Allergan, maker of the popular Natrelle breast implants and BOTOX cosmetic is apparently poised to receive FDA approval of their next potential blockbuster. The new product, Latisse, is a topically applied drug which is effective for growing and thickening eyelashes. While that sounds like a superficial indication, there is expected to be a huge pent up demand for such a product.

From Seeking-Alpha

Allergan received an approval recommendation today from a FDA advisory panel for Latisse (bimatoprost solution 0.03%) as a cosmetic medicine treatment which would represent the first and only FDA-approved product to enhance eyelashes (making them darker, longer, and thicker). Latisse would be packaged with a special applicator to apply the drops on the edge of the eyelid as compared to the current use of bimatoprost as Lumigan, which is already on the market as a treatment for glaucoma to lower eye pressure.

Allergan estimates peak sales for Latisse of $500M, compared to trailing 12-month sales of $4.4B, with an expected FDA action date by mid-2009 on the pending NDA. Allergan is also a component in the ETFI Cosmetic & Reconstructive Medicine Index and could be a takeover target for big pharma after Johnson & Johnson (JNJ) agreed to pay $1.1B for breast implant maker Mentor (MNT) – although the market cap of Allergan is much larger at $11.7B with a wider range of businesses such as specialty pharma, medical devices, and cosmetic medicine.

Last Winter, cosmetic manufacturer, Jan Marini, was forced to pull a similar product off the market by the FDA because (as I understand it) they 1) didn't have FDA labeling approval to promote themselves for that indication, 2) didn't have any clearance to sell a prescription glaucoma drug (which was the active ingredient) over the counter, and 3) Allergan had patent rights on the substance that was the active ingredient. Talk about ballsy! A blurb last winter from the "Truth in Aging" blog about this can be read here.

I guess I must just have the "vision" thing for this sort of product as I kind of shrugged my shoulders when I heard about it before. However, pre-market surveys indicate there is a BIG market for it, and the price of this product is going to be fairly low. Expect every Tom, Dick, & Harry fringe aesthetic medical provider to be pushing it I predict.

Rob

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I saw a really interesting analysis of the stock prospects of several of the major cosmetic medicine & Plastic Surgery industry companies on The Street.com, specifically the heavy hitters Allergan-Inamed, Mentor, & Medicis are all spotlighted, each incidentally is up ~10% for this year.

There are a lot of competing products hitting the market as Allergan's new injectable filler, Juvederm tries to unseat the popular Restalyne (from Medicis). Likewise, Medacis' Reloxin (a drug similar to Botox) should hit the market in the US next year. Hopefully that will lower the price of some of these injectables.

Things are set to heat up in the US implant market with the recent silicone implant reintroduction. The article writes,

"Allergan and Mentor are the dominant players in this $500 million to $600 million global market segment. Most analysts expect 30% to 40% first-year conversion rates of the saline-implant market, but early gains may be greater, as a result of pent-up market demand. The anticipated switch to more profitable implants supports a strong revenue outlook and further margin upside for these two players in '07."

I personally think an estimate of 30-40% market share for silicone is on the low end talking to other surgeons. Meanwhile, my savvy Plastic Surgery stock-pick of Ivivi is now sitting a full 10% below it's IPO price. I guess my kids will be going to state instead of Princeton :)

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