Allergan has historically had a stranglehold in the US facial injectable market, particularly in the botulinum toxin (BTX) market, where the company's BOTOX Cosmetic brand has become synonymous with the product itself. In recent years, however, it was looking like Allergan's uncontested reign was coming to an end, with a variety of new companies launching BTX and dermal filler products. In particular, Merz Pharmaceuticals was positioned as a major competitor, recently receiving approval for its Belotero Balance dermal filler and Xeomin BTX product to accompany its nonpermanent dermal filler RADIESSE. Merz Pharmaceuticals strong position in the European facial injectable market was predicted to help the company in a market share battle against Allergan.
But things took an unexpected turn in early March, when the US Federal Court placed serious restrictions on the sale of Merz Pharmaceuticals three facial injectable products in the US. These restrictions have been in response to litigation from Allergan, which claims that Merz Pharmaceuticals. US market launch benefited from access to confidential documents shared by former Allergan employees. Xeomin was hit the hardest by the restrictions, with an injunction granted to prevent the company from selling Xeomin for aesthetic indications in the US for the next 10 months (until January 2013) or until the injunction is lifted. Sales of Xeomin for therapeutic purposes were also restricted to a lesser extent (i.e., sales are banned for certain physicians in certain regions), and RADIESSE and Belotero Balance can only be sold to preexisting customers or those who specifically request the products without solicitation.
The $800 million US facial injectable market likely won't feel the effects of this injunction too much; patients and doctors will likely just opt to continue using the products that are readily available. Average selling price declines may, however, be slowed to some extent because Merz Pharmaceuticals was anticipated to offer its products at a slightly lower cost. For Merz Pharmaceuticals, this ruling will obviously have a negative impact on revenue growth although the company holds a sizeable share of the European facial injectable market, which was not affected by this ruling, the US market is much larger and more lucrative. For Allergan, the company's domination in the US remains intact unless Medicis Pharmaceutical, Allergan's main competitor, is able to make substantial headway.