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Allergan's Botox Label Expanded

Zacks Equity Research

Allergan Inc. (AGN) recently received a major boost with the US Food and Drug Administration (:FDA) approving Botox (onabotulinumtoxinA) for the treatment of patients suffering from overactive bladder (:OAB) with symptoms of urge urinary incontinence, urgency and frequency. The drug can be used in adults with OAB, 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 phase III trials. The trials demonstrated that patients who were treated with 100 units of Botox experienced significant reductions in the frequency of urinary incontinence episodes, compared to placebo.

We note that OAB is the eighth indication for which Botox has received approval in the US. The last was in August 2011, when the regulatory body approved Botox for the treatment of neurogenic OAB in adults. The other uses of the drug comprise treatment of chronic migraine headache, 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 OAB as a major positive for Allergan. However, we remain concerned about Botox’s sales post the re-entry of Merz Pharmaceuticals Xeomin in the market. In Mar 2012, an injunction against Xeomin was issued, which was valid till Jan 9, 2013.

Allergan carries a Zacks Rank #3 (Hold) in the short run. Pharma companies that currently look better-positioned include Eli Lilly (LLY), Johnson & Johnson (JNJ) and Sanofi (SNY). All three are Zacks Rank #2 (Buy) stocks.

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