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Allergan Seen Growing Through Cosmetic Slowdown

Shares of Allergan Inc., the Irvine-based maker of Botox and other products used in cosmetic medical procedures, haven’t totally es-caped the sluggish econ-omy.

But the company continues to hold its own, according to a recent story in Investor’s Business Daily.

Allergan has “managed to churn out double-digit sales and profit growth through the economic slump” and is expected to do the same in the next four quarters, according to the story.

Analysts expect Allergan to earn $192 million in the current quarter, up 40% from a year earlier. Sales are seen coming in 14% higher at $1.13 billion.

But the story noted that Allergan’s stock, as of mid-June, was down nearly 20% after hitting an all-time high in January. Allergan had a market value of about $16 billion last week, making it Orange County’s most valuable public company.

Shares of most companies involved in cosmetic medicine have been trending down, the story said.

That’s no mystery. Plastic surgeons told Piper Jaffray analyst Thom Gunderson that business is down 10% to 20% this year for pricey procedures such as facelifts, liposuction and breast implants, which Allergan makes.






Allergan breast implant Web site: overall procedures down 10% to 20%, analyst says

“Those are facing the realities of the tough consumer economy that’s out there,” Gunderson told Investor’s Business Daily.

But doctors who use Botox and other nonsurgical wrinkle-treating methods have businesses that are up slightly while others are down a bit, Gunderson said.

Allergan’s research and development day earlier this month gained praise from Sean Lavin, an analyst with Lazard Capital Markets in New York.

“Few companies could hold a nearly four-hour discussion of their pipeline, as Allergan did,” Lavin wrote in a client note.

Allergan has several “very significant” projects in development, Lavin said.

In particular, he said the drug bimatoprost for longer eyelashes eventually could spur yearly sales of $500 million or more.

Allergan filed a regulatory application for bimatoprost, which is an active ingredient in its Lumigan glaucoma drug, for eyelash growth in early June.

“When we first heard about this new eyelash product, scheduled for release next year, we were skeptical,” Lavin said.

“We then surveyed our female friends and now feel Allergan’s forecast may be low,” the analyst said.

On the obesity front, which Allergan is in with its Lap-Band stomach banding device, Lavin mentioned that Allergan is going to start domestic clinical trials on an intragastric balloon, a device he believes “will revolutionize the way physicians treat obesity.”


TriZetto Buyout Gets Nod

Shareholders of TriZetto Group Inc. are scheduled to vote today on its $1.4 billion buyout deal with Apax Partners, a New York private equity firm. The deal will take TriZetto private.

Earlier this month, ISS Governance Services, a unit of RiskMetrics Group Inc. of New York, recommended that shareholders vote for Apax’s buy of Newport Beach-based TriZetto.

ISS is a proxy adviser whose voting analyses are relied upon by institutional investors, mutual funds and others, TriZetto said in a release.

TriZetto likely sought to go private, analysts said earlier this year, to shield itself from Wall Street’s glare.

The company, which has yearly sales of some $500 million, provides software and services to healthcare plans and benefits administrators to help manage data. It also runs sites that allow patients, doctors and insurers to track healthcare information, appointments and claims.


Bits and Pieces:

Silverado Senior Living, a San Juan Capistrano operator of nursing homes devoted to people with Alzheimer’s disease and other forms of memory impairment, opened a facility in Scottsdale, Ariz. Silverado has 16 communities with 1,223 beds in California, Arizona, Texas and Utah Children’s Hospital of Orange County said it received an $81,000 training grant from the National Institutes of Health to use embryonic stem cell derivation technology as part of its training curriculum for its research institute. Philip Schwartz, a senior scientist at the hospital’s research institute, is set to use the technology to derive the equivalent of human embryonic stem cells from adult cells, rather than from human embryos.

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