Allergan Inc.’s skincare products deal with Est & #233;e Lauder Cos. grew out of a chance meeting, the Irvine drug maker’s chief executive said.
Allergan and New York-based Est & #233;e Lauder said last month that they plan to sell a line of upscale skincare products this fall under the Clinique name. The line will be available through doctors, not cosmetic counters in department stores.
The line is designed to piggyback on several cosmetic procedures, including Botox injections for wrinkle removal, microdermabrasion and laser hair removal, according to Allergan and Est & #233;e Lauder. Figures from the companies said Americans spend more than $12 billion on cosmetic procedures a year.
Allergan makes a variety of products, ranging from eye drugs to Botox to other medical cosmetic products, such as wrinkle fillers and breast implants. The company has worked with cosmetic companies before: Its Prevage, an anti-aging line, was done with Elizabeth Arden Inc. of New York.
The Est & #233;e Lauder deal stemmed from a “chance meeting I had with the president of Clinique Laboratories (Lynne Greene),” Allergan Chief Executive David Pyott said in a recent interview.
“As we started talking, it was quite clear that we both had some very interesting strategic strengths that the other one didn’t,” he said. “Really, when you step back from it, obviously you know Clinique is a famous brand name,it’s the biggest premium cosmetics brand, both in the U.S. and Canada.”
Clinique’s strengths, Pyott said, include formulation skills, “sensory positive experience” and packaging.
“It reminds me of the old days when I used to sell, among other things, chocolate drinks,” said Pyott, who before Allergan ran the nutrition arm of Novartis AG, maker of Boost vitamin drinks and other products.
Allergan, on the other hand, “comes from the other side,” which Pyott said relates to a product’s effectiveness.
“What we give them is the knowledge of what does the patient and the doctor really need in this physician channel, and of course the distribution power to sell the products into the channel,” Pyott said.
The Allergan-Lauder deal calls for Clinique to develop and make the line and sell it to Allergan. Allergan’s set to handle marketing and distribution of the line, which will be allergy tested and fragrance free.
Medicis’ Application Snag
Allergan’s shares got a boost at the end of January, in part because of the Food and Drug Administration’s rejection of Medicis Pharmaceutical Corp.’s application for Reloxin, a potential Botox rival.
Scottsdale-based Medicis said the FDA denied its application for not being complete, but said that the issues were administrative, not substantive.
The decision could delay Reloxin’s launch. Medicis is working with France’s Beaufor Ipsen SA to develop Reloxin.
Wall Street weighed in: Frank Pinkerton of Banc of America Securities said a refiling of the Reloxin application likely could take six months. The current state of the FDA signaled to him that the approval time for the drug will be longer than the typical 12-month review period.
Ken Cacciatore, an analyst with Cowen & Co., wrote that he believed the Reloxin denial was likely a non-event but may take a few months to resolve, pushing Reloxin’s potential launch to mid-2009 from a prior target of early 2009.
Reloxin has some similarities to Botox.
Several dermatologists and cosmetic surgeons are looking forward to its debut, believing that Reloxin will be a lower-priced competitor.
Nursing Home Operators
The nursing home industry may escape difficulties that other service providers are feeling, a Credit Suisse analyst recently said.
In a report, analyst Ken Weakley reiterated a positive outlook on long-term healthcare companies, giving Irvine-based Sun Healthcare Group Inc. and Skilled Healthcare Group Inc. of Lake Forest an “outperform” rating.
Weakley wrote that Medicare’s push of patients into lower-cost skilled nursing facility beds “is as inexorable as ever” and that recent reimbursement recommendations have been favorable to the industry.
On the other hand, Weakley believes that hospital operators will be pressured by the weakening U.S. economy this year and that soft admissions come at a bad time for hospital companies that are trying a turnaround, such as Tenet Healthcare Corp., which has five OC hospitals.
Bits and Pieces:
NAI Commercial’s Economos Group in Newport Beach is listing a three-story, 33,731-square-foot medical building in Aliso Viejo for $16 million. The building is visible from the San Joaquin Hills (73) Toll Road and includes Bristol Park Medical Group among its tenants. George Economos and John Bosko are representing the seller Ware Malcomb, an Irvine design firm that does its share of healthcare work, said it was awarded a contract for Corona Medical Plaza’s second phase Children’s Hospital of Orange County said it received a bronze level California Awards for Performance Excellence honor from the California Council for Excellence. The council’s program emulates the Malcolm Baldrige National Quality Award.
