Medicis Squeezed in Vanity Pharma Death Match vs. Allergan and J&J
Medicis may find itself on the losing side of the vanity pharma death match now that Johnson & Johnson has waded in with what will soon be a full suite of silicone breast implants, wrinkle fillers and botulinum toxin line smoothers. J&J on Monday agreed to acquire implant maker Mentor Corp for $1.07 billion. Mentor is developing two more dermal fillers and a Botox competitor, called PurTox. Neither franchise is yet approved by the FDA. The acquisition adds to J&J's existing vanity pharma portfolio which it started in September with Evolence, a wrinkle filler.
The significance of J&J's move is that the three companies (except Medicis) now have competing products in the three major vanity pharma categories. Here's the competitive matrix:
| Company | Toxin | Filler | Implant |
| Allergan | Botox | Juvederm | Natrelle |
| Medicis | Reloxin | Restylane | None |
| J&J | PurTox | Evolence | MemoryGel |
Early signs are that Medicis is least-well positioned to win this commodity fight. It's the smallest company (it lost the Inamed breast-implant maker acquisition bidding war to Allergan a couple of years ago).
J&J is starting from furthest behind in this race. Mentor's sales are actually the only one of the three currently in decline. Here's the sales picture:
- Mentor (now J&J) Q2 2009 sales: Flat at $84 million. Implant sales declined 2 percent to $74 million.
- Allergan Q3 2008 sales: $1 billion, up 10.5 percent from $978 million. Net income was $169 million, up from 157 million.
- Medicis Q3 2008 sales: $115 million up 4 percent from $111 million. Net income was $16.1 million, down 12.2 percent from $18.4 million.
The starting gun already sounded on the race with the recession. Esthetic docs are offering price cuts just like Walmart. So the category is now experiencing a perfect storm: heightened competition at a time of slackening demand.