The Federal Trade Commission yesterday announced a settlement that will allow Allergan, Inc., which markets Botox, and Inamed Corp., a potential Botox competitor, to merge. Allergan markets the only FDA-approved botulinum toxin for the treatment of facial wrinkles in the US; Inamed has a rival product that is in Phase III of clinical trials with the FDA. According to the FTC, Allergan's $3.2 billion acquisition of Inamed would have violated the antitrust laws because it would have eliminated the next likely entrant to the US market.
The FTC's complaint alleges:
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that cosmetic botulinum toxin, which is used to treat facial wrinkles caused by repetitive muscle movement, has a "unique mechanism of activity" that differentiates it from other cosmetic products and procedures;
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that cosmetic botulinum toxin has no close substitutes and therefore constitutes a relevant product market;
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that the relevant geographic market is the US;
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that Allergan's cosmetic botulinum toxin, Botox, dominates the US market because it is the only one approved by the FDA;
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that Inamed is on the verge of obtaining FDA approval for its cosmetic botulinum toxin, Reloxin;
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that other potential entrants lag well behind Inamed; and
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that Inamed is an imminent competitor whose acquisition by Allergan would have caused significant harm to US consumers.
To address the concerns alleged in the complaint, the parties agreed to return the development and distribution rights of Inamed's Reloxin to the company from which it purchased them, Ipsen Ltd. The Decision and Order includes the details of how and when the divestiture must be implemented.
