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Allergan shares jump after Botox migraine approval

NEW YORK (Reuters) - Allergan Inc's AGN.N shares jumped more than 4 percent on Monday after the company won U.S. approval to market its blockbuster anti-wrinkle Botox injection as a treatment for chronic migraine headaches.

Its shares rose $3.00, or 4.3 percent, to $71.88 in morning trading. The U.S. Food and Drug Administration approved the potentially lucrative new use for Botox, Allergan’s flagship product, late on Friday.

Allergan shares had risen in August when the company released information that indicated approval of Botox for chronic migraine headaches use seemed near.

“Friday’s approval of the chronic migraine indication for Botox will, we expect, prove to be a watershed in Allergan’s revenue and earnings growth over the next several years,” William Blair analyst Ben Andrew said in a research note.

Botox injections would be given around the head and neck every 12 weeks in an attempt to dull future migraines. Chronic migraine sufferers have headaches most days of the month. The drug has not been shown to work for people who have headaches 14 days or fewer per month.

Botox, with current annual sales of $1.4 billion, could eventually capture $600 million or more in additional annual sales from the migraine indication, according to analysts.

The product, which is injected and blocks nerve signals, is also being studied as a treatment for overactive bladder.

Botox is by far the world’s biggest anti-wrinkle treatment. Allergan also has a dominant position with many of its other prescription drugs and medical devices.

It has more than 50 percent of the global market for breast implants, and its Juvederm is the leading dermal filler, used to smooth facial wrinkles. Allergan’s Lap-Band, used in weight- loss procedures, commands two-thirds of the $300 million to $400 million gastric band market.

Moreover, Allergan has the industry’s fastest-growing array of prescription eye medicines.

The company’s leadership position in so many therapeutic areas has made it a darling of Wall Street, even though U.S. regulators have called Allergan to account for marketing Botox for unapproved non-cosmetic uses in recent years.

Allergan last month agreed to plead guilty and pay $600 million to resolve a federal probe of the practices.

The Justice Department accused Allergan of paying kickbacks to doctors to prescribe Botox for unapproved uses -- such as treating headaches, pain and juvenile cerebral palsy -- and teaching doctors how to bill for such “off-label” uses.

Allergan's shares have risen 23.2 percent in the past year, fueled largely by excitement about the ever-improving sales prospects for Botox, That compares with a 7.2 percent gain for the Arca Pharmaceutical Index .DRG of large U.S. and European drugmakers.

Reporting by Lewis Krauskopf and Ransdell Pierson, editing by Dave Zimmerman and Maureen Bavdek

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