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HEALTHCARE

The beautiful business of Botox

A wrinkle-killing poison is key to Allergan's plan to salve the infirmities and vanities of aging.

November 26, 2007|Lisa Girion | Times Staff Writer

In his corner office, Mr. Botox looked his age.

He hadn't had a shot of botulinum toxin in a while, and the furrow between his brows was back.

"You would never know I'm really 75 years old," David E.I. Pyott said, trotting out a well-worn joke that he likes to make "because of who I am."

He's the man who made a muscle-controlling poison the most fashionable weapon against aging. And he's really 54.

When Allergan Inc. hired him as chief executive in 1998, it was generating annual revenue of $1.26 billion turning out nasal sprays, eyedrops and optical devices. It still makes eyedrops but otherwise doesn't much look like the company founded in an Irvine bean patch 60 years ago.

Now it's a $3-billion corporation with global rights to the pharmaceutical industry's first beauty blockbuster and a business plan -- based on battling glaucoma, wrinkles, obesity and incontinence -- written to fit an increasingly overweight nation packed with baby boomers.

Beyond that, Allergan has a development pipeline stuffed with potential remedies for a range of problems facing aging adults, including Alzheimer's and Parkinson's diseases. The company plows so much money into research that a few shareholders have complained.

Only a few, though. Revenue was up 34% last year; this year, as sales of Botox and most of its other products exceed forecasts, Allergan expects a 23% rise to $3.7 billion. Net income in the second quarter increased more than 40%.

"People have knocked them a little bit for spending so much" on R&D, said Gary Nachman, an analyst with Leerink Swann in New York. "But that's part of the genius."

As is Allergan's Botox promotion machine, according to doctors.

It stokes demand with slick television and magazine advertisements that share a lot with pitches for lipstick and hair color. They encourage physicians to view Botox as a "gateway drug," one that may lead patients to demand other beauty treatments, such as Allergan's Juvederm wrinkle filler, down the line. The company makes life easier for its "platinum physicians," high-volume Botox buyers, with a quick-answer telephone line to order refills and gives free advice to doctors who ask how to better run their practices.

"They are an intelligent company," said Tracy Hankins, a Las Vegas plastic surgeon with one of the biggest Botox practices in the country. "They think things through."

The company has six research centers, including one that opened in Bangalore, India, in August. At the company's 28-acre headquarters in Irvine, R&D is in a complex of airy and art-filled modern buildings so packed with laboratories, wall-size whiteboards, laptop computers and textbooks it could pass for a medical school.

Of the 2,000 local employees, "1,000 are back there in lab coats," Pyott said, waving his hand toward the hub of discovery and development behind the brown brick office tower where he works. At Allergan, he said, "research is the motor."

The company's strain of botulinum toxin is still an R&D focus, even though, with more than 1,500 articles in medical and scientific journals devoted to it, the neurotoxin protein, highly poisonous in larger doses, is already one of the most researched medicines in the world.

No matter. Pyott said he expected the company to continue "chasing the doctors" -- developing and winning approval for new uses. As it is, Botox sales for aesthetic and therapeutic applications far exceed those of any other Allergan product, surpassing $1 billion last year and accounting for one-third of revenue.

Discovered in 1895 and approved in the U.S. as a cosmetic treatment in 2002, botulinum toxin isn't rare. The company makes a year's worth of Botox out of a single gram. The purified product is vacuum-sealed in clear, 100-unit vials that are shipped to physicians who pay $505 per vial and reconstitute the Botox with saline.

At 4 million injections a year and growing, the fountain of youth in a syringe is more than a cash cow. It's a market creator. The wrinkle buster triggered a revolution in cosmetic medicine, driving it out of the operating room and into the doctor's office, the spa and the mainstream.

"In the old days, if you lived in Cedar Rapids [Iowa] you'd have to drive a long way to get it," Pyott said. "Now there's somebody who can do it in every small town."

In addition to dermatologists and plastic surgeons, gynecologists, general practitioners and others offer Botox. At up to $500 per wrinkled brow, Botox makes a tidy annuity for physicians because patients must return about once a quarter to maintain their smoother appearances.

The company acquired its strain of botulinum toxin in 1988 from a physician who had developed it to treat crossed eyes and a disabling blinking disorder. The toxin relaxed the overactive muscles that caused them.

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