Allergan’s Botox Approved for Pediatric Limb Spasticity Amid Split-Up Rumors
Dublin-based Allergan announced that the U.S. Food and Drug Administration (FDA) has approved its wrinkle treatment Botox for children with upper limb spasticity. The news comes just days after rumors that the company may break up. The rumors came about after a conference call between the company’s vice president of investor relations, Manisha Narasimhan, on June 18 and Umer Raffat, an analyst with Evercore ISI.
In terms of Botox, the FDA granted approval of Allergan’s supplemental biologics application (SBLA) for patients ages 2 to 17 years with upper limb spasticity. The agency is also reviewing another sBLA for Botox for pediatric patients with lower limb spasticity, which is expected by the end of this year.
Spasticity, which is typically muscle tightness and stiffness, can be caused by damage to the brain and spine. Common causes of pediatric spasticity include cerebral palsy, traumatic brain injury, multiple sclerosis, spinal cord injury and stroke.
The agency’s approval was based on results from two Phase III trials evaluating Botox in more than 200 pediatric patients with upper limb spasticity.
“Pediatric upper limb spasticity is a significant concern and can negatively impact a child’s development and quality of life,” stated Mark Gormley, Jr., Pediatric Rehabilitation Medicine Specialist, Gillette Children’s Specialty Healthcare, St. Paul Minnesota. “Because spasticity is particularly debilitating to growing children, it requires ongoing care. Botox has a well-established safety and efficacy profile and I believe it will be an important treatment option in helping successfully manage upper limb spasticity in children and adolescents.”
Regarding the potential split-up of the company, analysts and activist investors have been urging it for some time, particularly pushing for a separate chief executive officer and chairman, both jobs currently held by Brent Saunders.
Although the company’s shares have decreased 4.1% this year compared to the industry’s drop of 17.1%, stock has fallen 25.7% in the last year and generally underperformed compared to its peers. Shares have dropped more than 60% since its high in 2015.
Some of this is related to loss of patent protection. Generic formulations of the company’s Namenda XR for Alzheimer’s and Estrace for menopausal women went on the market in the first quarter of 2018. Other drugs including Bystolic, Delzicol, Gelnique, Saphris and Viibryd will lose patent protection in the next couple years.
If there is a split, it would allow the company to focus more on its key therapeutic interests, central nervous system (CNS), eye care, and gastrointestinal (GI). The most obvious division would be to split off its therapeutics business from its aesthetics business.
Although it’s hard to say if there actually will be a split, Narasimhan’s answer to Raffat’s question suggested there will be news soon.
“We are evaluating all options, as Brent has said,” Narasimhan said. “There is a continued sense of urgency both for management and the board for ways that we think would unlock value. We’re working as quickly as we can and we hope to be in a position to be able to make an announcement over the next couple of months—I would say in a month or two.”
Raffat took that to mean some sort of split is on the way, writing in a note to investors, “I walked away with the sense that Allergan is heading towards a split and may likely lay out timelines.”
A little over a year ago Allergan described plans to sell its women’s health and infectious disease units, but so far, no action has been taken.