Allergan hopes Botox makes money in waves

Other uses envisioned for anti-wrinkle product

May 26, 2002|By Ronald D. White | Ronald D. White,SPECIAL TO THE SUN

Kimberly Horowitz is an international gem buyer specializing in diamonds, brokering deals in the hundreds of thousands of dollars. In her line of work, a confident, relaxed appearance can be the difference between negotiating a great price or merely a good one. That's why she decided her crow's feet had to go.

"Lines and furrows make you look tense or worried even when you're not. In my job, I try to have a poker face," said Horowitz, who is 41. The Los Angeles resident relies on injections of botulinum toxin type A, or Botox, to lose the lines without undergoing surgery.

"This is a wonderful tool. Your face looks very relaxed, like someone who has been on the beach for a week. That's how it makes me feel," Horowitz said.

That also makes her the kind of person Allergan Inc. hopes to attract in droves through a nationwide media blitz for its Botox Cosmetic. The Irvine, Calif.-based company is positioning Botox as a simple, safe and affordable way to inhibit the signs of aging.

"Your toughest wrinkle," it says in a print ad, with lines superimposed on a woman's forehead. "It took 40 years to get it and 10 minutes to do something about it."

But Allergan is banking on much more from Botox, which is the company's biggest product, with worldwide sales of $310 million in 2001 and $88.6 million in the first quarter of 2002. Company executives are hoping that it will mitigate the potential loss of sales for its next-best-selling drug, glaucoma medication Alphagen, which is losing its battle in federal court against generic competition.

Company executives also hope that Botox will fuel Allergan's transformation into a specialty-pharmaceuticals business as they sell off its ophthalmic surgical devices and well-known contact-lens-care units. That makes Botox even more important to help fund research and development, and Allergan intends to milk it throughout the decade.

"You need to look at Botox as a series of waves. The first was movement disorders. The second is the cosmetic wave," said Eric Brandt, Allergan's chief executive. "The next wave is [use for] pain and headaches, in the 2006 time frame."

Brandt added that 2008-2009 could see the use of Botox on so-called smooth or involuntary muscles that function automatically.

"Botox is very much a versatile and strategic product," Brandt said. "It's an excellent motor to drive the company forward."

Analysts differ on the scope of Botox sales growth around the world, but most say Botox growth will be significant, with competing formulations and technological alternatives as much as three years away. Cosmetic purposes account for about one-third of Botox sales, an Allergan spokeswoman said.

Allergan is hoping for a 25 percent to 35 percent rise in Botox sales for 2002, increasing to $385 million to $420 million, notes Morningstar analyst Travis Pascavis.

"It's realistic. That's not a blockbuster by industry standards, but it is by Allergan standards and that would be very successful," Pascavis said.

Corey Davis, an analyst for J.P. Morgan Chase & Co., said Botox "could hit $740 million in annual sales by 2005."

Allergan is dwarfed by its biggest competitors in the pharmaceutical industry, with 2001 revenues of about $1.7 billion compared with $32.2 billion for Pfizer Inc., the nation's biggest drugmaker.

But Allergan executives say they are well-placed in the specialty-pharmaceuticals market, which comprises smaller companies that typically do not engage in their own research and development, as Allergan does. Such companies can afford to promote products that sell in the low hundreds of millions of dollars and below, a level that giant pharmaceutical companies can't justify.

Ronald D. White writes for the Los Angeles Times, a Tribune Publishing newspaper.

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