Medicis Employees Should Look Anxiously at Allergan Layoffs

Sales reps at Restylane-maker Medicis should look anxiously at Allergan’s announcement that its earnings and revenues are down. Allergan announced a “restructuring” to deal with the downturn — that means 460 employees will get the ax, the company said.

What does this have to do with Medicis? Well, both Medicis and Allergan are in substantially the same businesses, so what affects Allergan is likely to also affect Medicis. (And employees of Johnson & Johnson’s Mentor group might also want to bear this in mind.)

More importantly, Medicis CEO Jonah Shacknai already telegraphed to investors and BNET readers that he expects his business to decline. Here’s what he said to BNET back in October:

Jonah Shacknai: My perception from speaking monthly to several hundred physicians in the cosmetics category is there is a definite downturn nationwide. Previously the downward effect was felt more in the West, Southeast and a bit in the Midwest, but the phenomenon has now become national. The physicians that I speak to are sharing with me economic data suggesting flatness or declines in the 10 percent range. Certainly we see that reflected in our own business.

BNET: So what’s your guidance on the third and fourth quarters? Will sales be down?

Shacknai: We’ve presaged that this segment is weaker than it has been historically … I’ve been speaking about this for at least 12 months now as a likely phenomenon. What we saw for the first six months is that the rate of growth decelerated and in the second half, the rate of growth decelerated more to the point of flatness.

• See BNET’s previous coverage of Medicis:
• Medicis Solves One Solodyn Problem But Barr Pops Up With Another
• Medicis Squeezed in Vanity Pharma Death Match vs. Allergan and J&J
• Medicis Explains Sudden Increase in Company’s Deferred Tax Assets
• The Allergan-Medicis Vanity Pharma Death Match Is About to Get Complicated