Allergan Inc.’s move into medical cosmetics,wrinkle removers, an obesity device and breast implants,has a name.
Earlier this month, the Irvine drug maker unveiled a new division, Allergan Medical, which takes in its growing medical cosmetic offerings.
The company also has a new face to run the operation: 36-year-old Robert Grant, the former chief executive of Irvine medical laser maker BioLase Technology Inc. who came to Allergan in June to head up the new unit.
The moves stem from Allergan’s $3.2 billion buy earlier this year of Santa Barbara’s Inamed Corp., which made wrinkle fillers, breast implants and a stomach band to fight obesity.
Those products and Allergan’s own cosmetic powerhouse, wrinkle remover Botox, make up the bulk of Allergan Medical.
Grant sounds more like a cosmetics executive when he talks about the new unit, which he describes as offering “the science of rejuvenation.”
Allergan Medical mixes Inamed’s “personal touch” marketing to doctors with Allergan’s advertising to consumers with a “shared focus” on science, Grant said.
The unit’s lineup includes Botox Cosmetic, which is injected into the forehead to smooth wrinkles, and Juv & #233;derm, the recently launched wrinkle filler for the lower face that’s Allergan’s first offering from Inamed.
There’s a couple of skincare products: Prevage, an anti-aging cream produced with Elizabeth Arden Inc. and sold at stores, and M.D. Fort & #233;, an alpha-hydroxy acid skincare line sold through doctors.
Surgery Products
Then there are the surgery products. Lap-Band, from Inamed, is a reversible stomach-banding system to fight obesity. Also from Inamed: saline breast implants and, soon, the silicone variety.
Allergan is awaiting the Food and Drug Administration’s OK for silicone breast implants, which were banned in 1992.
“We still remain very confident that we are going to receive FDA approval before the end of the year,” Grant said of silicone implants.
The integration of cosmetic products from Inamed and Allergan has “gone very smoothly,” Grant said.
“If we had only acquired Inamed to keep it as a totally separate business, then all we would be doing is changing the ownership of the company and not mining any of the synergies that were originally intended around the acquisition,” Grant said.
Getting Inamed provided Allergan with “a broadening in product offerings in the relatively price inelastic private-pay cosmetic surgery market,” said Ken Kulju, an analyst with Credit Suisse First Boston, earlier this year.
That’s a bit of analyst speak to say Allergan is selling products that patients pay for themselves, without constant pressure for lower prices from insurers.
Allergan Medical is getting ready to start advertising for Juv & #233;derm in a way that Grant said is designed to put the brand into “the household consciousness of America.”
Juv & #233;derm isn’t much of a stretch for Allergan, which has spent heavily to market Botox, itself a household name.
Breast implants are another matter.
Early Implant Pause
Chief Executive David Pyott said earlier that taking on implants as part of the Inamed deal gave him pause.
“I literally sat in my office thinking, ‘No, no, no, no, you really can’t be thinking this,'” Pyott said. “And then we did all the analyses and checks and discovered that really, there was no issue with silicone.”
Regulators banned silicone implants nearly 15 years ago for the vast majority of American women because of concerns about ruptures and leaks.
Only women undergoing reconstructive surgery after mastectomies have been allowed to get the implants.
For the larger cosmetic market, women have settled for saline implants or gotten the work done overseas, where silicone still is available.
Regulators seem to have come around.
Both Allergan and Mentor Corp., a Santa Barbara-based rival, received “approvable letters” from the Food and Drug Administration for silicone implants, a move seen as a step to a final sign-off.
Marketing Plan
Pending final approval, Allergan Medical has a marketing plan for silicone implants, Grant said.
A goal, he said, is to “educate the market in a responsible fashion” about the implants, which still carry a stigma.
Allergan Medical also plans to talk about implant surgery, Grant said.
“We want to destigmatize the procedure as well,” he said.
Lap-Band is the other surgical product inherited from Inamed.
It’s a band that attaches around the “neck” of a patient’s stomach to control hunger.
Acceptance of Lap-Band is growing, according to Grant.
Stomach banding procedures such as those using Lap-Band grew by about 45% last year, Grant said. Traditional gastric bypass surgery, which is more invasive and riskier, grew about 11%.
“Gastric banding for the Lap-Band procedure is outstripping gastric bypass right now,” he said.
Allergan could seek FDA approval to use Lap-Band for children and teens, according to reports. Stories quoted Bart Bandy, a senior vice president who spoke at an obesity conference at the Cleveland Clinic.
Grant downplayed the reports, describing them as “one of our managers quoted from the podium type of a thing.”
“We are currently not in formal discussions with the FDA about an extension” of Lap-Band, Allergan spokesman Caroline Van Hove said.
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Heart Valve Maker Edwards Profitable, Outlook Narrowed
Edwards Lifesciences Corp. of Irvine last week said it swung to a third-quarter profit, in line with Wall Street’s expectations.
The heart valve maker said its quarterly profit was $27.8 million, vs. a $4.4 million loss a year earlier.
Analysts expected Edwards to earn $27.5 million.
But sales growth and a narrowed profit outlook for the rest of the year registered with investors.
Third-quarter sales came in at $247.4 million, up 3% from a year earlier, but below Wall Street’s $255.1 million estimate.
FloTrac, a minimally invasive heart monitor, and LifeStent, which opens blocked blood vessels, helped drive sales, Edwards said.
Critical care sales, which FloTrac falls under, were up 8.7%, while vascular sales, including LifeStent, were up 12.8% to $17.6 million.
Edwards’ core heart valve business grew at a slower rate, expanding 3.9% to $117.3 million.
The device maker also narrowed its 2006 profit estimate to $130.8 million to $132 million, down from as much as $133.8 million, all excluding special charges and option expenses.
Edwards expects yearly sales to come in at $1.04 billion to $1.06 billion.
,Vita Reed
