock at issuance over the vesting period. No stock compensation expense was recognized

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KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

6. Stockholders' Equity (Continued)

during the years ended December 31, 2012 and 2011. The Company recognized $16,000 in compensation expense during the year ended December 31, 2010.

Shares Reserved for Future Issuance

        Shares of the Company's common stock reserved for future issuance are as follows:

	December 31, 2012
Common stock options outstanding		1,956,000
Common stock options available for grant		438,000
Total common shares reserved for future issuance		2,394,000

Stock Options

        In January 2010, the board of directors approved the Amended and Restated 2004 Stock Plan ("the Plan"), which provides for the granting of incentive and nonstatutory stock options and restricted stock to its employees, directors, and consultants at the discretion of the board of directors. As of December 31, 2012, 2011 and 2010, a total of 2,491,000, 2,113,000 and 1,652,000 shares, respectively, were authorized for grant under the Plan.

        Stock options may be granted with exercise prices not less than the estimated fair value of the Company's common stock. Incentive stock options granted to individuals owning more than 10% of the total combined voting power of all classes of stock are exercisable up to five years from the date of grant. The Plan provides that the exercise price of any incentive stock option granted to a 10% stockholder cannot be less than 110% of the estimated fair value of the common stock on the date of grant. Except as set forth above, options granted under the Plan expire no later than ten years from the date of grant. Options granted to employees under the Plan vest over periods determined by the board of directors, generally over period of one to four years. Additionally, the Company has granted certain performance-based stock option awards that vest based on the achievement of certain predetermined milestones. Prior to our IPO, the board of directors determined the estimated fair value of its common stock based on assistance from an independent third-party valuation. Since our IPO, the fair value of our common stock is the closing share price. The fair value of the Company's common stock was determined to be $30.34, $8.22 and $5.90 at December 31, 2012, 2011 and 2010, respectively.

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KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

6. Stockholders' Equity (Continued)

        A summary of stock option activity for the years ended December 31, 2012, 2011, and 2010 is as follows:

	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Weighted- Average Intrinsic Value
Outstanding at December 31, 2009		1,004,000		$	2.62		8.10
Granted		430,000			5.81
Exercised		(26,000	)		2.25			$	3.49
Forfeited		(14,000	)		3.31
Outstanding at December 31, 2010		1,394,000		$	3.60		7.61
Granted		78,000			7.26		9.59
Exercised		(12,000	)		1.48			$	5.13
Forfeited		(25,000	)		5.18
Outstanding at December 31, 2011		1,435,000		$	3.78		6.76
Granted		652,000			10.19		9.28
Exercised		(51,000	)		2.40			$	7.56
Forfeited		(80,000	)		6.31
Outstanding at December 31, 2012		1,956,000		$	5.86		6.87
Vested or expected to vest at December 31, 2012		1,930,000		$	5.79
Exercisable at December 31, 2012		1,128,000		$	3.38

        At December 31, 2012, the aggregate intrinsic value of options outstanding and exercisable was $47,887,000 and $30,401,000, respectively.

        The Company estimates the fair value of its share-based awards to employees and directors using the Black-Scholes option pricing model. The Black-Scholes model requires the input of highly complex and subjective assumptions, including (a) the expected stock price volatility, (b) the calculation of expected term of the award, (c) the risk free interest rate and (d) expected dividends. Due to the Company's limited operating history and a lack of company specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. When selecting these public companies on which it has based its expected stock price volatility, the Company selected companies with comparable characteristics to it, including enterprise value, risk profiles, position within the industry, and with historical share price information sufficient to meet the expected life of the stock-based awards. The historical volatility data was computed using the daily closing prices for the selected companies' shares during the equivalent period of the calculated expected term of the stock-based awards. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. The Company has estimated the expected life of its employee stock options using the "simplified" method, whereby, the expected life equals the arithmetic average of the vesting term and the original contractual term of the option due to its lack of sufficient historical data. The risk-free interest rates for periods within the expected life of the option are based on the U.S. Treasury yield curve in effect during the period the options were granted. The Company has never paid, and does not expect to pay dividends in the foreseeable future.

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KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

6. Stockholders' Equity (Continued)

        The weighted-average assumptions used to estimate the fair value of stock options using the Black-Scholes option pricing model were as follows:

	Year Ended December 31,
	2012			2011			2010
Weighted-average exercise price of options granted	$	10.19		$	7.26		$	5.81
Expected volatility		75	%		77	%		77	%
Expected term (in years)		6.1			5.8			5.9
Weighted-average risk free interest rate		1.05	%		1.55	%		1.82	%
Expected dividends		0	%		0	%		0	%

        The Company is also required to estimate forfeitures at the time of grant, and revise those estimates in subsequent periods if actual forfeitures differ from its estimates. The Company uses historical data to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that are expected to vest. To the extent that actual forfeitures differ from the Company's estimates, the difference is recorded as a cumulative adjustment in the period the estimates were revised. For the years ended December 31, 2012 and 2011, the Company applied a forfeiture rate based on the Company's historical forfeitures. No forfeiture rate was applied prior to January 1, 2011 as forfeitures prior to such date had been insignificant.

        Total compensation cost recorded in the statements of operations and comprehensive loss, which includes stock-based compensation expense, restricted shares issued to founders subject to vesting and the value of stock and options issued to nonemployees for services are allocated as follows:

	Year Ended December 31,
	2012		2011		2010
Research and development	$	904,000	$	451,000	$	510,000
General and administrative		2,525,000		407,000		527,000
	$	3,429,000	$	858,000	$	1,037,000

        As of December 31, 2012, there was $4,060,000 of unrecognized compensation expense related to unvested employee stock option agreements, which is expected to be recognized over a weighted-average period of approximately 2.51 years. For stock option awards subject to graded vesting, the Company recognizes compensation cost on a straight-line basis over the service period for the entire award.

        The Company continues to account for stock options issued to nonemployees using a fair value approach. The compensation costs of these arrangements are subject to re-measurement over the vesting terms as earned.

        During the years ended December 31, 2012, 2011 and 2010, the Company granted nonemployees options to purchase approximately 16,000, 19,000 and 2,000 shares of its common stock, respectively, at exercise prices ranging from $25.88 to $5.50 per share. Compensation expense related to nonemployee option grants of $250,000, $50,000 and $35,000 were recorded for the years ended December 31, 2012, 2011 and 2010, respectively.

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KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

6. Stockholders' Equity (Continued)

        The fair value of nonemployee options in the years ended December 31, 2012, 2011 and 2010 was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions: no dividend yield, volatility of 73%, 76% and 78%, maximum contractual life of ten years, and a risk-free interest rate of 0.67%, 1.38% and 2.01%.

7. Commitments, Collaborations and Contingencies

Commitments

        The Company leases its facilities and certain equipment under operating leases.

        In 2011, the Company renegotiated its facility lease through December 31, 2013. The renegotiated lease commenced in June 2011. Additionally, in May 2012, the Company leased additional space at the same facility through April 30, 2014. The future minimum rental payments under the new lease are included in the future minimum rental payments below. The lease is subject to fixed rate escalation increases. As a result, the Company recognizes rent expense on a straight-line basis for the full amount of the commitment including the minimum rent increases over the life of the lease. Under the terms of the lease agreements, the Company expects to incur rent expense associated with its new office leases of $401,000 per year.

        Rent expense under the Company's operating leases for the years ended December 31, 2012, 2011 and 2010, was $379,000, $265,000 and $180,000, respectively.

        Future minimum lease payments are as follows at December 31, 2012:

	Operating Leases
Years ended December 31:
2013	$	410,000
2014		23,000
Thereafter		—
Total future minimum lease payments	$	433,000

Collaboration Arrangements

        From time to time, the Company enters into collaborative arrangements for its research and development and manufacturing activities. Each collaboration is unique in nature and the Company's significant agreements are discussed below.

Bayer

        In August 2010, the Company entered into a license agreement with Bayer Consumer Care AG that provides Bayer with an exclusive license to develop, manufacture and commercialize ATX-101 outside of the United States and Canada. In connection with the License Agreement the Company also entered into a related Services, Research, Development and Collaboration Agreement with Bayer's affiliate, Intendis GmbH. These agreements are referred to jointly as the collaboration arrangement with Bayer, and Bayer Consumer Care AG and Intendis GmbH are referred to jointly as Bayer. In connection with the entry into the collaboration arrangement, Bayer paid the Company an upfront

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KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

7. Commitments, Collaborations and Contingencies (Continued)

license fee of approximately $21,319,000 and approximately $22,247,000 for research and development to fund a portion of Bayer's European Phase III clinical trials. The Company is eligible to receive up to $297,000,000 for certain development, manufacturing, regulatory and commercialization contingent payments upon the achievement by Bayer of specified events under our collaborative arrangement, as well as escalating royalties from the mid- to high-teens on Bayer's net product sales of ATX-101. The first of these contingent event-based payments of $15,800,000 was received on May 31, 2012, triggered by the completion of Bayer's European Phase III clinical trial for ATX-101, the receipt of two consecutive validated manufacturing lots and Bayer's subsequent decision to pursue continued development and seek regulatory approval of ATX-101. This amount was recorded as revenue upon receipt as all revenue recognition criteria had been met. At this time, Bayer also elected to pursue additional research and development activities related to ATX-101, which are distinct from the original development activities, and subsequently funded $17,400,000 for these additional Bayer development activities. This payment was recorded as restricted cash and deferred development funds and will be recognized as an offset to development expense as the restricted cash is utilized to fund Bayer's development activities. The contingent event-based payments the Company may receive from Bayer pursuant to its collaboration arrangement do not meet the definition of a milestone under applicable ASC guidance, as achievement of the triggering events for such payments is based on the performance of Bayer and not the Company. Therefore, the milestone method will not be applied to those payments.

        Bayer has the right to terminate the license agreement at any time upon advance notice of 180 days if Bayer determines that ATX-101 does not appear to be commercially viable or if there is a material change in circumstances that impacts the prospective profitability of ATX-101. The license agreement expires simultaneously with the expiration of royalties on a product-by-product/country-by-country basis, and expires in its entirety upon the expiration of royalties with respect to all products outside of the United States and Canada. Such royalties expire on the later of (i) the expiration of patent claims relating to ATX-101, (ii) the expiration of exclusivity extensions for ATX-101, or (iii) 15 years from the date of first commercial sale, each with respect to the relevant country. The royalty payments discussed above are subject to reduction in connection with, among other things, the entry into the market of certain products competitive to ATX-101. In the event a competitive product meeting certain qualifications is approved for sale and is actually and legally sold in a particular territory (in the case of the EU, any member country), the Company's royalties on Bayer's net sales of ATX-101 in that territory will be reduced from the mid- to high-teens to the low-single digits to low-teens depending upon the timing and territory of such competitive entry. Except with respect to the EU, the entry of a qualifying competitive product into one territory does not result in a reduction in the royalty payments applicable to Bayer's net sales in other territories. Similarly, our royalties on Bayer's net sales of ATX-101 would be reduced to the low- to mid-single digits, or eliminated entirely, in each country in which an approved generic is actually and legally sold in such country, depending on the timing and country of such generic entry. The license agreement may also be terminated by us upon Bayer commencing an action that challenges the validity of ATX-101-related patents or if Bayer ceases or abandons developing ATX-101 outside of the United States and Canada. The license agreement may also be terminated by either party in the event of a material breach by the other party.

        License fees of $21,319,000 were deferred and recognized on a straight-line basis over the period of substantial involvement in collaboration activities that were required to be conducted relative to the

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KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

7. Commitments, Collaborations and Contingencies (Continued)

upfront license fee and development funds received from Bayer. These activities were completed as of May 31, 2012.

        Amounts to fund collaboration efforts of $22,247,000 and $17,400,000 were recorded as restricted cash and deferred development funds and are recognized as an offset to research and development expenses as the restricted cash is utilized to fund development activities. Restricted cash and deferred development funds were presented as current and long-term on the balance sheet are based on the Company's estimate of amounts that will be spent to fund development activities within the next 12 months. Amounts recognized as offsets to research and development expense were $10,075,000, $14,615,000 and $1,039,000 for the years ended December 31, 2012, 2011and 2010, respectively.

Los Angeles Biomedical Research

        In August 2005, the Company entered into an exclusive license agreement with Los Angeles Biomedical Research Institute at Harbor/UCLA Medical Center, or LA Biomed, pursuant to which it obtained a worldwide exclusive license to practice, enforce and otherwise exploit certain patent rights related to the use of the active ingredient in ATX-101. The exclusive license requires the Company to pay LA Biomed a milestone payment of $500,000 upon receipt of marketing approval of ATX-101, as well as non-royalty sublicense fees equal to 10% of any sublicense income, up to a total of $5,000,000, 50% of which the Company may elect to satisfy through the issuance of capital stock. Additionally, upon commercialization of a licensed product or service, the Company is obligated to pay low- to mid- single digit royalties on net product sales of ATX-101 by it and Bayer. The Company may terminate this license without penalty upon 90 days' notice to LA Biomed and LA Biomed may terminate the license in certain circumstances if the Company fails to perform, or violates any term of the agreement, subject to applicable cure provisions. Subject to default by the Company or termination, the license remains in effect until the last patent or patent application in the licensed patent rights has expired or been revoked, invalidated or abandoned.

        In August 2010, due to the receipt of the upfront license fee from Bayer, the Company incurred non-royalty sublicense fees of $1,950,000, which was deferred and recognized as sublicense fee expense on a straight-line basis over the same period as the license income. During 2010, the Company made payments of cash and stock to LA Biomed totaling $390,000 related to the non-royalty sublicense fee incurred. The remainder of $1,560,000 was paid upon our IPO in 50% cash and 50% stock.

        Additionally, due to the receipt of the contingent event-based payment of $15,800,000 payable from Bayer on May 31, 2012, the Company incurred an additional non-royalty sublicense fee of $1,580,000 to LA Biomed, which was paid in 50% cash and 50% stock.

Supply Arrangements

Pfizer, Inc.

        The Company currently has an exclusive supply agreement with Pfizer, Inc., or Pfizer, as the single-source supplier of a key raw material for ATX-101. The agreement with Pfizer expires in December 2014. The agreement can also be terminated prior to expiration by either party (i) upon 60 days' written notice of an uncured material breach, (ii) upon 24 months' written notice, (ii) the bankruptcy or insolvency of the other party or (iv) by Pfizer if the Company abandons development of ATX-101. The Company is not required to purchase any minimum or specific quantities from Pfizer,

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KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

7. Commitments, Collaborations and Contingencies (Continued)

however, any purchase of the key starting material must be made from Pfizer. Payments are due to Pfizer 30 days after receipt of an invoice following shipment of the material.

Hospira, Inc.

        In November 2010, the Company entered into a long-term agreement with Hospira, Inc., or Hospira, as its drug product fill/finish supplier. The initial term of the agreement expires five years after the first day of the month after our first bona fide sale of ATX-101 to a non-affiliate customer after ATX-101 receives regulatory approval, and may be extended for additional and successive two year terms. The agreement may be terminated prior to expiration by either party upon 24 months' written notice. The agreement may also be terminated by either party upon 60 days' written notice of an uncured material breach, the bankruptcy or insolvency of the other party or upon notice that the other party is unable to perform for 180 days due to a force majeure. The Company is not required to purchase any minimum or specific quantities from Hospira; however, if ATX-101 is approved, Hospira has the right to be the Company's sole provider of drug product for a period of three year following commercialization, and, following the completion of the third year, the right to provide no less than seventy-five percent of the Company's total annual requirement of drug product. Payments are due to Hospira 30 days after receipt of an invoice or, with respect to certain pre-specified events, upon completion of such event.

Contingencies

        The Company may be subject to various litigation matters arising in the ordinary course of business from time to time. The Company is not subject to any currently pending legal matters or claims that would have a material adverse effect on its financial position, results of operations or cash flows.

8. Fair Value Measurements

        The Company applies various valuation approaches in determining the fair value of its financial assets and liabilities within a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is broken down into three levels based on the source of inputs as follows:

Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2—Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly.

Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

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KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

8. Fair Value Measurements (Continued)

        The availability of observable inputs can vary among the various types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level input that is significant to the overall fair value measurement.

        At December 31, 2012 and 2011, the Company had cash equivalents comprised of U.S. Treasury securities money market accounts whose value is based using quoted market prices with no adjustments applied. Accordingly, these securities are classified as Level 1. The Company had no assets or liabilities classified as Level 2. The warrants issued for redeemable convertible preferred stock are categorized as Level 3. The fair values of these instruments are determined using models based on market observable inputs and management judgment. See discussion of fair value calculation at Note 3, "Bridge Financing" and Note 4, "Note Payable." There were no material re-measurements to fair value during the years ended December 31, 2012, 2011 and 2010, of financial assets and liabilities that are not measured at fair value on a recurring basis.

        The following fair value hierarchy table presents information about each major category of the Company's financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2012 and 2011.

	Fair Value Measurement at December 31, 2012 using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of December 31, 2012
Assets:
Cash equivalents	$	71,316,000	$	—	$	—	$	71,316,000
Total	$	71,316,000	$	—	$	—	$	71,316,000
Liabilities:
Redeemable convertible preferred stock warrants	$	—	$	—	$	—	$	—
Total	$	—	$	—	$	—	$	—

F-27

KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

8. Fair Value Measurements (Continued)

	Fair Value Measurement at December 31, 2011 using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of December 31, 2011
Assets:
Cash equivalents	$	8,315,000	$	—	$	—	$	8,315,000
Total	$	8,315,000	$	—	$	—	$	8,315,000
Liabilities:
Redeemable convertible preferred stock warrants	$	—	$	—	$	2,145,000	$	2,145,000
Total	$	—	$	—	$	2,145,000	$	2,145,000

        The following table presents the Company's assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2012 and 2011:

	Assets		Liabilities
Balance at December 31, 2010	$	—	$	1,031,000
Settlements		—		—
Issuance of new warrants		—		885,000
Fair value increase included in interest income or expense, net				229,000
Balance at December 31, 2011	$		$	2,145,000
Settlements		—		—
Issuance of new warrants		—		534,000
Fair value increase included in interest income or expense, net		—		422,000
Reclassification of warrants		—		(3,101,000	)
Balance at December 31, 2012			$	—

        The fair values of cash equivalents, accounts payable and accrued liabilities approximate their carrying values due to the short-term nature of these accounts. Based on the borrowing rates currently available to the Company for debt with similar terms and consideration of default and credit risk, the carrying value of the notes payable approximates their fair value.

9. 401(k) Savings Plan

        In 2006, the Company sponsored a defined contribution savings plan under Section 401(k) of the Internal Revenue Code ("the 401(k) Plan"). The 401(k) Plan covers all employees who meet defined minimum age and service requirements, and allows participants to defer a portion of their annual compensation on a pretax basis. The Company contributes a percentage of its eligible employees' earnings. For the years ended December 31, 2012, 2011 and 2010, the total amounts included in expense for its contributions were $208,000, $156,000 and $154,000, respectively.

F-28

KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

10. Income Taxes

        There is no provision for income taxes because the Company has incurred operating losses since inception. At December 31, 2012, the Company has concluded that it is more likely than not that the Company may not realize the benefit of its deferred tax assets due to its history of losses. Accordingly, the net deferred tax assets have been fully reserved.

        The Company recorded deferred tax assets of approximately $49,447,000 and $34,534,000 as of December 31, 2012 and 2011, respectively, which have been fully offset by a valuation allowance due to uncertainties surrounding its ability to generate future taxable income to realize these assets. The deferred tax assets are primarily composed of federal and state tax net operating loss, or NOL, carryfowards, start-up expenditures and R&D credit carryforwards. As of December 31, 2012, the Company has federal NOL carryforwards of approximately $96,000,000, which will expire at various times through 2032. At December 31, 2012, the Company has federal and state tax credit carry-forwards of approximately $3,500,000 and $3,100,000 available to reduce future federal and state tax liability, respectively. The federal tax credits begin to expire in 2026. Under California law, California tax credits do not have an expiration date.

        In general, if the Company experiences a greater than 50 percentage point aggregate change in ownership of certain significant stockholders over a three-year period (a "Section 382 ownership change"), utilization of its pre-change NOL carryforwards are subject to an annual limitation under Section 382 of the Internal Revenue Code (and similar state laws). The annual limitation generally is determined by multiplying the value of the Company's stock at the time of such ownership change (subject to certain adjustments) by the applicable long-term tax-exempt rate. Such limitations may result in expiration of a portion of the NOL carryforwards before utilization and may be substantial. The Company has determined that ownership changes have occurred in prior years which, after limitations, will likely result in approximately $800,000 of its NOL carryforwards expiring unutilized. Accordingly, the related deferred tax assets and corresponding valuation allowance have been removed from the components of deferred tax assets. The ability of the Company to use its remaining NOL carryforwards may be further limited or lost if the Company experiences a Section 382 ownership change as a result of future changes in its stock ownership.

        The components of deferred tax assets at December 31, 2012 and 2011 are as follows:

	December 31,
	2012			2011
Net operating losses	$	38,131,000		$	22,809,000
Research & development credits		4,771,000			3,711,000
Start-up expenditures		5,661,000			6,108,000
Stock compensation		518,000			198,000
Depreciation		237,000			79,000
Accruals		129,000			96,000
Deferred revenue		—			1,533,000
Valuation allowance		(49,447,000	)		(34,534,000	)
Total deferred income taxes	$	—		$	—

F-29

KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

10. Income Taxes (Continued)

        The components of the net income tax benefit for the years ended December 31, 2012, 2011 and 2010 are as follows:

	2012			2011			2010
Benefit for income taxes
Current	$	—		$	—		$	—
Deferred		14,913,000			4,840,000			6,536,000
Valuation allowance		(14,913,000	)		(4,840,000	)		(6,536,000	)
Net income tax benefit	$	—		$	—		$	—

        A reconciliation of the difference between the benefit for income taxes and income taxes at the statutory U.S. federal income tax rate is as follows for the years ended December 31, 2012, 2011 and 2010:

	2012			2011			2010
Income tax benefit at statutory rate	$	12,512,000		$	3,791,000		$	5,451,000
State income taxes		1,980,000			595,000			935,000
Research & development credits		542,000			2,926,000			—
Return to provision adjustments		475,000			(36,000	)		(3,000	)
Permanent items		(596,000	)		(324,000	)		(2,000	)
Federal benefit of prior year state deferred items		—			(2,112,000	)		155,000
Valuation allowance		(14.913,000	)		(4,840,000	)		(6,536,000	)
Net benefit	$	—		$	—		$	—

        The reconciliation of the total gross amounts of unrecognized tax benefits "UTBs" (excluding interest, penalties, and the federal tax benefit of state taxes related to UTBs) for the years ended December 31, 2012, 2011 and 2010, is as follows:

	2012		2011		2010
Balance at beginning of year	$	655,000	$	—	$	—
Additions based on tax positions related to current year		187,000		655,000		—
Reductions for tax positions of prior years		—		—		—
Settlements		—		—		—
Balance at end of year	$	842,000	$	655,000	$	—

        If all of the UTBs were recognized, it would not impact the Company's effective tax rate because likely corresponding adjustments to deferred tax assets would be offset to recorded valuation allowances.

        The Company's policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. There was no accrued interest and penalties associated with uncertain tax positions as of December 31, 2012, 2011 and 2010.

F-30

KYTHERA BIOPHARMACEUTICALS, INC.

Notes to Financial Statements (Continued)

11. Selected Quarterly Financial Data (unaudited)

        The following table contains quarterly financial information for 2012 and 2011. The Company believes that the following information reflects all normal recurring adjustments necessary for a fair statement of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period.

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
Year Ended December 31, 2012
License income, net	$	1,748,000		$	16,003,000		$	—		$	—
Total operating expenses		8,680,000			10,868,000			16,362,000			17,779 ,000
Other income (expense), net		49,000			(629,000	)		(24,000	)		(257,000	)
Net (loss) income		(6,883,000	)		4,506,000			(16,386,000	)		(18,036,000	)
Net (loss) income per share, basic (restated)(1)	$	(4.91	)	$	3.17		$	(11.41	)	$	(1.18	)
Net (loss) income per share, diluted (restated)(1)	$	(4.91	)	$	0.32		$	(11.41	)	$	(1.18	)

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
Year Ended December 31, 2011
License income, net	$	3,058,000		$	3,059,000		$	3,058,000		$	2,622,000
Total operating expenses		4,856,000			4,699,000			4,972,000			8,118,000
Other income (expense), net		94,000			139,000			(405,000	)		(132,000	)
Net loss		(1,704,000	)		(1,501,000	)		(2,319,000	)		(5,628,000	)
Net loss per share, basic and diluted (restated)(1)	$	(1.22	)	$	(1.07	)	$	(1.66	)	$	(4.02	)

(1)

Refer to Note 2, "Summary of Significant Accounting Policies—Restatement" for a description of the restatement.

12. Subsequent Events

        On January 31, 2013 the Company drew down an additional $5,000,000 of available funds under its credit facility and on February 28, 2013, the Company drew the remaining $5,000,000.

F-31