Botox Refresh

Every time I see a "Real Housewives" episode, I see the future of beauty care and it starts with Botox. I will underscore the attractiveness of Allergan based on the following review.

First of all, Allergan will be able to avoid the dreaded patent cliff for Pharma companies because of the many different indications found for Botox.

"A huge part of Allergan's patent-cliff immunity is its blockbuster Botox, which has helped the company evade the patent problems facing others in the industry in two ways: First, Allergan has continued to discover new applications for it. "Really, Botox is a Russian doll," says Allergan CEO David Pyott, because Allergan keeps discovering new uses stacked inside the original treatment."

Second, Botox is a biologic, rather than small molecule therapy, and thus it is very hard for competitors to replicate without violating their patent defenses.

Third, the newest indication for Botox, prevention of chronic migranes, is the first therapy for prevention of the condition. This is a huge potential market that could lead to an additional $500m in sales for the product. Allergan also makes Latisse, an eyelash extending drug estimated to reach $500m in sales.

Essentially what distingishes Allergan is their innovation in biotech for cosmetic enhancement with mild medical applications. Allergan also has opthamology products and obesity products like the Lap Band. But those areas have not proved as profitable as the biotech area.

Overall, there is tremendous upside to Allergan. As a friend of mine Shawn said tongue in cheek, "It is the Intel of the 21st century". I am sure the "Real Housewives" would agree.

The author changed his previous order and bought AGN at $80.46.