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New Uses, Products on Allergan’s Plate for 2013

Pyott: “planning for success” with 8 million deal for Map Pharmaceuticals

New uses for old products and a smattering of new products are on Allergan Inc.’s plate this year.

The Irvine-based drug maker recently got Food and Drug Administration approval for the use of its best-seller Botox in treating idiopathic overactive bladder. It could also receive one later this year for treating crow’s-feet lines, an extension of its initial cosmetic approval for brow wrinkles.

And regulators should make a decision on Levadex—an inhalable acute migraine drug developed by Allergan and Mountain View-based Map Pharmaceuticals Inc.—by April 15. Allergan is in the process of acquiring Map in a $958 million deal announced in late January.

“We are planning for success,” Chief Executive David Py-ott said about the decision to strike a deal with Map before Levadex got final FDA approval.

Allergan has said that Levadex, which will be prescribed for patients with two to eight headaches a month, could have peak sales of $500 million and noted that it is one of relatively few branded drugs in the migraine arena.

Pyott noted that Allergan has “already built out our sales team” for its migraine franchise, which Levadex will fall into if approved for use for treating alongside Botox.

Levadex is a “strong complement” to Botox, Seamus Fernandez, an analyst with Boston-based investment bank Leerink Swann LLC, said in a research note.

Levadex has patent protection until 2028 “and uses a respiratory delivery device, a challenge for generics,” Fernandez said.

Allergan also is hoping for FDA approval of Juvéderm Voluma, a longer-acting version of its core lower-face skin filler, by the end of 2013, Pyott said.

Longer Term

He also mentioned a few of Allergan’s longer-term projects.

The company is looking to advance its development of a designed ankyrin repeat protein treatment for wet age-related macular degeneration—a fairly common cause of blindness—on a longer-term basis.

“And clearly to make the decision to move to Phase III [trials] given the investment, we would need to make sure we need to see product differentiation versus [Roche/Novartis’] Lucentis, which is the” competitor, Scott Whitcup, Allergan’s chief scientific officer, said in the conference call.

Pyott said that analysts on the call “really piled on” the designed ankyrin repeat protein, which Allergan is licensing from Switzerland-based Molecular Partners AG.

Allergan is planning to spend more than $1 billion in research and development in 2013, or about 17% of revenue.

“So that’s a number that catches everyone’s eye,” Pyott said.

Allergan isn’t planning to continue all its research and development projects.

The drug maker is terminating its program for using Botox to treat benign enlarged prostates because of “mixed efficacy data,” Pyott said.

Spectrum Partnership

“Furthermore, as regards our partnership with Spectrum Pharmaceuticals for apaziquone, we have returned the clinical development program and commercialization rights to them. In exchange, Allergan will receive a royalty on any future revenue after regulatory approval,” he added.

Allergan had teamed up with Spectrum, which was once based in Irvine but has since moved to Henderson, Nev., on the bladder cancer drug candidate since 2008.

Allergan projects sales of between $5.6 billion and $6 billion this year, excluding the Lap-Band weight-loss device, which the company is hoping to sell in the first half of this year. It said it could see a profit of $1.46 billion to $1.47 billion this year, above Wall Street forecasts of $1.45 billion.

The company earlier this month posted a fourth-quarter profit that just missed analyst expectations on revenue that was in line with forecasts. It had earnings of $350.9 million before charges, below expectations of $360 million. Allergan said that its results were affected by delayed recognition of a federal research-and-development tax credit. Fourth-quarter net income was $324 million, up 16% from a year earlier.

Product Sales

Allergan’s fourth-quarter product sales—which are slightly less than total sales—of $1.48 billion met Wall Street expectations.

Botox sales were up 14% to $475 million. Allergan attributed the gain primarily to Botox’s recent approval as a treatment for chronic migraine headaches.

Sales of prescription eye drugs, Allergan’s largest business, rose 7% to $706 million.

“It was a good growth quarter,” Pyott said of Allergan’s performance.

Lap-Band sales declined again, falling 22% to $37 million.

Allergan earned $1.1 billion on revenue of $5.8 billion for all of 2012.

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