1. Looking good is half the battle

1. Looking good is half the battle

It’s hard to appear anxious when your frown lines are frozen. Pyott happily admits that he gets Botox injections, and he continually trots out the same joke he has been telling for years: “I’m actually 75, but you wouldn’t know it.” (He turns 56 this month.) In fact, it’s hard not to notice that many of Allergan’s employees have that rested, refreshed look. “This is a fairly wrinkle-free company,” he says.
There are a lot of reasons for that. Despite the dip, Botox is still wildly popular. More than 5 million Botox procedures were administered last year in the United States, up 8 percent from 2007 and 537 percent more than in 2000, according to the American Society of Plastic Surgeons. The brand is so ingrained in modern culture and imbedded in the lexicon that it’s even used as a verb, as in “Have you been Botoxed?” Celebrity magazines and Web sites constantly dish about which famous faces have received injections. (Simon Cowell admits he’s used it! Nicole Kidman won’t say!) During last year’s presidential campaign, Jay Leno quipped that medical experts could tell Democrat Joe Biden had used Botox because his expression didn’t change when he was asked about his hair plugs. Publicity like that can’t be bought.
A new competitor to this marketing phenomenon faces a steep uphill battle for consumer recognition, leading some industry experts to believe that warnings of Botox’s marketplace vulnerability are overblown. Dysport “will have an impact,” says Jason Napodano, a pharmaceutical analyst at Zacks Investment Research, a Chicago-based equity research firm. “Will it have a tremendous impact? I think not.”
Mark Prygocki, chief operating officer at Scottsdale, Ariz.-based Medicis Pharmaceutical, which will market Dysport for cosmetic use in the United States under an agreement with the French manufacturer Ipsen, says his company will focus first on winning over physicians. “The doctors’ experience, I think, will be critical to this market,” he says.
That could be a tough sell. Bradley Mudge, a Newport Beach cosmetic surgeon, says he might not even keep a regular stock of Dysport. Botox is so effective and well received that he doesn’t see any advantage in offering a similar product, even if the price is slightly less than the $350 to $600 or more typically spent on a Botox treatment. “You’d have to spend a lot of time educating patients [about Dysport],” he says. “It’s not worth the time. I might have a vial here in case someone asks for it.”
Pyott points to Botox’s strength in markets outside the United States where it already competes with Dysport and a few smaller competitors as evidence that Allergan will continue to dominate the U.S. market. In Europe, for instance, Botox has nearly two-thirds of the market and has continued to increase its share in relation to its rivals. Worldwide, Botox commands more than 80 percent of the market. Pyott contends that’s because Allergan’s long history and deep association with Botox give the company a clear competitive edge. The Botox molecule is large and complex—half a gram of the toxin is enough to make a year’s supply—and therefore not easily understood or manipulated, he says. “We know more about the botulinum toxin than any other company in the world. You may be getting a break on price [with other products] but it may not be as good a result.”
That might sound like bluster, but when it comes to cosmetics, the perception of quality alone often is enough to keep consumers loyal. Newport Beach dermatologist Nancy Silverberg says her patients are so enamored with Botox that, of all the cosmetic procedures she offers, it has been the least impacted by economic concerns. Rather than go without, patients are stretching the time between treatments or using slightly less. “They’ll say: ‘I won’t give up my Botox.’ ”