Allergan Inc. (AGN) recently received a major boost with the US Food and Drug Administration (FDA) approving Botox for the treatment of neurogenic overactive bladder. The drug can be used in adults with a neurologic condition like spinal cord injury or multiple sclerosis, who have not responded adequately to, or, are intolerant to anticholinergic medication (current standard of care).
Allergan’s supplemental Biologics License Application (sBLA) for Botox for the said indication was supported by data from two late-stage trials. The trials demonstrated that patients who were treated with 200 units of Botox experienced significant reductions in the frequency of urinary incontinence episodes within two weeks, compared to placebo, and about 20 fewer urinary incontinence episodes in the sixth week versus placebo.
We note that neurogenic overactive bladder is the seventh indication for which Botox has received approval in the US. The last was in October 2010, when the regulatory body approved Botox for the treatment of chronic migraine headache in adults. The other uses of the drug comprise treatment of increased muscle stiffness in elbow, wrist, and fingers in adults with upper limb spasticity; treatment of abnormal head position and neck pain that happens with cervical dystonia in patients aged 16 years and above; and treatment of certain types of eye muscle problems (strabismus) or abnormal spasm of the eyelids (blepharospasm) in patients aged 12 years and above.
Botox is also used to treat the symptoms of severe underarm sweating in adults. Additionally, Botox Cosmetic is used to temporarily improve the look of moderate to severe frown lines between the eyebrows (glabellar lines) in adults.
We view the approval of Botox for the treatment for neurogenic overactive bladder as a major positive for Allergan, which is currently facing significant challenges due to global economic weakness, European pricing pressure, US healthcare reform, safety issues surrounding the use of Botox, and increased competition.
We note that Botox, which faces fierce competition in the US from Medicis Pharmaceutical Corp.’s (MRX) Dysport, posted sales of $418.4 million in the second quarter of 2011, reflecting a year-over-year increase of 16.1%. Further, for 2011, Allergan expects Botox sales to range between $1,550 million and $1,590 million.
We currently have a Neutral recommendation on Allergan. The stock carries a Zacks #2 Rank (Buy rating) in the short-run.
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