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Inamed Results Top Estimates

Before items, the company earned 52 cents a share in the first quarter.



said Monday after the markets had closed that its first-quarter revenue and adjusted earnings came in just ahead of Wall Street's expectations.

Including one-time items, the company earned $13.7 million, or 38 cents a share, on revenue of $105.2 million for the three months ended March 31. That compares with a profit of $17.5 million, or 49 cents a share, on revenue of $90.8 million for the same period last year.

Before items, Inamed earned 52 cents a share. On average, analysts forecast first-quarter earnings of 51 cents on revenue of $104.1 million.

Inamed incurred $5.2 million, or 14 cents a share, in special items due to merger costs as part of the Santa Barbara, Calif., company's desire to be acquired by



. So far, Inamed investors don't seem thrilled with the deal, which is valued around $2.8 billion.

On March 21, Medicis, of Scottsdale, Ariz., made a cash and stock bid worth $75 a share. On March 18, the last trading day before the deal was announced, Inamed's stock closed at $66.24. When the deal was revealed, the stock rose to $68.21. On Monday, it closed at $62.32.

Earlier this month, both companies said the Federal Trade Commission had asked for additional information about deal. They still expect to close the transaction by year-end.

Medicis specializes in dermatology products for such diseases and conditions as psoriasis, eczema and acne, as well as over-the-counter skin-care products. Inamed's products include breast implants, treatments for wrinkled skin and a device surgically inserted around the upper part of the stomach to reduce its capacity and thus treat obesity.

The Medicis acquisition isn't the only big question about Inamed's future. The company is waiting to hear if the Food and Drug Administration will change its mind on whether Inamed can sell silicone-gel breast implants for cosmetic surgery in the U.S. On April 13, an FDA

advisory panel rejected Inamed's application by a 5-4 vote, saying the company failed to provide enough information to demonstrate the implant's long-term safety.

That was the second recent defeat for Inamed. In October 2003, an advisory panel voted 9-6 in favor of an Inamed implant, but the FDA voted against approving the device in January 2004. The FDA said Inamed didn't provide enough information about long-term safety.

After the latest setback, Inamed executives said they would meet with the FDA to determine what they must do to make its product acceptable. "The company believes that the clinical data and related information support the safety and efficacy of its products," Inamed said Monday.

The advisory committee's rejection was made worse because the same panel

voted on April 14 in favor of a silicone-gel breast implant made by arch rival



. If the FDA supports the panel's decision, analysts say, Mentor will have a tremendous advantage.

Silicone gel implants have been off the market for cosmetic uses since 1992 due to the FDA's insistence on more rigorous testing and clinical trials than had been applied to implants which first reached the U.S. market in 1962. The FDA has had regulatory authority on the devices since 1976.

The implants are permitted for several restricted uses, such as breast reconstruction after a mastectomy. The FDA allows saline-filled implants to be used for cosmetic purposes, and Inamed and Mentor both make and market these products in the U.S.