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Allergan to pay up to $375m for SkinMedica’s skincare business

Boosts aesthetic products division, which already includes Botox

Allergan Botox

Allergan will acquire the skincare division of SkinMedica in deal worth up to $375m, boosting its existing aesthetic skincare business, which includes wrinkle treatment Botox.

As part of the agreement, Allergan will pay $350m upfront to take control of the unit, which markets both prescription and non-prescription products for skin conditions.

Allergan could also pay SkinMedica a further $25m depending upon the sales performance of the acquired products.

SkinMedica's other division, the make-up line Colorescience, will be spun out as an independent company.

David Pyott, Allergan's chair, president and CEO, explained that the deal fits with the company's ambitions in the aesthetic skincare market.

He said: “The acquisition of SkinMedica will nicely complement our existing facial aesthetics business, which includes products such as Botox cosmetic, Juvederm [for facial wrinkles] and Latisse [to aid eyelash growth], and will enable us to take a leadership position in the growing 'physician dispensed' topical aesthetics skin care category.”

In its third quarter results, Allergan said it expects Botox to record net sales between $1.76bn and $1.80-bn during the whole of 2012, while Latisse is expected to make about $100m.

Once the SkinMedica acquisition is completed, Allergan will be able to add prescription products such as Vaniqa (eflornithine hydrochloride), for the reduction of unwanted facial hair in women, to this portfolio.

In addition, Allergan will also acquire non-prescription products, including TNS Essential Serum and TNS Recovery Complex.

Allergan says it intends to operate SkinMedica as a distinct business, with Bob Rhatigan, who currently serves as Allergan's senior VP of facial aesthetics, set to assume the role of senior VP, general manager and CEO, SkinMedica.

SkinMedica's current CEO Mary Fisher, will join Allergan and assist Rhatigan during the integration period of the acquisition.

Both companies' salesforces will continue to represent their respective product lines “over the near term”, said Allergan, although once the acquisition is completed, a larger and combined SkinMedica salesforce will assume responsibility for the mutual line of topical aesthetic skincare products.

19th November 2012

From: Sales

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