Allergan Stock Soars With FDA OK for Toxin-Based Treatment

Shares of Allergan Inc. rose Tuesday to their highest price in the last year after the company said it won federal approval to treat another ailment with its Botox drug, a purified form of one of the deadliest known poisons.

The Irvine specialty pharmaceutical company said that the approval from the U.S. Food and Drug Administration allows it to expand sales of Botox to treat muscular pain related to cervical dystonia, which causes shoulder and neck contractions.

During New York Stock Exchange trading Tuesday, the stock hit its 52-week high of $97.63 a share and eased off a bit to close at $95.94, up $3.81, or 4%. Allergan stock has nearly doubled in value since January.

Botox, made from the toxin botulinum, already is approved for such neuromuscular disorders as crossed eyes and uncontrollable blinking, and Allergan has it in clinical trials for treatment of such conditions as limb spasticity, migraines, excessive sweating and cosmetic uses, like ironing out the wrinkles in furrowed brows.

Allergan Chief Executive David Pyott has said the drug might be able to treat as many as 93 conditions, ranging from lower-back pain to cerebral palsy.

“Botox has been having a banner year in 2000, and this certainly sets the stage for another fruitful year in 2001,” analyst Hans von der Luft of McDonald Investments in Boston said about the FDA approval.

The market for Botox as a treatment for cervical dystonia is small. Only about 50,000 people nationwide suffer from the disorder, and many of them already are getting the drug directly from their doctors, who can dispense the drugs legally.

But the FDA’s approval gives the drug wider credence and could help Allergan win approval for its use in treating other ailments, said Steven Gerber, an analyst with CIBC World Markets in Los Angeles.

The FDA’s acceptance, Gerber said, also blunts a challenge posed by Elan Corp. in Dublin, Ireland, which won regulatory approval two weeks ago to sell a rival neurotoxin, Myobloc, for cervical dystonia in the U.S.

Von der Luft predicts sales of Botox will rise to $400 million by 2003 from $240 million this year.

Allergan sales of Botox surged 43.5% last year to $175.8 million, accounting for 12% of the company’s overall revenue of nearly $1.5 billion.