Could Allergan's Reliance on Stars Hurt It in War With Medicis?

In the vanity pharma war, Allergan continues to rely on celebrities while Medicis is relying more on price, and that could hurt Allergan. BNET noted that Medicis’ Botox competitor, Dysport, would be priced lower than the leading brand when it was approved in April.

The warnings make it more difficult for both companies to advertise their products to consumers. Allergan previously used Virginia Madsen in its campaigns. With that strategy hobbled, Allergan has to reconsider its campaign, CEO David Pyott admitted to analysts on their last conference call:

Greg Gilbert - Bank of America/Merrill Lynch: I assume given the boxed warning that TV and radio and expensive ads for Botox cosmetics could be more difficult. So, am I right in assuming that you’ll have a potentially significant chunk of money that reallocate to either other brand to protecting Botox in other ways? Thanks.

David Pyott: Well, I think first of all Scott’s kind of hoping I’ll just give him all the money; that’s just a joke. I think we well may and Scott’s still smiling, but on a serious sort of answer to a good question, of course there again is the advantage that we have not only Botox as a brand, as part of our staple, we have Latisse now, we have Juvéderm and of course Restasis is also a major brand, which we’ve invested that has worked really well for us.

So, literally the last two days we’ve had a lot of thinking to do and that’s one of the key questions I’m going to address next week with our marketing group to see what are the thoughts, now that we’re moving from, how do we deal with all these things in terms of the letters and announcement and our move back into execution of our brand strategies.

Medicis, meanwhile probably doesn’t have the money to get big stars like Allergan can. So it’s competing with a discount strategy, according to a recent note from Leerink Swan analysts Gary Nachman and Andrew Finkelstein:

The messaging to physicians is likely to be that the product works quickly and has persistence out to 4 months. MRX is clearly going after the “monster” accounts initially, and has a robust rebate program in place to provide financial incentives to the highest volume users.

It will be culturally difficut for Allergan to go downmarket in its positioning of Botox or its lash lengthener, Latisse. To get an idea of how close to Hollywood the company is, check out this B-roll press release footage from a Latisse promotional event featuring Brooke Shields, Mandy Moore, Debi Mazar, Jewel, Marisa Tomei and others.

• See previous coverage of Allergan and Medicis:
• Medicis Q1: One Day’s Generic Competition Cost Company Up to 17% of Solodyn Sales
• Allergan’s Q1 Nightmare: Profit Down; Black Box Warning on Botox Vindicates an Old Nemesis; “It’s All Medicis’ Fault!”
• Allergan Could Lose a Third of Botox Market With FDA’s Approval of Medicis‘ Dysport
• Medicis Doubled Pay of Exec Convicted of Off-Label Sales
• Medicis Employees Should Look Anxiously at Allergan Layoffs
• Medicis Explains Sudden Increase in Company’s Deferred Tax Assets
• Medicis Squeezed in Vanity Pharma Death Match vs. Allergan and J&J
• Q&A With Medicis CEO Jonah Shacknai, Who Sees a “Definite Downturn” in Vanity Pharma
• Medicis‘ Accounting Error Puts Spotlight on Solodyn Weakness; Allergan Rejoices
• The Allergan-Medicis Vanity Pharma Death Match Is About to Get Complicated