Allergan Inc.’s David Pyott is making the rounds of business publications in the wake of mild concern about the performance of the Irvine drug maker that he’s headed for eight years.
His pitch,there’s nothing to worry about.
Allergan’s stock has been off about 6% in February after the company released its fourth-quarter results early in the month. The worry is that Allergan’s flagship Botox neurotoxin, particularly the cosmetic version, could be slowing.
When BusinessWeek asked Pyott if Botox has peaked, the urbane executive said:
“No. There were six fewer selling days in the last quarter than there were in the same period a year before. If you were to add those back, you’d see the company growing 23%. And we’re ramping up our research spending on Botox, as we prepare the trials for headache patients. Those trials are enrolling now.”
Pyott was asked about how Botox, a purified form of the botulinum toxin, is being received by patients who suffered from headaches. Allergan is pushing to have Botox approved as a migraine treatment, though doctors now can prescribe it for that if they see fit.
“The drug has been used off-label in headache and pain clinics,” he said. “Patients say it helps. And it doesn’t cause the side effects of other treatments.”
Insurers sometimes balked because of Botox’s notoriety as a wrinkle reducer, Pyott said.
“It’s injected in the forehead, so at first, managed-care companies reacted by saying, ‘I’m not going to pay to treat people’s wrinkles.’ Then they found out that the cost of the treatment only amounts to about $1.20 a day, and their attitude went from ‘no thanks’ to tremendous enthusiasm,” he said.
BusinessWeek asked about how Allergan was progressing in terms of its eye drug efforts. The drug maker’s had “enormous success” with Restasis, its dry eye medication, according to Pyott.
“Restasis goes to the root cause,” he said. “The average co-pay on Restasis is $27 a month. For most people, who are spending a lot on artificial tears, that’s not a problem. We created this market and sold $190 million worth of product.”
BusinessWeek warned that eye care “was a sleepy business with little potential for growth.” Allergan set on a “blazing growth spurt” after Food and Drug Administration clearance for Botox Cosmetic in 2002, the magazine noted.
Budget Would Cut Hospital Funds
As President Bush and legislators prepare to tackle budget issues, California’s hospitals are rallying the troops for what they call potentially crippling cuts to Medicare and Medicaid.
The state’s hospitals could lose some $600 million in Medicare funding in the next five years, along with $13 billion in cuts in five years from Medicaid, according to the California Hospital Association, a trade group.
Specifically, the association fears that the Medicaid reductions would be aimed directly at the state’s “safety net” hospitals, such as children’s hospitals, teaching facilities and public and private hospitals.
In a release, Duane Dauner, the association’s president, said that various pressures have led to more than half of the state’s hospitals losing money from patient care operations last year.
“Our hospitals simply cannot afford to absorb any further reductions at a time when California’s healthcare system is on the verge of collapse,” Dauner said. “(The association) believes it is inappropriate for the federal government to cut vital payments to hospitals at a time when they are already facing unprecedented financial pressures. We urge Congress to reject the president’s proposed healthcare budget cuts.”
It’s Official: Micro Bought
Micro Therapeutics Inc. now is off the roster of Orange County-based public companies.
Ev3 Inc. of Plymouth, Minn., said earlier this week that it completed the acquisition of the shares of the Irvine-based device maker that it didn’t already own for about $115 million.
Micro makes devices that tackle blood vessel diseases.
Micro will continue operations as a subsidiary of Ev3, which also makes several types of medical devices. The deal didn’t require approval from Micro’s shareholders.
Bits and Pieces:
St. Joseph Health System, Orange, signed a deal with Perot Systems Corp. to put Perot’s CareRedesign consulting program in place. Four St. Joseph facilities are participating, including Fullerton’s St. Jude Medical Center and Mission Viejo’s Mission Hospital. St. Joseph and Perot have worked together since 2000, when the health system picked Perot to manage its technology services Edwards Lifesciences Corp., Irvine, named Dr. Barbara McNeil to its board. McNeil is professor and chair of Harvard Medical School’s department of healthcare policy, as well as a professor of radiology at Harvard Medical’s Brigham and Women’s Hospital, Boston Garden Grove Hospital’s Center for Surgical Weight Control named Dr. Carson Liu as its medical director. Liu previously was medical director of Century City Hospital’s minimally invasive bariatric surgery program Anaheim Memorial Medical Center now is offering combined positron emission tomography and computerized tomography scans using technology provided by Alliance Imaging Inc., Anaheim Eagan, Minn.-based Securian Dental introduced a tiered dental program for self-insured employer groups in OC and other markets in California.
