Allergan plc (NYSE: AGN) continued to dominate in the tissue expander market as the demand for plastic surgeries is increasing from the past few years across the globe. The company’s growth in the tissue expander market will be beneficial for AbbVie (NASDAQ: ABBV), which plans to purchase the botox maker Allergan for about $63 billion in cash and stock.
However, a dozen advocacy groups and unions urged the Federal Trade Commission to consider blocking the merger due to medicines price hikes, controversial rebate deals, and aggressive patent enforcement strategies. Will the deal continue as expected by the market? This question remains unanswered as the companies anticipate the FTC approval before the year-end.
The purchase of Allergan is expected to possibly buy more time for AbbVie to build pipeline with other clinical products. AbbVie will gain from a host of portfolio products including Botox from Allergan. This helps AbbVie to diversify away from relying on Humira for sales.
Meanwhile, analysts and investors expect the combination of the two companies with their own issues won’t find the solution but the issues get multiplied. AbbVie’s rheumatoid arthritis drug Humira is now facing competition from biosimilar drugs in parts of Europe. Humira will also see competition in the US market starting in 2023 when the patent expires. Allergan’s Botox also faces a cheaper biosimilar competition.
Traders, in contrast, believe that the merger could clear the path for the combined company to mix their drugs and start trials on the different combination of their drugs for various ailments. For offsetting Humira sales due to biosimilar competition, AbbVie is likely to look into new drugs and Allergan’s aesthetics portfolio, including wrinkle treatment Botox.
The plastic surgeries demand could rise due to the growing prevalence of breast cancer, increasing incidences of road accidents, and a rising number of trauma cases. In the US, breast reconstruction remained the top five cosmetic surgical procedures, followed by liposuction.
The global tissue expanders market accounted for over $965.5 million in 2017 and is expected to grow at a compound annual growth rate (CAGR) of 6.8% during 2019 to 2026 forecast period, according to a report from Straits Research.
For compensating the weakness in Humira, AbbVie has focused on rheumatoid arthritis drug Rinvoq, which received approval from the US Food and Drug Administration during mid-August. From adjusting the weakness in Humira in treating psoriasis, AbbVie has taken up Skyrizi. The market analysts expect the Skyrizi and Rinvoq sales to match Humira record with the aid of inflammation market growth.
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