Allergan Inc. is banking on other uses for its flagship Botox drug as well as new products to keep up the growth that’s made the company a standout on Wall Street.
“This really is a product-based business,” said Lester Kaplan, the Irvine-based specialty pharmaceutical company’s president of research and development.
Developing new products is core to Allergan’s strategy for driving growth, Kaplan told investors and analysts during a presentation earlier this month at the company’s “R & D; Theater” on its Dupont Drive campus.
Allergan offered previews and reviews of what’s on tap in the company pipeline. The session featured several Allergan scientists and was led by Kaplan.
“The major purpose of the review is to give a more in-depth look at the technology in the company,” Kaplan said.
Allergan has 33 products, including compounds, in its pipeline, Kaplan said. Of those, 15 are eye-care products, 13 are neurotoxins like Botox and the remaining five cover skin care and others. Most are in second- or third-stage clinical trials, he said.
“They have an outstanding pipeline,” said Katherine Breedis, an analyst with Goldman, Sachs & Co. in New York who attended Allergan’s review. “It’s one of the leading companies in ophthalmologic pharmaceuticals, and they are the pioneer in developing neurotoxins for movement disorders and cosmetic use.”
Allergan scientists led off their review with eye-care drugs, with a particular emphasis on glaucoma treatment Lumigan, which was approved by the Food and Drug Administration in March and was put on the market shortly afterward.
Although Allergan makes other glaucoma treatments, including Alphagan, Betagan and Propine, analysts contend Lumigan could be another breakout drug for the company. Goldman Sachs’ Breedis said she believes Lumigan is gaining market share and interest among ophthalmologists.
Prior to Lumigan’s approval, Allergan Chief Executive David Pyott referred to the drug as having “the characteristics of a product with great potential.”
Lumigan’s clinical trials showed that it could be an effective once-a-day treatment for glaucoma with possibly fewer side effects than other drugs.
Dr. Scott Whitcup, Allergan’s vice president of ophthalmology, presented clinical study data showing that glaucoma patients treated with Lumigan reached lower target intraocular pressures than those who used timolol, the generic version of Merck & Co.’s Blocadren.
Michael Garst, Allergan’s vice president of chemical services, and Gerald De Vries, a senior research investigator, followed the glaucoma presentation with one on compounds being developed to combat retinal diseases, particularly age-related macular degeneration.
Allergan is specifically examining, among others, compounds that could stanch vessel growth in the retina.
At 43%, eye drugs made up the largest portion of Allergan’s $1.56 billion in sales last year. By contrast, neurotoxins made up 15% of sales but generate a great deal of attention,particularly Botox.
Allergan’s said it expects Botox sales to increase between 25% and 35% in 2001 off of a base of around $200 million last year, Kaplan said.
Botox was developed and approved for treating neuromuscular disorders but has gained wide usage in cosmetic applications, particularly for wrinkle removal. Allergan is awaiting word from the Food and Drug Administration on whether Botox will be approved for treating brow furrows, Kaplan said.
Meanwhile, company scientists said they are working on other uses for Botox. Those include treatments for severe headaches, spasticity, excessive sweating, gastrointestinal muscle disorders, lower back pain and temporomandibular joint disease, a painful bone disease affecting the area where the mouth connects to the skull.
“Botox has clearly defined the neurotoxin market,” said Dr. Mitchell Brin, Allergan’s vice president, development, Botox/neurology. “And Allergan is going to define the next generation of neurotoxins.”
Botox studies presented at the review included a comparison with Myobloc, a different formulation of neurotoxin produced by Elan Corp., an Ireland-based drug maker. Allergan officials said the data showed Botox’s formulation to be more effective.
“I’m not very concerned about Myobloc taking share from Botox. I believe Botox will continue to be the gold standard,” analyst Breedis said.
Allergan also touched on dermatology drugs during the review, including its Tazorac medication. The drug is awaiting regulatory approval for acne treatment, a spokeswoman said.
Allergan’s pipeline activity has gained investor and media attention since the arrival of Pyott, who vowed to boost research and development after taking the company’s helm three years ago. Allergan and Allergan Specialty Therapeutics Inc., a development unit, have doubled their R & D; spending during the past three years and spent around $270 million last year, according to Pyott.
But Kaplan, who’s been with Allergan for 18 years, indicates that R & D; has also played a role in the past.
“The beginning of Allergan as a technology-based pharmaceutical company was when we were part of SmithKline (from) 1981 to 1989,” Kaplan recalled.
Before Pyott’s arrival, Allergan was building up its ability to discover and develop new chemicals and drugs in-house, he said.
“Then, in 1998 with David’s arrival, we did a complete review” of Allergan’s operations, Kaplan said. “We had a special emphasis on how best to allocate resources. The strategy focus (included) a sales force expansion, getting additional troops.”
Expanding sales was done in concert with hiking research and development spending. Doing that gave Allergan’s sales “troops” something “to put in their bag and sell,” Kaplan said.
The company also tries to work at a faster pace than its rivals, according to Dr. John Gibson, senior vice president of development.
“In Allergan, the process condenses phases I and II. Allergan (timelines) are speedier than the industry average,” Gibson said during the review.
Allergan is working toward a target of 80 months, or 6 and a half years, for its development-to-market cycle, Gibson said. By contrast, the pharmaceutical industry average is about 115 months, or 9 and a half years.
“We are proud of our robust product pipeline, good balance, strong track record and we intend to get better,” Gibson said. n
