Bo­tox boom

Bo­tox man­u­fac­turer Al­ler­gan has seen cos­metic use of the toxin shrug off the re­ces­sion, but now its po­ten­tial for ther­a­peu­tic treat­ments such as mi­graine and mul­ti­ple scle­ro­sis has made the firm ‘ec­static’.

The Star Malaysia - Star2 - - HEALTH - By LISA O’CAR­ROLL

THE land­scape around the west coast of Ire­land is breath­tak­ing enough to wipe years off fur­rowed brows. But it is not the rugged Ir­ish scenery that has changed the face of the beauty in­dus­try. It is a pris­tine-look­ing glass-walled fac­tory set in 12 hectares out­side the pic­turesque town of West­port in County Mayo, which pro­duces the en­tire world’s sup­ply of Bo­tox.

Kylie Minogue has ad­mit­ted us­ing it, as have Geri Hal­li­well, Courteney Cox, and Jen­nifer Anis­ton, but it is no longer just celebri­ties look­ing to iron out the wrin­kles in their fore­heads.

Since it be­gan pro­duc­tion in 1990, the fac­tory has pumped out more than 26 mil­lion phials of the chem­i­cal oth­er­wise known as Bo­tulinum toxin a, gen­er­at­ing £500m (RM2.5bil) a year for the phar­ma­ceu­ti­cal firm Al­ler­gan. In 2009, at the height of the re­ces­sion, the com­pany re­ported 8% earn­ings growth.

What makes in­vestors “rather ec­static”, says the chief ex­ec­u­tive, David Py­ott, is that Al­ler­gan has grown from a com­pany that re­lied on “purely re­im­bursed” busi­ness from hos­pi­tals and clin­ics to one that in­cludes a boom­ing cash busi­ness of pri­vate clients who use Bo­tox and other med­i­cal aes­thetic treat­ments un­der the Al­ler­gan um­brella, in­clud­ing der­mal-fillers, breast implants and gas­tric bands. The wealthy al­ways want to look beau­ti­ful.

“Even in the depths of the re­ces­sion, the first half of 2009, the world mar­ket (for Bo­tox) only de­clined 9%,” says Py­ott. “In the re­ces­sion men have spread out their treat­ments (from ev­ery three months to four months) and women have fewer things done.”

The Bo­tulinum toxin, which is pro­duced by the bac­terium Clostrid­ium bo­tulinum, works by tem­po­rar­ily paralysing key mus­cles in the fore­head. Py­ott, 55, a Scot with a smooth-look­ing fore­head, leads by ex­am­ple and uses it him­self.

But it isn’t the beauty treat­ment that has the com­pany so con­fi­dent about fu­ture growth. It is all its other less sexy ap­pli­ca­tions for Bo­tox – 20 of them in to­tal, in­clud­ing the re­cently ap­proved ap­pli­ca­tion as a pre­ven­ta­tive medicine for chronic mi­graine – that opens up an­other po­ten­tial gold­mine.

There are an es­ti­mated 700,000 mi­graine suf­fer­ers in Bri­tain alone re­port­ing chronic head pain – dizzi­ness, nau­sea, and headaches can put some­one out of ac­tion for up to two days at a time. The chronic form is de­fined as some­one who has 15 headache days a month, of which at least eight are mi­graine.

An­a­lysts reckon that the mi­graine break­through could gen­er­ate rev­enue of be­tween £400mil and £1bil (RM2­bil and RM5­bil) by 2015 – al­most dou­ble the com­pany’s turnover.

Al­ler­gan em­ploys 800 em­ploy­ees in West­port but the pro­duc­tion of Bo­tox is now so au­to­mated that it only re­quires the di­rect labour of 80 peo­ple. That’s about £625,000 (RM3.125mil) in rev­enue per em­ployee.

“The Bo­tox story is an amaz­ing story and what’s re­ally un­usual is that the best may still be to come,” says Py­ott, a Glas­gow­born lawyer who has been chief ex­ec­u­tive since 1998.

“Right now our rev­enues are split 50:50 be­tween cos­met­ics and ther­a­peu­tics. But five years from now, 70% of our sales may come from ther­a­peu­tics, and that’s not be­cause the use of Bo­tox will de­cline.”

Py­ott lists some of the other Bo­tox ap­pli­ca­tions in the pipe­line. “It al­ways starts in a se­vere pop­u­la­tion,” he says re­fer­ring to two fu­ture ther­a­peu­tic ap­pli­ca­tions: con­trol­ling weak blad­ders in mul­ti­ple scle­ro­sis suf­fer­ers and crash vic­tims with spinal cord in­juries. This is cur­rently in clin­i­cal tri­als.

Many of the dis­cov­er­ies of the use of Bo­tox are by ac­ci­dent. It was dis­cov­ered that it could erase wrin­kles in 1987 af­ter an eye spe­cial­ist in­ject­ing pa­tients to cor­rect crossed eyes re­ported that a pa­tient’s frown had dis­ap­peared.

An­other cos­metic ap­pli­ca­tion, which was ap­proved in 2008 by the US Food and Drug Ad­min­is­tra­tion, was born from an eye-drop prod­uct that Al­ler­gan makes. Pa­tients re­ported that one side-ef­fect was longer and fuller eye­lashes. Back in the lab­o­ra­tory, Al­ler­gan came up with Latisse, which has now been ap­proved in the US and is un­der­go­ing clin­i­cal tri­als in Europe.

For Ire­land, which is in the throes of one of the worst re­ces­sions in the eu­ro­zone, the Bo­tox story is im­por­tant.

One of the rea­sons that Al­ler­gan set up shop in West­port 33 years ago was re­lo­ca­tion aid and low cor­po­ra­tion tax, which now stands at just 12.5%. Re­cently the Euro­pean Union’s Euro­pean com­mis­sioner for eco­nomic and fi­nan­cial af­fairs, Olli Rehn, sug­gested that this might have to be in­creased if Ire­land was to re­duce its gar­gan­tuan bud­get deficit.

But Py­ott is un­per­turbed by the threat of ris­ing taxes: “We have long as­sumed the rate would go up a cou­ple of points,” he says. Hav­ing stud­ied Euro­pean Union law, he says that Brus­sels can huff and puff but “at the end of the day, it’s a mat­ter of na­tional sovereignty.”

He is also op­ti­mistic about the over­all re­cov­ery of Euro­pean mar­kets in com­par­i­son with those in the United States. “Here and there, there are patches of gloom but in our com­pany we re­ally see no big is­sues at all,” he says.

“We look at all the statis­tics very care­fully and in fact, look­ing at the re­cov­ery of our mar­kets, par­tic­u­larly those that are cash paid, there is no sign of the in­fa­mous ‘dou­ble dip’. In fact, I would say most Euro­pean mar­kets are re­cov­er­ing and grow­ing more quickly than those in the United States.” – Guardian News & Me­dia 2010

Serendip­ity: It was dis­cov­ered in 1987 that Bo­tox could erase wrin­kles af­ter an eye spe­cial­ist in­ject­ing pa­tients to cor­rect crossed eyes re­ported that a pa­tient’s frown had dis­ap­peared.

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