Allergan Inc. is moving along with its absorption of Inamed Corp., which it bought this spring for $3.2 billion.
The company said earlier this month that it combined the commercial and research and development operations of Inamed into a new unit called Allergan Medical.
Allergan Medical includes Botox Cosmetic, the company’s blockbuster wrinkle-reducing drug. The unit also includes hyaluronic acid and collagen based skin fillers, breast implants and the Lap-Band adjustable stomach banding system to treat obesity.
The company plans to keep operations at Inamed’s former Santa Barbara headquarters. Cosmetic medical research and development, customer and patient service and quality assurance work will be done there.
Robert Grant, former chief executive of Irvine dental device maker BioLase Technology Inc., is overseeing Allergan Medical as its president.
Grant said it was “a very exciting time” for Allergan as it rolls out Juv & #269;derm, its next-generation skin filler and the first product of the combined company.
“This milestone stems from combining the strengths of both companies and further demonstrates our strategic pathway for long-term success,” Grant said.
Allergan also said that its neuroscience, eye and skin drugs are staying under its core drug portfolio.
Juv & #269;derm recently got a mention in a CNNMoney.com article outlining the looming growth,and growing competition,for injectable treatments for wrinkles in the lower part of the face.
Medicis Pharmaceutical Corp., the Arizona company that lost out in its bid to buy Inamed, dominates the estimated $200 million to $300 million yearly market with Restylane. But Juv & #269;derm could become a competitive threat, the story said.
“Medicis certainly isn’t going to lie down and let Allergan walk all over them,” Gary Nachman, an analyst with Boston-based Leerink, Swann & Co., told CNNMoney.com.
“Over time, I forecast the Restylane franchise will grow from its current levels, but it’s going to be challenging. It’s going to be a more competitive marketplace a few years down the road,” Nachman said.
And Allergan and Medicis could face even more competition. A potential rival: Isolagen Inc., a Pennsylvania company that’s run by Nicholas Teti, Inamed’s former chief executive.
Beckman Buy, Ratings
Beckman Coulter Inc., the Fullerton maker of medical testing and diagnostic equipment and supplies, is paying $185 million for Lumigen Inc., a company that supplies chemicals used to run tests on Beckman’s machines.
Southfield, Mich.-based Lumigen makes chemiluminescent reagents, which are used to run tests for the thyroid, the heart, fertility, anemia and others.
About 40% of Lumigen’s $33 million in yearly revenue comes from chemiluminescent sales to Beckman.
Beckman derives about 60% of its $2.4 billion in yearly sales from supplies, chemistry kits and services.
The Lumigen buy is set to close Nov. 1. Beckman sees the deal adding to profits in 2007.
Meanwhile, Fitch Ratings Inc. changed its outlook on Beckman to “stable” from “negative” while dropping its issuer default, senior unsecured debt and bank loan ratings to “BBB” from “BBB+.” Fitch said the ratings apply to $794 million worth of outstanding debt.
“Fitch’s main concern pertains to the negative effect to free cash flow generation from the change in customer leasing policy, but notes that the negative effect should cease as the incremental capital spending for equipment moderates in outer years and amortization of the equipment more fully offsets the capital investment,” the rating agency said in a release.
Last year, Beckman switched to operating leases, where revenue is spread over the life of the lease. Before, the company used a sales lease method, in which the value of the deal was recognized at once.
Device Maker Skips IPO
Earlier this year, we noted that Alsius Corp., an Irvine-based medical device maker, was poised to join the ranks of the area’s public companies.
Well, Alsius is going to go public, albeit in a different way.
Alsius said earlier this month it is being bought by Ithaka Acquisition Corp., a company with operations in New York and Hawaii.
The deal calls for Alsius to become a unit of Ithaka, with its shareholders receiving a total of 8 million shares of Ithaka stock, a deal worth about $45 million. Once the buy is completed, Ithaka is set to take on Alsius’ name.
Ithaka, which trades on the low-profile bulletin board, said it’s seeking a Nasdaq listing.
Alsius makes catheters and other instruments used in hospitals to control patients’ body temperatures. Ithaka was formed last year to acquire a healthcare business.
Both companies said Alsius’ current management team would remain in place to run the business. William Worthen, Alsius’ chief executive, is set to head the combined company.
Alsius had filed with the Securities and Exchange Commission for a $40 million initial public offering back in April.
Spectrum Updates Progress
Irvine’s Spectrum Pharmaceuticals Inc. said that ozarelix, an experimental drug for treating non-cancerous enlarged prostate glands, was “highly effective” in a mid-stage clinical trial in reducing symptoms of benign prostate hypertrophy.
Spectrum tested ozarelix at four doses versus a placebo in a 144-patient clinical trial. Benign prostate hypertrophy affects an estimated 28 million American men and represents a potential market of $4 billion a year.
Spectrum is developing ozarelix under a licensing agreement with Aeterna Zentaris Inc., a Canadian biotechnology company.
In a Reuters interview, Luigi Lenaz, the drug maker’s chief scientific officer, said Spectrum hopes to begin pivotal late-stage trials in the second half of 2007, following Food and Drug Administration discussions.
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