Medtech Market Trends Series
AbbVie’s Acquisition of Allergan
AbbVie to acquire Allergan for $63 billion: a potential boost for an aesthetics giant
Our aesthetics experts give their take on how this move will impact Allergan and the broader market:
Why is AbbVie Acquiring Allergan?
- AbbVie’s US patent for Humira—its lucrative drug for arthritis, psoriasis, and other conditions—expires in 2023, and without a similar blockbuster drug of this magnitude in its portfolio on the horizon, the company needs to make a move to drive long-term growth.
- AbbVie’s choice of Allergan represents a step for AbbVie to reduce its reliance on Humira and expand and diversify its portfolio.
- While AbbVie is paying a premium price to acquire Allergan, the company is still a reasonably valued purchase because of a sizable drop in Allergan’s valuation from its peak 4 years ago.
- Allergan’s medical aesthetics portfolio yields an annual revenue of roughly $4.3 billion in the high-growth global aesthetics space. Its stronghold in this market mainly stems from its BOTOX product—the leading cosmetic botulinum toxin worldwide, offering Allergan significant brand value.
- Although a lower-priced, similar efficacy competing product from Evolus has been recently approved in the US and another from Revance with compelling data is on its way, BOTOX has the upper hand in terms of brand recognition and is positioned to continue to yield strong, durable growth for the company in the country over the next decade.
How Will This Impact Allergan?
- From Allergan’s perspective, this presents an opportunity to strengthen its leadership position in the quickly expanding aesthetics market and drive incremental growth by leveraging AbbVie ’s strong commercial capabilities and broad global infrastructure.
- With the resources and capabilities of its new parent company, Allergan may also be able to drive further innovation with BOTOX, including the development of new indications, formulations, configurations, and delivery technologies.
- The company could also venture into developing next-generation products in its JUVÉDERM line of dermal fillers and will be better equipped to enhance its CoolSculpting technology, with 3 upgrades—for muscle conditioning, skin tightening, and cellulite breakthrough—already planned for the next 3 years.
- Both Allergan and AbbVie also have overlap in products for treatments in women’s health, gastrointestinal diseases, and other disorders, allowing for some synergies between the two companies. Allergan also has the potential to expand its customer base as a result.
What Competitors Should Keep An Eye On
- Will this acquisition prove to be disruptive to Allergan’s business as its operations merge with AbbVie’s, and will this open up inroads for other competitors?
- How will this change Allergan’s strategic direction going forward? What implications will it have on pricing strategies and product development?
- Are other acquisitions on the horizon?
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Robert specializes in the fields of aesthetic injectables and cosmetic threads. Robert holds an Honors Bachelor's degree in Immunology from McGill University.
Additional contributors: Raghav Tangri, Diwakar Bahuguna
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