Botox Migraine Approval May Gain Allergan $1 Billion in Sales
Allergan Inc. won U.S. regulatory approval to sell its wrinkle-smoother Botox as a treatment for chronic migraine headaches, an action that may help almost double the drug’s annual sales to $2.3 billion.
Allergan, based in Irvine, California, gained $3.75, or 5.5 percent, to $72.61 at 4:01 p.m. in New York Stock Exchange composite trading, for its biggest single-day increase in 11 weeks. The approval, announced by the company on Oct. 15, came 10 days after Allergan pleaded guilty to charges it marketed Botox for unapproved uses, including pain.
The drug, a purified form of the poison botulinum, is given as an injection. It was cleared for those who have migraines at least 15 days a month, and whose pain lasts at least 4 hours, said Caroline Van Hove, an company spokeswoman, in a telephone interview yesterday. Botox, which generated $1.3 billion in 2009 sales, may add $1 billion more in yearly revenue with the migraine indication, said Aaron Gal, a Sanford C. Bernstein & Co. analyst in New York, in a May report.
“This is the most meaningful market expansion that the product has had since it was approved for cosmetic use” more than 20 years ago, said David Amsellem, an analyst with Piper Jaffray & Co. in New York who rates the shares “overweight.”
Allergan shouldn’t have difficulty getting insurers to cover the drug since “this is a population that hasn’t responded to any of the conventional treatments,” Amsellem said in a telephone interview yesterday. “I would imagine that they will not have problems with managed-care access.”
About 3.2 million Americans meet those criteria, Van Hove said. Migraines are painful headaches that can last 4 to 72 hours, with symptoms that include sensitivity to light, noise and odors, according to the National Institutes of Health, in Bethesda, Maryland.
Cleared for migraines in the U.K. in July, Botox works by blocking nerve connections. Allergan expects the injection will also be approved this year in other parts of Europe, and in Canada, Van Hove said.
“Chronic migraine is one of the most disabling forms of headache,” said Russell Katz, director of the Food and Drug Administration’s division of neurology products, in an Oct. 15 statement. “This condition can greatly affect family, work, and social life, so it is important to have a variety of effective treatment options available.”
Justice Department Allegations
Allergan on Oct. 5 settled a 2 1/2-year investigation of its Botox marketing that analysts said held up FDA approval for the migraine treatment.
Allergan was ordered by a judge to pay $375 million to resolve Justice Department allegations it promoted Botox for headache, pain and juvenile cerebral palsy from 2000 to 2005 without U.S. approval.
The plea was approved by U.S. District Judge Orinda Evans in Atlanta. It includes a $350 million criminal fine and $25 million in forfeited assets, the Justice Department said.
The company also agreed to a five-year compliance plan requiring it to disclose payments to doctors on its website and provide annual certification by senior executives and board members that divisions meet federal health-care requirements.
Patients with chronic migraines who took Botox had 7.8 fewer days per month with any headaches, including migraines, compared with 6.4 fewer headache days on placebo, according to a company-funded study released last year.
In separate research, patients getting Botox had 9 fewer days of headaches a month, compared with 6.7 fewer on a placebo.
To treat migraines, Botox is given every 12 weeks in multiple injections around the head and neck to reduce future symptoms, the FDA said. The drug hasn’t been shown to work for other types of headaches, or for migraines that occur less frequently than 15 days a month, the agency said.
The FDA last year ordered manufacturers of all botulinum products to strengthen warnings that the toxins may cause muscle weakness and life-threatening breathing or swallowing difficulties if the poison spreads beyond the injection site.
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