As fewer consumer head to the doctor’s office for cosmetic surgery during the recession, companies like Allergan, the makers of Botox Cosmetic, are feeling the pinch. Allergan recently reported a 58% decrease in profits for the first quarter, as demand for Botox and other cosmetic products dropped with the rise of the recession.
Allergan’s net income dropped to $45 million from $108 million a year ago, and sales of Botox dropped about 18%. Botox sales account for nearly a third of Allergan’s revenue, but with the state of the economy, sales have been dwindling fast and showing few signs of recovery.
Sean Lavin, an analyst for Lazard Capital Markets in New York, points out that Allergan’s growth is dependent on the health of the economy, and the economy will need to change significantly over the next few quarters for the company to be able to resume the growth it experienced in 2008. (Source: LATimes.com)
Not only is Botox suffering from the impact of the recession, but they are also now battling stiff competition. Dysport, another treatment that helps fight wrinkles and can treat several health conditions, has been approved for sales as an anti-aging treatment. Dysport is a more affordable alternative to Botox, and is currently being released in select markets. Allergan will now have to restructure its marketing and sales program to avoid losing prospective sales to Ipsen, the makers of Dysport, and find ways to resume the rapid growth it experienced in years past.
Allergan is also the maker of Juvederm, another dermal filler that helps fight wrinkles; Latisse, an eyelash enhancing treatment that helps speed up the growth of the eyelashes; and Natrelle Pre-Consultation Breast Implant Kits, a set of ‘trial’ implants and educational materials designed for women who are considering plastic surgery.