Allergan Inc. (AGN), the maker of the Botox wrinkle treatment, said it’s committed to selling the company’s obesity-treatment unit in the first half of 2013 after completing a review of the business.
The unit, dominated by the Lap-Band weight loss device, has been reclassified as a discontinued operation, resulting in an unspecified charge to write down assets to fair value, Irvine, California-based Allergan said in a statement today. Chief Executive Officer David Pyott said last month he wanted to sell the business by the end of the first quarter and that the unit has attracted interest, including from a private-equity company.
The obesity unit’s sales tumbled 22 percent in the fourth quarter to $36.8 million, Allergan said today. The unit’s annual revenue has plummeted from a peak of $296 million in 2009 because of questions about the risks from the Lap-Band and lawsuits stemming from surgeries that went awry. The obesity market once generated about a third of Allergan’s U.S. sales.
“We are dynamically managing our portfolio to drive long- term sales growth,” Pyott said in the statement.
The company said it can’t estimate a range of the expected disposal loss stemming from the writedown, the company said. The Lap-Band is an adjustable silicon band that helps people lose weight by reducing the amount of food their stomachs can hold.
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