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3/23/2009
PREVIEW-Medicis Botox rival likely to clear FDA hurdle in H2
Reloxin approval may be delayed by a quarter or more
PREVIEW-Medicis Botox rival likely to clear FDA hurdle in H2

BANGALORE, March 17 (Reuters) - Medicis Pharmaceutical Corp's (MRX.N) would-be competitor to Allergan Inc's (AGN.N) popular anti-wrinkle treatment Botox could be delayed as regulators seek more information, but analysts have no doubt it will be approved before too long.

They still see approval coming later than a planned regulatory action date, despite the results of a U.S. study involving 1,502 people released Monday that showed the drug Reloxin reduced forehead wrinkles with few side effects.

"We expect a complete response letter, and I think it is going to follow a similar path to what we saw with Ipsen's Dysport," Leerink Swann analyst Gary Nachman said. "It is not delayed because of any data problems -- it just has to do with getting the REMS program in order."

An REMS, or Risk Evaluation and Mitigation Strategy document shows how a company plans to track the use of a product in order to avoid abuse.

French drugmaker Ipsen's (IPN.PA) Dysport -- a botulinum toxin developed as a treatment for muscular spasms and the therapeutic version of the aesthetic drug Reloxin -- was held up for approval in December.

In January, the U.S. Food and Drug Administration pushed back to April 13 the deadline for action on marketing approval of Reloxin. Medicis holds the rights to sell the drug in the United States, Japan and Canada.

Though Medicis said it still expects "rapid approval" for the drug, analysts are now looking for it to come in the second half of 2009, possibly in July or August, given that Ipsen would already be working on similar documentation for the drug's twin. "In all likelihood (Ipsen) either has a plan developed or they are very close to having a final plan developed. That bodes well for the cosmetic side," Thomas Weisel Partners analyst Aaron Mishel said.

Risks to Medicis get amplified if Reloxin gets delayed by six to nine months from the April deadline, as generic threats to the company's key product, Solodyn, inch closer.

In December, Medicis settled a lawsuit it filed against Impax Laboratories Inc IPXL.PK related to the Solodyn patent. The agreement allows Impax to launch generic versions of the acne drug as soon as November 2011, in exchange for royalties.

"The FDA's Orange book has the patent expiring at February 2018, but apparently it is not a controlling patent, so the generics have found a way to circumvent it," Credit Suisse analyst Scott Hirsch said.
Strong marketing by Medicis could deliver a blow to Allergan in a shrinking aesthetic-products market, by eventually grabbing about 20 percent to 30 percent of Botox's market share.

Analysts expect Reloxin to bring in between $25 million and $50 million in the second half of 2009, while Botox sales totaled $1.31 billion in 2008.

Medicis is expected to launch the injectable drug at a discount to Botox, but Allergan could counter through rebates and coupons and by bundling its diverse aesthetic products into value-added packages for customers.

"This is an area that is very responsive to marketing," Credit Suisse's Hirsch said.

A slight difference in the end results of the treatment would not matter nearly as much as pricing and marketing, Hirsch said.

Leerink Swann's Nachman sees Reloxin being launched at a discount of 15 percent to 20 percent to Botox.

"We know that Reloxin works very quickly and has a lasting effect, and the market will have to tell us if those are important characteristics relative to Botox," Medicis Chief Executive Jonah Shacknai said in an interview in January. (Editing by Anthony Kurian)

http://www.reuters.com/article/marketsNews/idINBNG...

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