Merz’s Xeomin and Belotero will impact aesthetics market post Allergan’s injunction

This article is provided to FT.com readers by BioPharm Insight—a news service focused on providing insight into the most price sensitive issues in the global pharmaceutical market. www.biopharminsight.com

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Merz Pharmaceuticals/Merz Aesthetics will see an increased presence in the aesthetics market with Xeomin and Belotero once Allergan’s (NYSE:AGN) injunction is lifted, plastic surgeons told BioPharm Insight. Merz’s Xeomin will fare well against Allergan’s Botox thanks to an expected lower price tag, and Belotero will establish a niche in the dermal fillers market, they agreed.

The injunction impacted a third Merz product: Radiesse, a calcium hydroxylapatite filler approved in 2006 for moderate-to-severe facial wrinkles and folds and for the correction of facial fat loss. Surgeons agreed that its position is less impacted by the injunction but more by the ability of other fillers to segment the market. It remains one of Merz’s strongest growth drivers, according to a November 2011 press release.

In March 2012, a judge issued a 10-month injunction, noting Merz, a German company, had misappropriated trade secrets and benefited from confidential information used by former Allergan employees who joined Merz.

Merz and Allergan declined to comment. Dr. Martin Zugel, CEO of Merz Pharmaceuticals, said in a statement following the injunction, “Merz stands for clear worldwide rules and high ethical standards. We thus regret that individual employees have violated existing guidelines and standards.”

Already approved as a therapy for two neurological diseases, Xeomin received FDA approval in July 2011 for improving the appearance of glabellar lines (frown lines between the eyebrows). Belotero gained FDA sanction in November 2011 for smoothing moderate-to-severe facial wrinkles.

Legal standing

Merz is working to shorten the injunction and hopes to return to the market earlier than January 2013, said Dr Michael Jasin, facial plastic surgeon, member, Xeomin Medical Advisory Board. Douglas Robinson, associate, Harness Dickey, Missouri, noted he would be surprised if the judge made a ruling before January. The judge would likely recommend the injunction be carried out for the remaining four months, Robinson noted.

While these rulings can be and usually are expedited at the US Court of Appeals for the Federal Circuit when appealed, if it hasn’t happened by now, it is unlikely before January, according to Robert Gould, partner, Husch Blackwell, Chicago.

Furthermore, because Xeomin would be used for a cosmetic, rather than a life-threatening indication, it is more likely the injunction would be upheld, Robinson added. The injunction stops the US sale of Xeomin for aesthetic indications and restricts therapeutic sales to certain physicians in certain US territories unless customers request the product without solicitation from Merz, according to a company press release.

Radiesse and Belotero can be distributed to certain pre-existing customers and those that voluntarily request them without Merz solicitation.

Though many physicians are able to continue using Merz’s products, the injunction significantly slowed the company’s ability to impact the aesthetics market, said Dr Miles Graivier, plastic surgeon, Roswell, Georgia.

Xeomin versus Botox

Xeomin is considered to be very similar to Allergan’s Botox in terms of efficacy and safety, agreed Jasin and Graivier. Botox’s cosmetics sales are forecasted at USD 854m for 2012, according to an analyst report.

Making the switch from Botox to Xeomin is relatively straightforward because the drug units transfer simply in a 1:1 ratio, Jasin explained. However, court rulings in Germany and Spain prevent Merz from claiming 1:1 ratio dosing (Germany) and referring to a conversion ratio without a warning that the products’ unit doses are not interchangeable (Spain), as per an Allergan press release.

Jasin reiterated that among aesthetic surgeons, there is a significant consensus that Xeomin dosing follows in a 1:1 ratio with Allergan’s Botox. Slight differences may exist between the products in terms of time to onset, but any other major differences claimed by Allergan are simply efforts to combat competition, said Jasin.

Medicis’ (NYSE:MRX) Dysport is a third botulinum toxin A injectable, approved for cervical dystonia and glabellar lines in April 2009. Sales in dermatology are expected to reach USD 87m in 2012, according to an analyst report. Dysport’s units are different from Botox and can require a learning curve, said Jasin. But the different ratios are not a significant barrier for experienced doctors, stated Dr Gregory Albert, head of his practice in Florida.

Xeomin differentiates itself by being a purer product than Botox, lacking complexing proteins, said Dr Z. Paul Lorenc, plastic surgeon, New York. Complexing proteins can, in theory, lead to a negative reaction causing a patient to discontinue injections or require a higher dose, he explained. The complexing protein-free formulation of Xeomin, however, has yet to be proven clinically relevant, agreed the surgeons.

Since efficacy, safety, time to effect and duration of effect are similar, the determining factor in Xeomin’s favor is a significantly reduced price, said Jasin. Xeomin will price competitively below Botox and Dysport, the surgeons noted.

An average Botox course of three injections can run approximately USD 500-700, said Albert. Dysport is approximately USD 150 less than that; with three to four treatments a year, the cost can be significant, he added. Many patients will be most comfortable continuing Botox because they have used it for years, but for others price will be a factor, agreed Jasin and Graivier.

Xeomin’s launch prior to the injunction was so brief, many doctors still have little or no experience with it, Albert noted. Some patients and doctors are early adopters, hoping for a new and better product, but others are comfortable with a brand with which they have extensive experience, he explained. To convert the patients and doctors who might be on the fence, Merz’s marketing and competitive pricing is expected to be very aggressive, Albert added.

Xeomin also does not need to be refrigerated, which could help bring down costs of distribution and improve ease of storage for surgeons, said Lorenc.

Belotero’s niche among HA fillers

With Medicis’s Restylane and Allergan’s Juvederm on the market, Belotero becomes the third hyaluronic acid (HA) filler, Jasin said. When the injunction is lifted, Belotero will find its niche for treating fine lines because it can be injected more superficially, said Jasin.

With fillers, patients are always interested in the next best thing, and there can be a great deal of hype surrounding new products, noted Dr Ramtin Kassir, director, Mona Lisa Cosmetic Surgery Center, Wayne, New Jersey. Surgeons do understand, though, it is not just about the newest product but knowing which one is appropriate to use in which situation, he said.

New dermal fillers are easier to adopt than the neuromodulater toxins, noted Albert. It does not make sense because the fillers last longer, but patients are more willing to try a new dermal filler than they are to change between Botox, Dysport and Xeomin, he added.

Plastic surgeons will have to get reacquainted with Belotero, which may have lost momentum with its launch because of the injunction, said Jasin. Though many surgeons were able to obtain and use Belotero, the injunction prevented it from establishing its pocket in the market, Graivier added.

Belotero is better than other dermal fillers for more superficial injection, because it integrates with the skin better and causes fewer bumps and clumps, explained Jasin. Importantly, Belotero has not been shown to cause a tindel (bluish hue) as other HA fillers have, said Graivier and Jasin.

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