Medicis Ups Its Vanity Offerings

PHARMACEUTICALS

Medicis Pharmaceuticals, a specialty drug company that in recent years has expanded into aesthetic skin enhancement, broadened its portfolio again last week by agreeing to acquire Inamed, a breast implant and obesity treatment device firm, in a stock transaction valued at $2.8 billion.

The deal, which will create a company with annual sales of more than $700 million, spotlights the market for lifestyle or vanity drugs and treatments.

Medicis CEO Jonah Shacknai says the merger "will create a global platform in the fast-growing aesthetics market," which is driven by "the large number of aging baby boomers and the focus, by all age groups, on maintaining a healthy and youthful appearance and self-image."

Medicis, which originally concentrated on acne and antifungal treatments, made its first major foray into the aesthetics market with the 2003 acquisition of Restylane, the leading dermal filler, from the Scandinavian company Q-Med.

Inamed also markets a hyaluronic acid filler, similar to Restylane, manufactured by Genzyme. According to Julie Schumacher Hoggatt, a stock analyst with Hibernia Southcoast Capital, the Federal Trade Commission is currently investigating whether facial therapy is defined as a single market that includes Botox, the botulinum toxin nerve blocker sold by Allergan, and dermal fillers. If FTC sees separate markets, Hoggatt says, Medicis and Inamed may have to divest some dermal filler products.

According to James Canton, founder of the Institute for Global Futures, Medicis' push into aesthetics is part of a megatrend in the life sciences. Canton sees the convergence of baby boomers with trillions of dollars to spend, a societal drive to reverse the aging process, and technological innovation creating "a perfect storm" that will quadruple the market for lifestyle therapies and surgery to nearly $100 billion in 10 years.