Botox Maker Allergan Gets a Lift From Asia

By the Financial Times (Financial Times) -- Allergan, the pharmaceutical company that makes Botox and breast implants, is increasing its investment in Asia to capitalise on growing demand for procedures that create larger noses and more defined jaw lines.

David Pyott, who has been Allergan's chief executive since 1998, said he has seen cosmetic trends being born in South Korea, spreading across Asia and landing in heavily populated Asian communities in cities such as Los Angeles, San Francisco, Sydney and London. Asian women are increasingly using Botox to atrophy the muscles around the jaw to create more squareness, and using Allergan's Juvederm filler to create more pronounced noses.

"Most of this started in South Korea, which is the Garden of Eden of cosmetic treatments," Pyott told the Financial Times. "Then it follows the trade route."

South Korea has become famous for exporting popular culture to other parts of the world. Known as the "Korean Wave", or Hallyu in Korean, South Korean music, movies and now cosmetic trends are quick to catch on in neighbouring countries.

For Allergan, growing wealth and changing conceptions of beauty in emerging markets represent a new frontier.

Emerging markets account for about 15 per cent of Allergan's annual sales, and revenues in Asia were up 36 per cent from a year ago in its latest quarter. Allergan has been shifting away from distribution agreements in many countries and setting up direct selling operations in countries including South Africa, Turkey, Poland, the Philippines and Russia.

The push has not been without pitfalls. Allergan was drawn into controversy last year when a study in Scientific American suggested that the popularity of Botox overseas was leading to growing counterfeit versions and claimed that its active ingredient had the potential to be used as a biological weapon.

Botox, which is used to smooth wrinkles, treat overactive bladders and relieve migraine headaches, is made from botulinum toxin, which can cause paralysis in large doses.

Allergan argued that the charges were baseless but promised that it was working closely with foreign governments to crack down on illegal manufacturing of its top-selling drug.

Pyott acknowledged that some Chinese companies have tried to produce their own versions of Botox, but said wealthy users of the treatment in big cities wanted Allergan's drug. In Asia, he said, real Botox is equivalent to an aspirational, luxury item.

"It's like the difference between a Chrysler and a BMW," Pyott said. "In Shanghai or Beijing, they want the real thing. They want to buy what people are buying on Park Avenue or Rodeo Drive."

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