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Inamed Board Is Asked to Reject Bid

Medicis' request is the latest move in its battle with Allergan to buy the breast implant maker.

November 23, 2005|From Reuters

Wrinkle treatment maker Medicis Pharmaceutical Corp., which is seeking to buy breast implant maker Inamed Corp. of Santa Barbara, said Tuesday that it asked Inamed's board to rally shareholders to reject a sweeter offer from Allergan Inc., the Irvine-based maker of Botox wrinkle smoother.

Investors read the move as largely procedural in the unfolding battle for control over products that erase the signs of aging.

Unless the Inamed board recommends that shareholders reject Allergan's offer by Dec. 6, Scottsdale, Ariz.-based Medicis will have the right to terminate its offer for Inamed and receive a $90-million breakup fee from that company, Medicis said.

Medicis' request to the Inamed board comes on the heels of a bid by Santa Barbara-based breast implant maker Mentor Corp. to buy Medicis. The companies are vying to bring cosmetic dermatology products and plastic surgery products together in a single market.

Piper Jaffray analyst Thomas Gunderson, who follows Inamed, said the statement by Medicis was nothing more than the company following through with its contractual obligations.

"Everybody is just doing what their lawyers are telling them to do," he said.

Analysts believe that the Medicis deal centers on control of Inamed's experimental wrinkle-smoothing drug Reloxin, a potential challenger to Allergan's Botox.

"The attractiveness to the product is it's the closest to being approved in a large, growing market that is currently defined by a monopoly with Botox," said Jayson Bedford, an analyst with Adams Harkness Inc.

Allergan is said to be more interested in Inamed's experimental dermal filler Juvederm, an injectable product designed to plump up tiny lines around the mouth and chin that would add to its cosmetic dermatology offerings.

Allergan has said it would shed Inamed's Reloxin license to minimize any antitrust issues in its proposal to acquire Inamed. That might give Medicis a second shot at gaining access to Inamed's Botox-like product if its deal with Inamed collapses.

"Medicis might just get everything they want and the $90-million breakup fee. We'll just have to see," Gunderson said.

Shares of Medicis rose 80 cents to $32.37, while shares of Inamed fell 29 cents to $83.04. Allergan's shares fell 39 cents $99.21, while shares of Mentor fell 40 cents to $50.95.

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