Preserving Competition, FTC Requires Divestiture Before Allowing Allergans Acquisition of Inamed

Consent Order Requires Allergan to Divest Future Botox Rival Reloxin in $3.2 Billion Deal

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Botox marketer Allergan, Inc., and the Inamed Corporation will divest the rights to develop and distribute Reloxin, a potential Botox rival, to settle Federal Trade Commission charges that Allergan’s $3.2 billion purchase of Inamed would violate federal antitrust laws. The FTC alleges that Allergan’s purchase of the expected first serious competitor to Botox likely would reduce competition and force consumers to pay higher prices for the botulinum toxin type A products used by millions of Americans to temporarily erase frown lines and wrinkles. Under the terms of the FTC settlement, the companies will return the development and distribution rights to Reloxin to Ipsen Ltd., its U.K.-based manufacturer.

On December 20, 2005, Allergan reached an agreement to acquire Inamed for approximately $3.2 billion. Allergan’s Botox is the best-selling botulinum toxin in the United States and the only such product approved by the U.S. Food and Drug Administration for the treatment of facial wrinkles. In 2002, Inamed acquired the U.S. rights to a rival botulinum toxin type A, Reloxin, from Ipsen. Reloxin currently is in Phase III of clinical trials with the FDA and is best-positioned to next enter the market in the United States.

“This merger raises significant antitrust concerns because it would have combined the dominant U.S. supplier of botulinum toxin with the next likely entrant to the market,” said Jeffrey Schmidt, Director of the FTC’s Bureau of Competition. “Competition increases consumers’ product choices and leads to lower prices. The consent order announced today effectively restores this competition and protects U.S. consumers by requiring the divestiture of Reloxin to a company well-equipped to develop the product and bring it to market as an independent competitor to Botox.”

According to the Commission’s complaint, the transaction as originally proposed would reduce competition in the U.S. market for cosmetic botulinum toxins. Botulinum toxin is an increasingly popular, non-surgical treatment for wrinkles caused by repetitive muscle movement, such as the “worry lines” that appear on the forehead when a person frowns. Botulinum toxin’s unique mechanism of activity differentiates it from other cosmetic products and procedures used to treat wrinkles, and as a result, these other products and procedures are not close substitutes for botulinum toxin.

The Commission alleges that Allergan’s acquisition of Inamed likely would have caused significant harm to consumers by removing Reloxin as an imminent competitor from the U.S. market for cosmetic botulinum toxins. Today, Allergan’s Botox dominates the U.S. market for botulinum toxins and is the only one approved by the FDA to treat facial wrinkles. Inamed’s launch of Reloxin, which is expected to be the second botulinum toxin product to receive FDA approval for the treatment of facial wrinkles, would increase competition and likely reduce prices for cosmetic botulinum toxin. Other firms’ cosmetic botulinum toxin development programs lag well behind Inamed’s Reloxin, so the potential entry of other products would not be timely, likely, or sufficient to counteract the alleged anticompetitive impacts of the transaction.

The consent order remedies the anticompetitive impact of Allergan’s proposed acquisition of Inamed by requiring the companies to return the development and distribution rights to Reloxin, including the ongoing clinical trials and related intellectual property, to Ipsen. The Commission believes that Ipsen is well-suited to take over the development of Reloxin in the United States and replicate Inamed’s competitive position in the relevant market. Ipsen has been manufacturing and marketing Reloxin in Europe for years under the brand name Dysport and is intimately acquainted with the development and regulatory program for Reloxin in the United States.

The proposed order contains several provisions designed to ensure the successful and timely entry of Reloxin by requiring that:1) Allergan and Inamed divest the Reloxin development and distribution rights back to Ipsen within 20 days of the order becoming final; 2) Allergan and Inamed take steps to ensure that confidential business information relating to Reloxin will not be obtained or used by Allergan; and 3) Ipsen and/or its future marketing partner have the opportunity to enter into employment contracts with certain key individuals who have experience relating to Reloxin. Finally, the Commission has appointed a trustee to oversee the divestiture and to ensure Allergan and Inamed’s compliance with the consent order. The order also contains routine reporting requirements.

The Commission vote to accept the consent order, appoint the interim monitor, and place a copy on the public record was 4-0, with Commissioner J. Thomas Rosch recused. The agreement will be subject to public comment for 30 days, until April 7, 2006, after which the Commission will decide whether to make it final. Comments should be addressed to: FTC, Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.

Copies of the complaint, proposed consent order, and an analysis to aid public comment are available on the FTC’s Web site at The FTC’s Bureau of Competition, in conjunction with the Bureau of Economics, seeks to prevent business practices that restrain competition. The Bureau carries out its mission by investigating alleged law violations and, when appropriate, recommending that the Commission take formal enforcement action. To notify the Bureau concerning particular business practices, call or write the Office of Policy and Coordination, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580, Electronic Mail:; Telephone (202) 326-3300. For more information on the laws that the Bureau enforces, the Commission has published “Promoting Competition, Protecting Consumers: A Plain English Guide to Antitrust Laws,” which can be accessed at

Contact Information

Media Contact:
Claudia Bourne Farrell
Office of Public Affairs
Staff Contact:

James E. Southworth
Bureau of Competition