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Allergan's Q1 Nightmare: Profit Down; Black Box Warning on Botox Vindicates an Old Nemesis; "It's All Medicis' Fault!"

It's Allergan's worst week ever: Q1 2009 net income was down 58 percent on declining Botox sales; and then the FDA gave Botox a black-box warning AND approved Medicis' competing wrinkle-killing drug, Dysport.

Allergan's response? To blame it all on Medicis in a tangled set of statements that seem designed to suggest that everything in the category was just fine until Dysport came along with its scary non-"interchangeable" botulinum toxin.

Worst of all, the FDA actions vindicate the allegations of Allergan's greatest nemesis -- Dr. Arnold Klein of Los Angeles (pictured). Klein was once a consultant for Allergan but fell out with the company and went to consult for -- you guessed it -- Medicis. (He currently works for neither.) For the last few years he has been on a one-man crusade against Allergan, alleging the very same dangers that the FDA cited in its release today.

That release warns of:

... serious risk regarding distant spread of toxin effects.
... reports of distant spread of toxin effects occurred following use of botulinum toxin for the treatment of spasticity (an unapproved use) or cervical dystonia. Some cases resulted in hospitalization, including several cases that required placement of a gastric tube or mechanical ventilation...
(Disclosure: BNET conducted a lengthy interview with Klein last October and reviewed a package of material alleging flaws in Allergan's promotion of Botox. At the time I couldn't see enough evidence to warrant publishing an item. Hey, they can't all be home runs, OK?)

Allergan's response to the FDA action was to publish two statements. Both suggest that the new warnings were triggered by Dysport and not by Botox -- even though Dysport isn't even on the market yet. One says:

Concurrently with the approval of DYSPORT(R), the FDA yesterday requested that Allergan consider certain class labeling that we assume is found in the DYSPORT(R) package insert ...
The second added:
The FDA approved the application of Ipsen and Medicis to sell its botulinum toxin in the United States for the treatment of cervical dystonia and glabellar lines, and in connection therewith required, among other things, a boxed warning ...
The FDA informed Allergan that it believed Allergan should adopt the same language on spread and non-interchangeability and a similar [risk evaluation and mitigation strategy] to that associated with DYSPORT...
Medicis, on the other hand, is conducting a genius PR game here -- by remaining almost completely silent and letting Allergan, with the big-name botulinum brand, take all the media hits. All it did was announce its product was approved. Notice in the Medicis release that the company doesn't mention the boxed warning until the last sentence of the fourth paragraph. The ploy worked -- BNET failed to notice that warning even though we wrote about the approval yesterday. Well played, Mr. Shacknai.

To add insult to injury, even Allergan's obesity intervention segment saw a sharp drop off, and its just-launched eyelash lengthener, Latisse, gained only $12 million in sales. Allergan will be seeking to cure that with an advertising campaign for the drug, according to the Orange County Business Journal.

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