Irvine-based Allergan Inc. is officially out of the weight-loss ranks.
The maker of Botox and other drugs said this month that it completed the sale of its obesity intervention business to Texas-based Apollo Endosurgery Inc. for a $75 million up-front cash payment and a $15 million minority equity interest.
Lap-Band, a reversible and adjustable stomach band, and Orbera, an intragastric balloon that wasn’t sold in the U.S., made up the bulk of Allergan’s weight-loss portfolio.
Allergan originally got Lap-Band seven years ago when it acquired Santa Barbara-based Inamed Corp. for $3 billion. That buy also brought Allergan the Natrelle line of breast implants, as well as the Juvéderm line of facial fillers.
Obesity intervention had performed fairly well. Then the recession hit.
Sales declined steeply in recent years, going from a peak of $296 million in 2008 to $159.5 million in 2012, and were down 22% in 2012’s fourth quarter, the last period prior to Allergan putting it into the discontinued operations ledger.
“Anything that doesn’t grow substantially does not belong in the Allergan portfolio,” Chief Executive David Pyott said in late October after Allergan announced the sale to Apollo.
“Prerecession, I think we hadn’t fully realized how much of [Lap-Band] was cash-pay versus pay with insurance—and that market has virtually gone away,” Pyott said. “The overall market, sadly, given the demand … for surgical obesity intervention, is scarcely growing.”
Surgeries with Lap-Band generally cost between $15,000 and $20,000, and they often aren’t completely covered by health insurance.
Besides the cost, Lap-Band also drew some legal scrutiny based on the marketing and medical practices of some doctors who used the device.
Chicago-based Zacks Investment Service gave a thumbs-up to the Allergan-Apollo deal in a research note.
“The obesity market is getting very competitive. Last year, two new obesity drugs—Belviq and Qnexa—were approved. Other companies are also developing [drug] candidates targeting the lucrative obesity market. Sale of the struggling business unit will enable [Allergan] to focus on its areas of strength,” Zacks wrote.
AltaMed Opens HIV Clinic
Los Angeles-based AltaMed Health Services opened a specialty clinic in Santa Ana for treating people with HIV and AIDS.
AltaMed is a nonprofit operator of what’s known as “federally qualified health centers,” which serve as safety-net providers of healthcare services to people who are uninsured or underinsured.
Its new HIV Specialty clinic will provide prevention services, acupuncture, counseling, dietitians, access to clinical trials and more.
Figures from the Orange County Health Care Agency show that 6,876 county residents were infected with HIV in 2012. Latinos make up some 42% of the county’s HIV cases.
The new clinic is part of a recent effort by AltaMed to expand its Orange County presence; it has longer hours, more personnel at its clinics, and opened a new pharmacy in Anaheim.
AltaMed said this year that patient visits at its Orange County clinics over the past three years grew by 34%.
Edwards Fund to Grant $5.6M
The Edwards Lifesciences Fund, the charitable arm of Irvine-based heart valve maker Edwards Lifesciences Corp., said this month it would grant $5.6 million this year to more than 450 nonprofit organizations promoting health and community-focused charitable initiatives.
Edwards has given more than $30 million to nonprofit organizations worldwide since establishing the fund nine years ago.
A look at the fund’s page on Edwards’ website shows several of the fund’s goals, many of which emphasize the company’s core treatment focus of heart valve disorders.
Those include expanding awareness of cardiovascular disease, its prevention and treatment; enhancing support and access to care for underserved cardiovascular patients; and supporting research and education to increase expertise and innovation in treating cardiovascular disease.
Hospital Workers Unionize
More than 180 workers at Kindred Hospital in Westminster voted to join the National Union of Healthcare Workers. Covered workers include licensed vocational nurses, certified nursing assistants and respiratory therapists.
Kindred Hospital is a 109-bed facility that serves patients with complex medical conditions. It ranked No. 16 on the Business Journal’s most recent list of the top hospitals in Orange County, with net patient revenue of $77.6 million for the 12 months ended September 2012, the most recent time period for which data is available.
Bits and Pieces
Newport Beach-based BioCell Technology LLC said the U.S. Patent and Trademark Office awarded it a patent on a dietary ingredient for methods of promoting skin and joint health. … CHOC Children’s at Mission Hospital said it won a Guardian of Excellence award from South Bend, Ind.-based Press Ganey Associates Inc., a performance improvement organization. It won the award for physician engagement.
