April 30 (Bloomberg) -- The Botox shot, the most popular U.S. cosmetic procedure, will soon face competition from a new wrinkle smoother.

Ipsen SA and Medicis Pharmaceutical Corp. won U.S. Food and Drug Administration approval to sell their product, Dysport, for both aesthetic and therapeutic uses, the companies said today in a statement. Like Allergan Inc.’s Botox, the new injection uses a type of botulinum toxin to relax the muscles that cause forehead lines and a neck-twisting disorder called cervical dystonia.

Almost 2.5 million Americans had Botox injections last year for cosmetic purposes, according to the American Society for Aesthetic Plastic Surgery, based in Garden Grove, California. The drug was approved in 1991 for medical uses and in 2002 as a wrinkle smoother. It became fashionable among aging celebrities as a nonsurgical way to appear younger.

“We are excited to be entering the market for the most popular nonsurgical aesthetic procedure in the U.S., and anticipate being highly competitive,” said Jonah Shacknai, chief executive officer of Medicis, in the statement.

The Scottsdale, Arizona-based company plans to start selling the drug for aesthetic uses in the U.S. within 30 to 60 days. Approval will trigger a $75 million payment to Ipsen, which developed the drug. Ipsen, based in Boulogne Billancourt, France, said it will handle sales for cervical dystonia, beginning in the second half of this year.

Medicis jumped $1.93, or 14 percent, to $15.50 at 10:28 a.m. in New York Stock Exchange composite trading, its biggest gain since March 19. Allergan rose 32 cents to $47.60. Ipsen increased 2.09 euros, or 7.1 percent, to 31.59 euros in trading in Paris.

Sales Potential

Dysport may be priced 15 percent lower than Botox, helping it take almost a third of the cosmetic market over time, said Gary Nachman, an analyst at Leerink Swann & Co. in New York, in a phone interview last month. He estimates annual sales of Dysport for aesthetic uses will be $160 million by 2012.

Nachman and other analysts had said they expected the FDA to delay Dysport approval until later this year over questions about how the company plans to track use in order to minimize risks seen with other botulinum toxins. The companies had applied to sell the drug for aesthetic uses under a separate brand name, Reloxin.

The FDA warned consumers in February 2008 that botulinum toxins may spread beyond the site of the injection and cause botulism, a potentially deadly muscle-weakening illness. The greatest risk was seen with high doses of the drug, used by some doctors to treat limb spasms caused by cerebral palsy, an approved use in many countries outside the U.S.

Risk Management

As part of a risk-management program to ensure safe use, Dysport’s prescribing information will include a boxed warning about the risk that botulinum toxins may spread, the companies said in their statement.

Botox had sales of $1.31 billion for Allergan in 2008, split between cosmetic use and treatment of neurological disorders. Allergan estimates that Botox has an 83 percent share of the global market for neurotoxins that paralyze certain muscles or nerves.

Galderma, a joint venture between Nestle SA and L’Oreal SA, has European marketing rights to a version of Dysport for aesthetic uses, called Azzalure. Medicis bought rights in 2006 to develop and sell the drug for those purposes in the U.S., Canada and Japan.

Solstice Neurosciences Inc., a closely held company in Malvern, Pennsylvania, sells a botulinum toxin called Myobloc in the U.S. for cervical dystonia.

Allergan got 32 percent of its revenue from Botox in last year’s fourth quarter. The company is cutting 5 percent of its workforce this year to brace for competition and lower demand for cosmetic procedures in the recession.

To contact the reporter on this story: Catherine Larkin in Washington at clarkin4@bloomberg.net.

Last Updated: April 30, 2009 10:31 EDT