Michael Pearson runs a drug company, but that doesn't mean he wants to spend money on science.
By contrast, science is prized at the company he wants to buy, Allergan Inc. The Botox maker spends 17% of its revenue on research and development, higher than many of its rivals.
That culture clash and Mr. Pearson's reputation as an aggressive cost cutter are among the main reasons Allergan long resisted merger overtures from Mr. Pearson's Valeant Pharmaceuticals International Inc., a person familiar with Allergan's thinking said.
Valeant and Allergan are on "completely opposite sides of the drug industry," said Ronny Gal, a Sanford C. Bernstein analyst.
That dichotomy raises a central question of this takeover battle: Do investment needs of the drug business make it fundamentally different, or can it be rolled up and squeezed just like any other industry?
As Valeant and its partner in pursuit of Allergan, activist investor William Ackman, unveiled the nearly $46 billion offer on Tuesday, they confirmed many of the target's worst fears. Valeant said it would pare R&D spending after merging the companies.
About 20% of the combined companies' 28,000 employees would be cut, though that could include Valeant staff, Mr. Pearson said.
"When we went through and analyzed the cuts, these are not people touching the customers, these are people sitting in offices. We don't need people sitting in offices," he said.
Valeant offered to swap each Allergan share for $48.30 in cash and 0.83 Valeant share. Based on Valeant's closing price Monday in the U.S., the deal values Allergan at $152.89 a share, or roughly $46 billion. Valeant said the offer was a premium to Allergan's price of $116.63 on April 10, the day before Mr. Ackman's Pershing Square Capital Management LP reached the 5% ownership level at which it soon would have to disclose its holding. Pershing Square's stake later grew to nearly 10%.
Allergan's stock closed 15% higher Tuesday at $163.65 on the New York Stock Exchange. Valeant's shares rose 7.5% to $135.41 on the NYSE.
Allergan said its board and advisers would "carefully review and consider" the offer.
To close followers of Valeant, the Laval, Quebec, company's intentions should come as no surprise. Seen as a maverick in the health-care industry, Mr. Pearson is a serial acquirer known to take over companies for their products, cut away research spending and then try to boost revenue by moving the products through Valeant's sales force.
The acquisition-heavy strategy focuses more on extracting cost savings and tax benefits from deals than on seeking growth through scientific advances. Enlarge Image
Allergan, led by CEO David Pyott, has resisted Valeant's overtures. Reuters
Valeant spent about 3% of its revenue on R&D last year. In 2007, a year before Mr. Pearson joined the company, the figure was 12%. The company has made 100 acquisitions or joint ventures since Mr. Pearson took over and has $17.4 billion in debt. Valeant's board includes several deal makers, and the company's chief financial officer is a former banker from Goldman Sachs
While controversial in the health-care industry and on Wall Street, Mr. Pearson's strategy has delivered for Valeant shareholders. Since he took the helm, the company's stock has risen
more than 900%.
Valeant posted $842 million in revenue and $1.2 million in profit in 2007. Last year the company had $5.77 billion in revenue and posted an $866 million loss as it integrated its nearly $9 billion acquisition of Bausch & Lomb.
A central part of Mr. Pearson's approach is using acquisitions to lower its tax rate through a structure called a tax inversion. Valeant, which had been based in California, in 2010 merged with Canada's Biovail and changed its domicile to Canada. Valeant's resulting tax rate below 5% gives it an edge on competition from the U.S.
Though Valeant said the rate would go up in a pairing with Allergan, ultimately it expected to reap tax savings since the Irvine, Calif., target pays taxes at much higher U.S. rates.
Mr. Pearson said in an interview that he and Allergan CEO David Pyott first talked about a potential merger about 18 months ago and that Allergan rejected the overture a few weeks later.
Mr. Pearson said he sought to rekindle the talks this February. After a meeting was canceled and analysts suggested that Allergan wasn't interested in a stock deal with Valeant, Mr. Pearson decided to take the matter public, he said.
Mr. Ackman at a news conference Tuesday with Mr. Pearson crowed about Valeant's cost consciousness, pointing to its ability to achieve higher-than-expected savings in earlier deals, such as the one for Bausch & Lomb. "They really have a perfect track record of achieving synergies," Mr. Ackman said.
Valeant didn't meet with many of Bausch & Lomb's top managers after buying the company last year from private-equity owners Warburg Pincus LLC and instead moved quickly to lay them off, people familiar with the matter said. Valeant reported that by the end of this year it would be able to save $850 million a year by cutting overlapping costs with Bausch & Lomb.
Mr. Ackman said he came to appreciate Mr. Pearson's penny pinching at a meeting in which the activist investor requested a Chipotle burrito for lunch instead of the salad being served. When Mr. Pearson's assistant brought in the burrito, the CEO requested $20 from Mr. Ackman to cover the cost.
Mr. Pearson assured Valeant shareholders on Tuesday that Mr. Ackman was footing the bill for the news conference.
Activist investor William Ackman has made an unorthodox alliance with a serial acquirer of specialty drugs to try buying the maker of Botox
Mr. Ackman and Valeant Pharmaceuticals International
Inc. seek to acquire the wrinkle treatment's maker, Allergan
Inc., according to a filing on Monday with the Securities and Exchange Commission.
The deal, if successful, would create a behemoth in the global eye-care and skin-care drug industries. Each company has a stock-market capitalization of more than $40 billion.
Laval, Quebec-based Valeant, which owns brands such as Bausch & Lomb, had been trying woo Allergan for some time, people familiar with the matter said, when Mr. Ackman approached it about working together on a deal.
The acquisition attempt would likely be hostile, the people said.
Mr. Ackman's Pershing Square Capital Management LP has built a 9.7% stake in Allergan since February, according to the SEC filing. Valued at about $4 billion, the stake represents his biggest investment ever, people familiar with the matter said.
Investors cheered the possible combination, sending shares of Valeant and Allergan up in after-hours trading when The Wall Street Journal reported Valeant's joint plan with Mr. Ackman. Allergan declined to comment.
The tag-team effort is unusual because activist investors typically don't approach a potential acquirer before investing in a target. They generally take stakes in companies and then push for financial or operational change in a bid to boost the company's performance and its share price.
An activist who wants to see a company get sold generally presses management to embark on a sale process.
By teaming with Valeant, Mr. Ackman—a noted and often controversial activist investor—essentially eliminated a step, finding a willing buyer for a target.
The strange bedfellows came together after Mr. Ackman was introduced to Valeant by a Pershing Square employee who knows Valeant Chief Executive Michael Pearson. Mr. Ackman suggested he could help the Canadian company do a deal at some point.
Valeant and Mr. Ackman later signed an agreement in February to work together; Valeant told him it was interested in Allergan, of Irvine, Calif.
Valeant was interested in Allergan because it saw more than $2.5 billion of cost savings if the companies were to pair up, said people close to Valeant.
Aligning with Mr. Ackman gives Valeant a nearly 10% head start in getting Allergan shareholders on its side. Plus, Mr. Ackman has experience running hostile corporate campaigns.
Still, the alliance represents an unusual crack in a typically sturdy wall between activists and companies. While companies have been showing greater receptiveness to activist approaches in recent years, in general corporate America views activist investors as adversaries, not allies.
Valeant hasn't settled on how much stock it would commit to an offer but expects to use about $15 billion in cash at this point, according to the SEC filing.
The company has lined up investment banks Barclays PLC and Royal Bank of Canada for financing, the filing said. Pershing Square is expected to maintain a stake in a combined company for at least a year, according to the filing.
Valeant has until May 2 to make an offer in conjunction with Mr. Ackman, the filing said.
A former McKinsey & Co. consultant, Mr. Pearson buys companies and eliminates much of the research-and-development costs while selling products through Valeant's existing sales force. He has also taken advantage of relatively cheap debt and the lower tax rates accorded companies based in certain countries overseas.
Mr. Pearson said earlier this year that he wants Valeant to be among the top five pharmaceutical companies in the world by the end of 2016.
With Valeant's growth fueled by acquisitions, some investors and deal makers say the company's complexity makes its stock hard to value.
Valeant and Allergan compete against each other in the global eye-care and cosmetic-treatment markets. Allergan is best known for products such as the anti-wrinkle treatment Botox, breast implants and a product that increases the length of eyelashes.
It also sells prescription drugs treating eye conditions like glaucoma and conjunctivitis. It has been facing the threat of competition for key products such as its Restasis dry-eye drug, one of its top-selling products.
Last year, Allergan reported $6.3 billion in revenue. Valeant notched $5.8 billion in 2013 revenue.
Mr. Pearson has said he likes the eye-treatment market because it is global and because governments and private health insurers are willing to pay for the treatments.
He has also said he likes the market for cosmetic-treatment products, because patients are willing to pay out of pocket.
Valeant also sells a variety of eye-care and aesthetic products, many acquired as part of its purchases of Bausch & Lomb and Medicis Pharmaceutical Corp. in recent years.
In competition with Allergan, Valeant sells its own version of a botulinum toxin wrinkle treatment, called Dysport. And Valeant, through its Bausch & Lomb acquisition, has been developing competitors for Allergan's dry-eye and other treatments.
Valeant would be prepared to sell some assets to allay any antitrust concerns, said a person familiar with the deal.
Mr. Pearson took the helm of Valeant in 2008 after a 23-year career at McKinsey where he worked alongside CEOs on turnarounds, acquisitions and strategy.
"We spend less than 5% of our revenues on research and development," said Mr. Pearson in a 2012 interview with Journal. "Instead, our innovation comes from acquiring companies and products that are already approved and in the market, so we avoid the risk associated with R&D." http://tinyurl.com/k3uqmr2
Allergan Inc. (AGN)
won’t seek U.S. clearance to sell its popular Lap-Band stomach shrinking device to an increasing population of obese teenagers.
In the wake of congressional criticism and lawsuits, the Irvine
, California-based company has decided to shelve any plans for marketing its Lap-Band device to adolescents, among the fastest-growing group of obese Americans.
Health advocacy groups have warned about the surgery’s safety and its effect on a young person’s developing body. And a 2011 Archives of Surgery study found that almost half of adult patients who had gastric banding had the device removed following infections and other complications.
“These products are marketed as the surgery that can save your life,” Amy Allina
, program director of the National Women’s Health Network
, a Washington-based advocacy group, said in an interview. “People are being misled.”
About one-third of 200,000 weight-loss surgeries in the U.S. annually use gastric banding, wrapping the small rubber devices around the upper stomach to limit capacity. It costs less than surgery that alters or staples parts of the stomach, and is adjustable and reversible.
Use of the Lap-Band device may grow because obesity rates are predicted to increase. More than one-third of U.S. adults are obese, according to the Centers for Disease Control and Prevention in Atlanta, and medical costs associated with obesity were estimated at $147 billion in 2008 dollars. The adolescent market had been seen as potentially lucrative: the rate of obesity among all U.S. children and adolescents has tripled since 1980 to about 17 percent.
Allergan isn’t elaborating on why it isn’t seeking U.S. permission to market its weight-loss
device to a younger patient population. The decision was made at the beginning of the year, Allergan spokeswomen Naziah Lasi-Tejani wrote in an e-mail. The company stands behind the safety and effectiveness of the Lap- Band system it obtained in its 2006 acquisition of Inamed Corp. for about $3.3 billion, Lasi-Tejani said.
“The Lap-Band AP system has an 18-year safety and effectiveness record with more than 650,000 procedures performed to date and adverse events reported in less than two percent of patients,” Lasi-Tejani said in an e-mail.
Patients who undergo gastric banding with Lap-Band can have the rubber device removed entirely if it’s problematic, or have it adjusted using saline infusions to tighten it. The procedure has been popularized by such high-profile patients as Rex Ryan
, the New York Jets professional football coach who told the New York Post he lost almost a third of his weight, dropping to 242 pounds.
At the same time, some clinics, hospitals and doctors that offer gastric banding with Lap-Band devices are facing lawsuits over patient care and, in some instances, the tragic outcomes that have followed surgery.
Some Democrats in Congress in January called for hearings on whether the U.S. Food and Drug Administration
failed to protect the public from Lap-Band devices. Democrats on the House Energy and Commerce Committee said at the time that Allergan was pursuing the expanded use in children as young as 14 despite concerns by some doctors the procedure is too drastic for a young person’s developing body, according to a Jan. 20 letter to Republican leaders. The adverse public health consequences associated with the device are exacerbated by aggressive marketing, the lawmakers said.
About half of patients who had gastric banding needed to have the device removed, according to a March 21, 2011, study in the Archives of Surgery that found the treatment caused more complications, such as hernias, infection and band slippage, than weight loss. About 1 of 3 had band erosion, which occurs when the band grows into the stomach.
The data is no longer relevant as clinical practices around implantation techniques and follow-up care have significantly improved involving Lap-Band, said Lasi-Tejani of Allergan. Data from about 60,000 patients have shown laproscopic adjustable gastric banding has complication rates that are four times lower than gastric bypass surgery, she said.
Problems have dogged some surgery clinics that provide or market the Lap-Band, including those affiliated with a 1-800- GET-THIN LLC marketing campaign. The use of Lap-Bands by surgical centers associated with 1-800-GET-THIN have been associated with five deaths since 2009, according to the January letter from House Democrats
, citing Los Angeles
Times stories on fatalities.
The FDA sent a Dec. 12 letter to 1-800-GET-THIN stating their advertising was misleading and failed to reveal the risks of surgery.
1-800-GET-THIN is committed to patient safety and advocacy, and all callers are referred to licensed doctors and accredited facilities that provide disclosure on risks and benefits, according to a press release
on their website.
In July, the FDA also told Los Angeles-based Lap-Band VIP in a letter to immediately stop running television ads that leave out information about the procedure’s risks.
Obesity is a measurement of a person’s body mass index
, which is calculated using height and weight. A person with a BMI of 30 or more, such as a 6-foot man weighing more than 220 pounds (100 kilograms) is considered obese, according to the National Institutes of Health
The FDA in February 2011 expanded
the use of Allergan’s Lap-Band to include obese individuals with a BMI of 30 to 34 who have an existing medical condition related to their weight. The procedure was approved in 2001 for severely obese patients with a BMI of at least 40; a index of at least 35 and an existing, related condition such as diabetes, or those who are at least 100 pounds (45 kilograms) overweight.
Allergan in 2011 reported about $203 million in net sales worldwide of its obesity intervention products.
“It’s the safest procedure we have,” Jaime Ponce
, president of the American Society for Metabolic & Bariatric Surgery, said in an interview. “The procedure itself can have problems, but they get more pronounced if they don’t have the proper follow up.”
Some patient advocacy groups such as the National Women’s Health Network
remain skeptical of such assurances, saying deaths and complications raise questions about how well informed patients are before undergoing gastric banding with the Lap- Band. http://tinyurl.com/99k4xvc
Almost half of patients undergoing gastric banding for obesity needed to have the device removed, often because of erosion, according to a study
that found the treatment caused more complications than weight loss.
About 60 percent of the 82 patients with the device, Allergan Inc.’s Lap-Band, followed over 12 years or more needed additional operations, according to a study by Belgian researchers published online today by the Archives of Surgery. The minimally invasive surgery led to weight loss of 18 percent in 70 patients where data was available.
More than 15 million people in the U.S. are considered severely obese, a total that has almost doubled in the past 25 years. About 220,000 people underwent weight-loss surgery in 2009, up since 2000 when 36,700 operations were performed, according to the American Society for Metabolic and Bariatric Surgery in Gainesville, Florida. Gastric banding represents about one-third of that total.
“I personally no longer perform band gastroplasty, but I think it is defendable for surgeons to continue doing this,” said Jacques Himpens, the study’s lead author who works with the European School of Laparoscopic Surgery at Saint Pierre University Hospital in Brussels. “Patients should not expect too much from the procedure. If they do get the operation, they must commit themselves to lifelong and very tight follow-up.”
Allergan Inc., the world’s largest maker of gastric banding in the U.S., called the study “ill-constructed” in an e-mail. The gastric banding products involved in the study are produced by Allergan, which acquired the product in 2006 with its purchase of Inamed Corp.
The company criticized the study for “severely deficient” follow-up, with data on nearly half of the patients in the 151- patient study never acquired, and a focus on patients that had received their devices “at the very beginning” of the use of gastric bands.
“The surgeons were at the bottom of their learning curve,” said Cathy Taylor, Allergan’s spokeswoman. The Belgian study surveyed patients who had the procedure from January 1994 to December 1997.
Allergan pointed to a study
published in 2010 that showed a 12 percent complication rate among 2,909 patients who received the gastric banding in 2001, the year the Food and Drug Administration approved its use in the U.S. The study, conducted by researchers at New York University Langone Medical Center in New York, had received funding from the Irvine, California-based device maker. Allergan controls 73 percent of the U.S. gastric- banding market. http://tinyurl.com/6bl5dso
Plastic surgery organizations have drawn criticism from U.S. regulators by trying to downplay the risk of cancer with breast implants, a consumer group said.
The American Society of Plastic Surgeons and the American Society of Aesthetic Plastic Surgery said on their websites that a rare form of cancer tied to Allergan Inc. and Johnson & Johnson (JNJ) implants was benign and could be cured with surgery, the Public Citizen consumer group said
today. The Food and Drug Administration talked to the organizations at the request of Public Citizen and the information was removed.
About 60 cases of anaplastic large-cell lymphoma have been reported globally in women with breast implants, including 34 published in studies from January 1997 to May 2010, the FDA said Jan. 26. The agency hasn’t decided on an optimal treatment for these women or what risk factors or prognosis they have.
“While ASPS and ASAPS are independent organizations that the FDA does not regulate, we are committed to assuring that health care providers and patients receive accurate information,” Jeffrey Shuren, director of the FDA’s Center for Devices and Radiological Health, said in a Feb. 28 letter
to Public Citizen.
The plastic surgery organizations say the FDA didn’t require the information to be removed from their websites and that it was replaced with newer information.
“It was never our intention to downplay the risk of a very rarely occurring cancer associated with breast implants,” said Phil Hayes, a spokesman for the American Society of Plastic Surgeons, in an e-mail. “We regret that our word choice caused confusion, and we voluntarily removed the webinar from our website.”
Allergan, of Irvine, California, and the charitable Allergan Foundation each have given at least $25,000 to the American Society of Plastic Surgeons this year, according to the association’s website
. The Ethicon, Ethicon Endo-Surgery and Mentor divisions of New Brunswick, New Jersey-based J&J have given at least $25,000 each, according to the website.
Several companies, including Allergan and Mentor, have provided educational grants to the aesthetic plastic surgery organization, said Felmont Eaves, the president of the American Society of Aesthetic Plastic Surgery, in an e-mail. Neither company provided funding for the information removed from the website, he said.
The FDA is urging doctors to report confirmed cases while it works with the plastic-surgeon society and others to develop a registry to track women who receive breast implants.
“As the FDA moves forward with these plans, it is essential that the agency closely monitors the control of the registry to ensure that the integrity of the data being collected is not corrupted by those with significant conflicts of interest,” said Michael Carome, deputy director of health research at Public Citizen. http://tinyurl.com/4je7v9w
Weight-loss surgery, once a last resort for extremely overweight people, may soon become an option for those who are less heavy.
An advisory committee to the Food and Drug Administration
will consider on Friday a request by Allergan
, the pharmaceutical company, to significantly lower how obese someone must be to qualify for surgery using the company’s Lap-Band device, which restricts intake to the stomach.
On Wednesday, the F.D.A. acknowledged that a new study by the company showed that people in the proposed range of obesity
who had the band experienced “statistically significant decreases in all measures of weight loss.” http://tinyurl.com/3xgqdst
Drug maker Allergan Inc. has built itself into a multibillion dollar company by going after, and even creating, new markets. Now it’s looking to do that with flagship drug Botox as a treatment for chronic migraine head-aches.
The Food and Drug Administration cleared Botox for migraines last month. According to analysts, the new use eventually could add $1 billion to yearly sales of Botox, which now are $1.3 billion.
The approval is the biggest expansion for Botox since the drug was approved for temporarily removing wrinkles in 2002.
Regulators approved Botox for use in people who have at least 15 headache days per month. Allergan estimates that 3.2 million Americans have chronic migraines. The approval also gives doctors the ability to prescribe Botox for other headache sufferers if they see fit.
The company plans to take data on Botox usage and patients to show insurers “that these people are legitimate and have been appropriately diagnosed,” Chief Executive David Pyott said.
Getting insurers to pay for Botox migraine treatments stands to take time and effort, “but we’ve done that many times before,” Pyott said.
Along with cosmetic use, Botox is approved for treating muscle and neck spasms, eye muscle disorders and excessive underarm sweating.
Only about 10% of the drug’s use now is covered by insurers, according to Marc Goodman, an analyst with UBS AG.
“Management expects a slow ramp due to injector training and limited reimbursement,” he said. http://tinyurl.com/27lyb65
The Food and Drug Administration
on Friday approved Botox
, the anti-wrinkle shot from Allergan
, as a treatment to prevent chronic migraines, a little more than a month after the company agreed to pay $600 million to settle allegations
that it had illegally marketed the drug for unapproved uses like headaches for years.
The agency’s decision endorses doctors’ use of Botox
to treat patients who suffer from a severe form of migraine
involving headaches on at least 15 days a month. Britain’s drug agency approved
Botox for the same use this summer.
Botox is already approved by the F.D.A. to treat uncontrolled blinking; crossed eyes
; certain neck muscle spasms; excessive underarm sweating
; and stiffness associated with muscle spasticity
in the elbows and hands. It also is approved for cosmetic purposes — to smooth lines between the eyebrows.
Botox had worldwide sales last year of about $1.3 billion, divided equally between medical and cosmetic uses.
But Allergan said sales of Botox for chronic migraine and other medical uses would soon eclipse sales of the drug as a wrinkle smoother. Allergan is also studying the drug for a variety of new medical uses, including overactive bladder
, said Dr. Scott M. Whitcup, the company’s executive vice president for research and development. http://tinyurl.com/252o8s4
In public relations, it’s known as “seeding the market” — stirring up excitement for a forthcoming product or application.
That is the charge leveled against Allergan, the maker of Botox
, in a phalanx of false-claims lawsuits and federal inquiries that resulted last week in the company’s agreeing to pay $600 million to resolve criminal and civil complaints of illegal marketing tactics.Allergan also agreed to plead guilty to one misdemeanor charge
of misbranding Botox from 2000 through 2005, but the company denied the other allegations. Allergan’s settlement
with the Justice Department resolves the latest crackdown by the federal government against major drug makers. Last year, Pfizer (PFE) and Eli Lilly (LLY) paid hefty sums to resolve federal charges of illegal marketing.
The lengthy federal investigation of Allergan tracked the rise of Botox in an ever-expanding market. Over the last decade, Botox has gained fame — and talk show notoriety — as a wrinkle killer. Along the way, the drug has become a blockbuster brand, with worldwide sales last year of about $1.3 billion, in no small part because it can also be used to treat a variety of muscle and gland disorders.
The Food and Drug Administration has over time approved the injections to mitigate uncontrolled blinking, certain neck muscle spasms, excessive underarm sweating, and wrinkles between the eyebrows. This year, the agency again expanded the use of Botox, permitting injections for increased muscle stiffness in the elbows and hands, and it is now considering whether to approve Botox as a preventive treatment for severe migraines.
Doctors are allowed to prescribe drugs in unapproved ways as they deem medically appropriate, but it is illegal for a drug maker to promote those unapproved, or off-label, uses. Court filings have described an aggressive marketing strategy, saying that Allergan financed and widely disseminated a video, featuring a well-known neurology professor, to promote Botox as a headache treatment; set up an educational Web site called the Neurotoxin Institute, registered by Ogilvy Healthworld, an advertising agency, to promote Botox treatments to doctors; and paid kickbacks to doctors to induce them to prescribe Botox.
“What concerns F.D.A. is that, if companies can promote off-label uses without submitting evidence showing the drug to be safe and effective, it potentially puts patients at risk and subverts the drug approval system,” Dr. Joshua M. Sharfstein, the principal deputy commissioner of the F.D.A., said.
Without an independent determination by agency experts on the optimal doses and precautions for a particular drug treatment, he said, doctors can wind up prescribing medications without good evidence.
Except for the one misbranding charge, Allergan has denied the criminal and civil accusations, including those of kickbacks and fraud, said Caroline Van Hove, a company spokeswoman, adding that the allegations were not proved. http://tinyurl.com/2vebj9o
U.S. regulators seem inclined to approve Allergan Inc's (AGN) wrinkle drug Botox to prevent migraine headaches in millions of Americans, industry analysts said, based on information the drugmaker released on Monday. Allergan shares rose 6 percent after it said the U.S. Food and Drug Administration requested information on how to safely market Botox for the extremely painful, recurring headaches. It gave details of the request as it reported better-than-expected quarterly results."The stock market is thinking that the FDA's request for risk-management information is a precursor to FDA approval" for migraines, said Credit Agricole Securities analyst David Maris."The market is excited because it's wondering why would the FDA ask for a program for training physicians if it wasn't going to approve it."Investors had expected the FDA's decision on Botox by Monday and see the added indication propelling sales of Allergan's biggest product. In Allergan's latest quarter, Botox sales rose 7 percent to $361 million. Analysts believe approval for the condition could boost its annual sales by $500 million or more.About 18 percent of U.S. women and 6 percent of men have migraine headaches at some time each year, according to the Merck Manual of medical information.Botox would be meant for the estimated three million Americans who have chronic migraines, meaning 15 or more headache days per month.Allergan said the FDA will delay its decision for three months after asking the company for an updated Risk Evaluation and Mitigation Strategy on how to safely market Botox for potential anti-migraine use.Allergan has already provided the FDA with the requested information, including a proposed plan on how to train physicians for the new use of Botox."We believe this strongly suggests that (the) FDA will approve Botox for migraine without requesting another study," Wells Fargo analyst Larry Biegelsen said in a research note.In clinical trials, Botox was given every 12 weeks to prevent migraines, via 31 injections into seven areas of the head and neck.In one late-stage trial, Botox failed its primary goal of reducing the number of headache episodes compared with a placebo. But it met a secondary goal, as those on Botox had headaches on average 7.8 fewer days each month, compared with a drop of 6.4 days among patients taking placebo.In a second trial, Botox patients had nine fewer headache days compared with a drop of 6.7 days for the placebo group.Botox seems to block brain messenger chemicals, called neurotransmitters, that transmit pain, said Dr. David Simpson, a professor of neurology at Mount Sinai Medical Center."Current drugs to prevent migraines are far from perfect, so this is a potential significant advance," said Simpson, who has been a consultant for Allergan on unrelated Botox studies. http://tinyurl.com/2vlwofd