Long Term Stocks
8/25/2009 11:38 AM ET
(RTTNews) -
Shares of Botox-maker Allergan Inc. (AGN: News ) have had an impressive run-up since the beginning of this year -- rising as much as 35% to $56. Though speculation that Allergan could be acquired has been doing the rounds for years, there were renewed rumors of a takeover early this month.
Now, let's take a look at the company's product portfolio, recent approvals, and anticipated launches.
Botox injection, the wrinkle smoother, is Allergan's flagship product with annual sales of over $1 billion. Developed in the 1970s by Alan Scot, Botox was then known as Oculinum. The FDA approved the injection in 1989 for treatment of crossed eyes and twitching eyelids. In 1991, Allergan acquired the right to Oculinum and changed its name to Botox. The FDA expanded the approval of Botox in December 2000 to treat cervical dystonia, a condition in which the neck muscles contract and cause abnormal neck and head movements. Although Botox has long been used off-label for frown lines, it won the FDA approval for that indication only on April 15, 2002. Apart from the above mentioned approved uses, Allergan owns or has applied for patents for more than 90 potential uses for Botox.
Botox, which is used in both the aesthetic and therapeutic categories, has been enjoying a complete monopoly on the anti-wrinkle market in the U.S. all these years. It was only on April 30, 2009 that the FDA approved Dysport aka Reloxin, developed by Medicis Pharmaceutical Corp. (MRX) and France-based Ipsen SA, making it only the second drug approved for wrinkle treatment.
With consumers cutting back on the wrinkle treatment in the face of the recession and the FDA requiring a black box labeling on Botox and similar products, Allergan has been reporting quarter-over-quarter decline in Botox sales since the fourth-quarter of last year. In the recent second-quarter ended June 30, 2009, Botox sales declined 3.2% to $336.8 million. According to Allergan, in the second-quarter, it has not felt any real impact from the launch of rival Dysport, as shipping of that product commenced on June 15, too late in the quarter to affect the results.
Botox sales are expected to decline to $1.2 billion - $1.22 billion range in 2009 from the $1.31 billion reported in 2008. However, the company is determined to maximize the potential of Botox in therapeutic areas where there is a substantial need for new treatment options.
Allergan is on track to seek expanded approval of Botox for chronic migraine. The top-line results from phase III trials evaluating Botox for migraine released last September showed a significantly greater decrease in headache days among patients receiving Botox, compared with those receiving a placebo and was well tolerated too. The company is planning to submit the sBLA for the use of Botox in chronic migraine by the end of this quarter (Q3).
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