Allergan looks to trump Medicis in bid to acquire Inamed

Santa Clara, Calif.-Inamed Health, a Santa Clara-based manufacturer of breast implants and cosmetic treatments, may be shunning one corporate suitor in favor of another.

In the wake of an unsolicited $3.2 billion acquisition bid made in November by Irvine, Calif.-based Allergan, Inamed’s board of directors is mulling whether to accept that offer instead of a $2.8 billion bid made in March by Scottsdale, Ariz.-based Medicis Pharmaceutical, makers of wrinkle treatment Restalyne.

In a Nov. 14 preliminary proposal letter to Inamed Chairman/C.E.O. Nicholas L. Teti, Allergan Chairman/C.E.O. David E.I. Pyott wrote that in addition to Allergan’s bid being higher than Medicis’, the latter firm’s acquisition proposal has spurred an antitrust investigation by the Federal Trade Commission-a scenario Mr. Pyott writes is unlikely to occur with its proposal, at least partly because Allergan will agree to divest Inamed’s license to its botulinum toxin type A product Reloxin. This action, writes Mr. Pyott, would minimize a potential federal antitrust investigation and, in turn, minimize delays in approving the transaction.

Industry observers say Allergan is interested in Inamed’s BioEnterics Lap-Band System, a non-invasive treatment for obesity, and that if its offer is accepted and the acquisition deal finalized, Allergan could benefit from potential renewed sales of Inamed breast implants. Inamed has been seeking approval from the Food and Drug Administration to resume sales of silicone gel-filled implants, which have been restricted for the past 13 years. In September, Inamed became the second implant maker to receive an FDA “approvable letter,” which is considered a major step toward gaining federal approval to market a product.

At press time, Inamed would make no comment on the Allergan bid other than to note that following a special meeting, the Inamed board determined that the bid is “reasonably likely to result in a ‘Company Superior Proposal’ ” and that the board “directed Inamed management to evaluate the Allergan proposal.”