Pfizer's Inversion Of $160 Billion Allergan Deal Called Off

Pfizer terminated it's $160 billion agreement to aquire Botox marker Allergan.

It's something of a victory for lawmakers looking to stop corporate mergers designed to reduce taxes in the US. It would have cut Pfizer's tax bill by 'relocating' the company to Ireland where Allergan is registered.

In backing out of the deal Phiser will have to pay Allergan up to $400 million for it's expenses according to the merger aggrement. (Who negotiated that?)

The Treasury Dept. also implement a new rule that does not allow stock accumulated through a foreign company's U.S. deals in the last 3 years to count towards the "book value" needed to meet this new inversion threshold.

Pfizer + Allergan Mega-merger?

In a move driven by Pfizer Inc's desire to slash its tax bills its meregr with allergan will make it one of the worlds biggest market caps.

In a deal is expected to close in second half of 2016 The Pfizer/Allergan merger is likley the largest merger in the health care sector.

As part of an effort to reduce its corporate tax rate from 40 percent to 12.5 percent, Pfizer is negotiating to buy Allergan Plc. in a $160 billion dollar deal.  Operating under the new name of Pfizer Plc Ian Read will remain Chief Executive Officer, while Allergan's CEO Brent Saunders remain in a senior role focused on operations and the integration. Current Pfizer shareholders will receive one share of the new company for each share they own.

Beyond the issue of tax rate reduction, Read also cites greater financial flexibility that will facilitate continued discovery and development of new drugs, direct return of capital to shareholders, and continued investment of about $9 billion dollars in the United States; all of which would make Pfizer more secure in an increasing competitive market.

It all sounds great, so why the discussions and debates?  The acquisition, shifts Pfizer's headquarters to Ireland, resulting in the largest relocation of a U.S. company re-locating production overseas. This relocation explains, in part, the expected tax benefit.

As you can imagine, in an election year, this has added fuel to a roaring fire. President Obama called the move unpatriotic while Democrat presidential candidate Hillary Clinton vowed to push for measures to prevent such deals. The move was also slammed by Republican Presidential candidate Donald Trump, saying that such move was disgusting considering the potential job losses.

Job losses aren’t the only issue however; investors had hoped Pfizer would sell off the lower-margin business in 2017, a move now put off by the time required to integrate Allergan. However, after completion, Pfizer will be the fourth largest market cap company in the world. No wonder everyone’s talking.

Read more at Reutershttp://www.reuters.com/article/2015/11/24/us-allergan-m-a-pfizer-idUSKBN0TB0UT20151124#yS4ozV636BhWJ42T.99

Juvederm Ultra XC: Year-Long Lip Fillers

The US FDA has approved Allergan's JUVEDERM® ULTRA XC for the injection into the lips and perioral area for lip augmentation in adults over the age of 21.

Allergan's trials show that results last up to a year in the lips, but as always, there are two sides to the coin.

Since 2006, Juvederm formulations were already FDA approved for correction of moderation to severe facial wrinkles and folds such as parentheses lines around the nose and mouth. Then in 2013, the Juvederm XC for age-related mid-face volume loss was introduced.

Clinical trials for Juvederm revealed that 79% of subjects showed an improvement in lip fullness three months following the treatment. More than 78% of the subjects reported an improvement in their overall satisfaction with the smooth and natural look and feel of their lips at one year after treatment.

Executive Vice President & President, Allergan Medical Philippe Schaison said that:

As the leader in medical aesthetics, Allergan is committed to continued research and development in this area. Providing physicians and patients with premium products that allow them to achieve the aesthetic results they want is always our goal. Understanding that the desire with lip augmentation is to achieve a natural-looking and lasting result, we continued our research of JUVEDERM® ULTRA XC for the lips. With this approval, JUVEDERM®ULTRA XC is now the only filler that is approved to last up to one year in the lips while providing natural-looking results.

Juvederm Ultra XC contains a smooth gel formulation of modified form of hyaluronic acid (HA) and a small amount of lidocaine. The hyaluronic acid helps the skin to maintain its moisture and softness and the lidocaine acts as a local anesthetic to improve the comfort of the injection.

While the increase in the time between injections is going to be welcomed by patients, there are some physicians and clinics that might lose income since patients are not coming in as frequently. Additionally, these longer fillers might not be appropriate as a "first-time" filler for patients who are unsure if thy're going to love the effect. There's a big psychological difference between living with a change for a few months and an entire year. Still, the general increase in lenght is a good thing for clincs and patients who are familiar with the effects.

Yep, There's An App For That

Botox marketing via the iPad?

Allergan has just released an app that markets Botox directly ot patients with an app that digitally modifies what they will look like after Botox. (Who knows if it actually works at all.)

It’s pretty simple. You can either upload your photo to the iVisualizer Tool on the Botox site, or you can use the free iPad app, and watch the results emerge. Voila, a wrinkle-free face.

Those of you who are familiar with photo retouching programs, like photoshop, can see that the “after” effect is pretty much just a bit of softening and blur where the facial lines were, but, perhaps it does give patients a better idea of where the wrinkles will be diminished. 

I'm guessing that you'd have to be a pretty hard core Botox researcher to download an app just to blur your face so I'm guessing that the real driver of apps like this is to extend Allergan's marketing reach to physicians and give the sales reps someting to trot out when they visit your office to show you how much traffic Botox is driving to your clinic. That, and keeping Botox's copetitors (Myosport, Xeomin) chasing them.

Anyone have thoughts on how well this really works?

Add Allergan's Brilliant Distinctions Program To Your Website's Social Media Buttons

What is the Allergan Brilliant Distinctions Program?

Brilliant Distinctions (BD) is a frequent user program by Allergan for their products of Botox, Juvederm, Latisse and their skin care line. This program gives the patients coupons and rebates. Many practices in the US who inject Botox have the opportunity to join this program. Your Botox/Allergan representative would have more information. In my location, Brilliant Distinctions is well utilized.

New Patients look for Brilliant Distinctions

I have also found that when experienced Botox and Juvederm patients move to my area, they sometimes come armed with Brilliant Distinction discounts which they would like to use. They have called my office asking whether we take Brilliant Distinctions  These patients usually come from different states, and the transition process is painless. We just need their name, zip code, and birthdate. With that information, the patients can use their points and earn new ones at our practice. With any patients who have somehow created multiple accounts, a quick call to the toll free hotline provided by Brilliant Distinctions usually solves the problem.

Creation of the Brilliant Distinctions Button 

I thought it would be useful to create a button that goes along with some of our social media buttons. I presented the idea to Allergan, and they actually helped me create some of their logos that matched the size of frequently used social media "buttons." By buttons, I mean those icon or logos that represent Facebook, Twitter, YouTube, etc. I have had links from my website before to Brilliant Distinctions, but they were big clunky pictures, and I've never matched it up on the page with the Facebook or Twitter logos. I asked Allergan about the idea and they sent me basic BD logos to work with. I spent some time trying to make these logos match, and I've shown them to Allergan.  Allergan has a section on their website for physicians which has logos to use on their websites, but when I contacted them, they didn't have ones of this design. I thought I'd share these logos with you so you can put them on your websites yourself or have your trusty webmaster do it if you like the idea.

Please feel free to copy the Brilliant Distinctions Buttons (ie. Right click/save-as). 

I've seen many beautiful websites out there with beautiful social media buttons. Now you can also add a matching BD logo to the collection.

I made a website displaying the logos that Allergan and I tweaked to match most common social media buttons which are already used on many plastic surgery, dermatology, and aesthetic websites.

Botox: Allergans (Still) Big Seller

Every successful cosmetic clinic that I know of is a big consumer of Botox by necessity. Medspas, derms, clinics and in many places dentists offer Botox and move a lot of it.

Here's a really good artitlce on how Allergan has positioned Botox to be a really stable source of income over the long term.

Via CNN Money

Alergans Survival Strategy: Botox Everlasting

Most big, mainstream pharma companies are desperately working to develop new expensive drugs and filing lawsuits to extend patents on old ones. But to dodge that deadline, Allergan is using another strategy; let’s call it the “stay small and make weird products” approach.

The company behind Botox, the “face-lift in a bottle,” is itself aging rather gracefully. Net sales increased by 13.3%, to roughly $1.3 billion, in the first quarter of 2011 compared with the same period last year, and the company has given analysts no reason to think it won’t put together a string of good quarters.

That’s because Allergan’s product portfolio is looking first class: “We believe Allergan has one of the most compelling growth profiles in specialty pharma,” a May report by Piper Jaffray analysts David Amsellem and Michael Dinerman said. But pharma companies need more than a good growth strategy, says Ken Cacciatore, an analyst with Cowen Group. They should also develop new products and have plans to keep the patent rights for the ones that they already have. “That’s really the holy grail of pharmaceuticals,” he says, “and Allergan has it.”

The holy grail

A huge part of Allergan’s patent-cliff immunity is its blockbuster Botox, which has helped the company evade the patent problems facing others in the industry in two ways: First, Allergan has continued to discover new applications for it. “Really, Botox is a Russian doll,” says Allergan CEO David Pyott, because Allergan keeps discovering new uses stacked inside the original treatment.

Second, Botox is also a special pharmaceutical because of the way it’s made. “It’s going to be very difficult for anyone to get a truly substitutable product through the FDA,” says Cacciatore.

That’s because Botox is something called a biologic, which means it isn’t man-made. Instead, Botox is created by making a solution that contains trace concentrations of the deadly botulinum toxin. Botox works in both the medical and cosmetic arenas by temporarily paralyzing targeted muscles. For example, Botox injections into the eye muscles can help patients suffering from a condition called strabismus, in which their eyes are misaligned. In a more vain vein, cosmetic Botox reduces the appearance of wrinkles in the forehead by numbing facial muscles so that they can’t contract to form creases.

Allergan and doctors have found muscle paralysis can be useful in other places: Allergan plans on getting Botox approved to treat patients with neurogenic detrusor overactivity, or overactive bladders, this year. Last year Botox was approved to treat chronic migraines, which is one of Allergan’s most promising markets, according to Ben Andrew, an analyst from William Blair & Co. Botox has the potential to be the first treatment of its kind in that space, he says, because it’s preventive: “Every other FDA-approved product is used in response.”

Botox’s success as a treatment for chronic migraines could surprise the market, according to Gary Nachman, a senior analyst in specialty pharmaceuticals with Susquehanna Financial Group: “You’re looking at a potentially huge blockbuster that people are really not giving them full credit for.”

Product diversity

Allergan is unique, says Lavin, because it has positioned itself well in three distinct sectors: ophthalmology, obesity, and cosmetics, all of which target the aging, sedentary population of U.S. consumers. “I think of aging and obesity as two areas I’d like to invest in,” he says.

Allergan can develop in seemingly strange sectors because of its relatively small size. It has a market cap of about $25 billion, compared with, say, J&J (JNJ, Fortune 500) and Novartis (NVS), which have market caps of $183 billion and $145 billion, respectively. “A company like Allergan still has a small enough base revenue that incremental hundreds of millions matter,” says Cacciatore. “Large pharma companies have consolidated themselves into a box where they need incremental billions.”

Allergan’s growth strategy allows it to invest in niche markets heavily enough to be a persistent threat to much larger companies. It’s a phenomenon that CEO David Pyott enjoys: “I remember years ago when I was relatively new at this job, and people said, ‘Do you really think you can compete against Pfizer in ophthalmology?’ We’d just smile and say, ‘We love taking market share from those guys.’ ”

Method to the madness

Allergan’s portfolio looks bizarre at first glance, but there is a pattern to much of its drug development.

Take Latisse, for example. Allergan researchers noticed that patients using its glaucoma treatment Lumigan were also growing longer lashes. The company then conjured up a medical condition, hypotrichosis, or inadequate eyelashes, to pair with its newly made drug. Allergan essentially created the market for Latisse, which was approved by the FDA in 2008. The company expects to make over $500 million from Latisse — again, a drug it had already invented and released as Lumigan.

Latisse is just one example of how Allergan aims to keep improving its own technology to discover new drugs, renew patents for existing ones, and find new uses for both. Pyott says he has overseen the growth of the company’s research and development budget from $80 million when he joined 10 years ago to $800 million this year. That’s about 16% of total sales that Allergan plows back into R&D.

Dysport hasn't really made a huge difference and for most medspas or clinics it's certainly still playing second-fiddle. )I'd be interested if anyone has information they could add as a comment as to exactly where Dysport sits as a percentage of market share right now.)

Allergan Shifting Headache Sales Reps to Botox

Allergan sales forces previously working on GlaxoSmithKline headache drugs Imitrex and Amerge as part of a co-promotion will be reassigned to Botox, in support of the drug's new headache indication.

The move,  confirmed by a company spokesperson,  gives Allergan a jump start with headache specialists, since the GSK co-promotion deal was “a very good way for Allergan to learn the headache market,” Allergan CEO David Pyott told the Journal. Crystal Muilenburg, a spokesperson for Allergan, says that sales forces will initially target neurologists, pain, and headache specialists, to train them on Botox's “injection protocol and dosing regimen.” Muilenburg declined to estimate the number of reps that will support the headache indication, which received an FDA green light on October 15. GSK drugs Imitrex and Amerge have lost patent protection.

A key challenge that we started addressing immediately upon FDA approval is reimbursement,” said Muilenburg. “As with many new drugs, reimbursement is not widely established for Botox in this new therapeutic category.”

Physicians or patients looking for information on reimbursement can visit a dedicated website, call 1-800-44-BOTOX (option 4), or locate a Botox reimbursement business manager for “on-site education, training, and support,” according to the website. Physicians can also sign up to receive forthcoming treatment records and case studies on the headache indication, as they become available.

Allergan paid $600 million to settle Justice Department charges of off-label marketing in September, and pled guilty to marketing Botox off-label for conditions including headache. As part of the settlement, Allergan was forced to drop a First Amendment lawsuit challenging FDA policy on the exchange of “truthful scientific and medical information,” a spokesperson reported at the time. The pending approval in September of Botox for an ailment that previously existed as an off-label use sparked rumors about a relationship between Allergan's lawsuit and FDA's approval of the headache indication, rumors which Muilenburg quelled: “The FDA granted approval of Botox for the treatment of chronic migraine patients based on two phase III pivotal trials, and on its own merit,” she said. “The two actions are completely separate matters.”

Botox's headache indication, specifically, is for the prophylaxis of headaches in adult patients with chronic migraines. GCI Health has been awarded the PR account for the indication. Muilenburg declined to reveal other agency partners for the headache indication launch.

Allergan Starts Trials for Hair-Growth Treatment

Botox maker Allergan is about to launch clinical trials of a hair-growth treatment similar to its drug Latisse, which stimulates the growth of eyelashes.

The Phase 1 trial, scheduled to start this month, will focus on the safety of two formulations of bimatoprost, which is the active ingredient in Latisse.

This phase of the trials will include a total of about 28 patients — men with moderate male-pattern baldness and women with moderate female-pattern hair loss.

The FDA approved Latisse as a treatment for eyelashes, with a warning that it can cause hair growth on other parts of the body that come in contact with the drug.  Some doctors have already tried using Latisse as an “off-label” treatment for hair loss.

Hair-restoration expert Dr. Alan Bauman of Boca Raton, Fla., reported “modest hair growth” among patients who have been applying Latisse daily to their scalp.

Irvine-based Allergan might want more impressive results than that in order to make its hoped-for baldness remedy more commercially successful.

Bauman predicted that “Allergan will likely test a stronger concentration for the use on the scalp than the 0.03% bimatoprost found in Latisse.”

If Phase One (safety) trials are successful and Phase Two and Three trials (efficacy) are eventually completed, bimatoprost could become the third FDA-approved drug for the treatment of baldness in men and only the second FDA-approved drug for women with hereditary hair thinning or female pattern baldness,” Bauman said. Those conditions affect an estimated 60 million-100 million Americans, he said.

The clinical trial will be run out of Tempe, Ariz.  It is scheduled to be completed in February.

Allergan: $600 Million Poorer, but Closer to New Botox Uses

Sounds like Allergan may have been getting a little greedy and got busted....

Allergan, the maker of Botox, will pay $600 million in fines and civil settlements after pleading guilty to marketing their product for uses for which it hasn't been FDA approved.

The Justice Department accused Allergan of encouraging doctors to use the powerful neurotoxin through kickbacks and by teaching them how to forge drug reports.

"The FDA had approved therapeutic uses of Botox for only four rare conditions, yet Allergan made it a top corporate priority to maximize sales of far more lucrative off-label uses that were not approved by the FDA," U.S. Attorney Sally Yates explained.

Botox is most famous for its use by dermatologists to temporarily diminish the appearance of facial wrinkles, but the drug, which is scientifically known as Botulinum toxin and works by temporarily paralyzing nerves, has been approved for rare conditions like eye muscle spasms since 1989.  In March, the FDA approved Botox use to treat muscle spasms in elbow, wrist and finger injuries among adults.

According to the suit, Allergan paid doctors millions and taught them how to miscode the drug to avoid being caught, all so that they would use Botox for "off-label" treatments – uses for which it has never been approved, though it may be effective. Botox was promoted for migraine relief and juvenile cerebral palsy, for which observational data suggests it is effective.

When a drug has been approved for a certain medical use, it cannot be marketed to treat other uses, even if patients report those other uses as a side benefit. Still, marketing drugs for side benefits is common. In 2008, Bayer ran afoul of the FDA when it over-emphasized the acne reducing benefits of its popular birth control pill, Yaz.

Though off-label usage is legal and often beneficial for patients, it can be dangerous. In April 2009, after repeated reports of side effects among children with cerebral palsy that mimicked botulism poisoning, the FDA ordered Botox to carry "black box labeling," the strictest possible warning for a product.  Doctors reported respiratory problems, muscle weakness, loss of bladder control and double vision among their young patients, along with hospitalizations.

Currently, the FDA is reviewing Allergan's application to approve Botox for migraine headaches. The agency is not reviewing information on juvenile cerebral palsy and no known tests are in the works, though CBS is reporting that Botox is being tested in countries like India, Poland, Serbia and Turkey for a host of ailments, including Parkinson's disease, spinal cord injuries, excessive perspiration, depression and something called "curvature of the penis."

If any of these studies abroad provide conclusive data, they could potentially spur bids for approval of new uses of Botox in the United States.

Botox News: Allergans Profits Jump 36%

Botox continues to be a golden child for Allergan, but there are a number of other products that are bolstering the drug giant's sales.

Allergan, and most especially Botox, is always on my radar... Since we opened the first medical spa back in 2000, I'm sure that we've put more than one of Allergan's sales reps into a new house. (Perhaps not, I'm not really sure what Alergan's sales reps make.)

While there Medial Spa MD's physician members who are in a position to take advantage of our Select Partners have less expensive ways to get Botox than paying sales commissions, Allergan certainly still takes the lion's share of the profits from most Botox treatments that are performed. Botox has become something of a commodity, with almost every medical spa and laser clinic (and a few day spas) offering it.

For those of you who are interested in the Botox Behemeth's contnued rise, I give you the following compiled from their latest earnings report.

Allergans second-quarter earnings soared 36% with accelerating sales spurred on by their cosmetic products. There have also been recent developments that mark progress toward FDA approval to sell Botox injections to treat migraine headaches.

Allergan said the FDA has asked the company for certain material, such as a modified Botox "risk evaluation and mitigation strategy" that includes information about thepreventive treatment of migraines. Allergan has 3 months to provide the information. Allergan says it continues to expect an FDA answer this year.

Evidently wall street liked the news... especially the rising Botox sales since shares of Allergan traded up 5.4%. The company also raised its 2010 sales estimate for Botox. (Allergan posted total Botox sales of $1.31 billion last year, split evenly between cosmetic usage and various medical treatments.)

Allergan's total revenue rose 10% to $1.25 billion with double-digit gains in both its specialty pharmaceutical and medical device businesses. (Facial aesthetic products wer up 32% and skin-care products up 40%.)

Allergan's second quarter "benefited from a continued recovery in our cash-pay aesthetics business around the world," said Pyott said in a company press release.

Botox sales rose 7% in the quarter to $360.5 million. Looking ahead, Allergan said it now believes the drug will post sales of $1.36 billion to $1.39 billion this year, which compares with a forecast in February for $1.33 billion to $1.37 billion.

It dropped its forecast for the eyelash-enhancing drug Latisse, however, to a range of $90 million to $100 million, down from February's $140 million target. A big issue is that consumers have learned to stretch their supplies, which means Allergan has to figure out how to broaden the market to offset that effect.

Allergans Outlook For the full year of 2010

Total product net sales between $4,620 million and $4,750 million.

Total specialty pharmaceuticals net sales between $3,835 million and $3,930 million.

Total medical devices net sales between $785 million and $820 million.

• ALPHAGAN  franchise product net sales between $370 million and $390 million.
• LUMIGAN  franchise product net sales between $490 million and $510 million.
• RESTASIS  product net sales between $580 million and $600 million.
• SANCTURA  franchise product net sales between $70 million and $80 million.
• BOTOX  product net sales between $1,360 million and $1,390 million.
• LATISSE  product net sales between $90 million and $100 million.
• Breast aesthetics product net sales between $290 million and $300 million.
• Obesity intervention product net sales between $235 million and $250 million.
• Facial aesthetics product net sales between $260 million and $270 million.
• Non-GAAP cost of sales to product net sales ratio between 15.5% and 16.0%.
• Other revenue at approximately $50 million.
• Non-GAAP selling, general and administrative expenses to product net sales ratio between 39% and 40%.
• Non-GAAP research and development expenses to product net sales ratio between 15% and 16%.
• Non-GAAP amortization of acquired intangible assets at approximately $20 million. This expectation excludes the amortization of acquired intangible assets associated with the Inamed, Cornéal, EndoArt, Esprit, Samil and Serica acquisitions and the ACZONE(R) asset purchase.
• Non-GAAP diluted earnings per share attributable to stockholders between $3.11 and $3.15.
• Diluted shares outstanding between approximately 307 million and 308 million.
• Effective tax rate on non-GAAP earnings at approximately 28%.

For the third quarter of 2010, Allergan expects:

Total product net sales between $1.13 billion and $1.18 billion.