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'Daewoong risk' could put a damper on AbbVie-Allergan mega-merger
  • By Lee Han-soo
  • Published 2019.08.07 16:22
  • Updated 2019.08.13 08:55
  • comments 0

Daewoong Pharmaceutical's launch of Jeuveau, its botulinum toxin (BTX) product, in the U.S. may overshadow the $63 billion merger between the two multinational pharmaceutical giants, AbbVie and Allergan.

Daewoong Pharmaceutical's botulinum toxin Jeuveau

The AbbVie-Allergan merger comes at a time when the AbbVie's shares plunged 21 percent in the past six months with its market cap falling to $107.5 billion.

It is no secret that Botox is one of the main reasons that AbbVie acquired Allergan as the company is aiming to diversify its portfolio away from Humira, its blockbuster autoimmune disease treatment.

Abbvie CEO Rick Gonzalez also told investors and analysts that the company plans to invest heavily in Botox to keep driving its growth, when the company first announced that it would acquire Allergan on June 26.

As Botox makes up about one-fifth of Allergan sales, the continued success of Allergan's Botox is critical to AbbVie.

Botox is still showing strong sales growth both in the U.S. and globally. In the second quarter of this year, the sales of Botox for cosmetic use amounted to $252.4 in the U.S. and $175.8 million elsewhere, up 6.7 and 10.7 percent, respectively, from the same period last year.

However, the 6.7 percent U.S. growth was somewhat meager when comparing it to the sales growth in the first quarter, which recorded a 16.7 percent increase year to year.

While the exact reason for the decline in sale growth is unknown, it is highly likely that Daewoong and Evolus' Jeuveau is one of the factors that caused the decline in sales growth.

While Evolus plans to report its second-quarter record next Monday, Daewoong's second-quarter figures have shown that sales for Jeuveau saw a 300 percent increase, from 5.5 billion won ($4.5 million) in the first quarter of this year to 18.6 billion won in the second quarter.

Different surveys by analysts have shown that U.S. doctors are also showing a generally positive view of Jeuveau.

"In some cases, doctors noted that the demand for Jeuveau even outstripped its supply," Fierce Pharma, a U.S.-based medical news outlet, said citing a report made by Louise Chen, an analyst at Cantor Fitzgerald. Chen's report showed that the vast majority of patients asked for Jeuveau. Fierce Pharma also reported that doctors in one survey said they expected to switch 43 percent of patients over to Jeuveau.

Daewoong plans to capitalize on the favorable response and raise its market share by actively promoting its product in the U.S. market through Evolus.

"The first and second quarter should be seen as a settlement phase for Jeuveau in the U.S. market," a company official said. "The company plans to further increase sales for Jeuveau from the start of next year by promoting the product through Evolus."

corea022@docdocdoc.co.kr

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