Can Allergan's spruced-up aesthetics lineup shake off 'meh' Kybella growth?

Allergan California
Allergan execs have said Kybella's sales could one day rival those of blockbuster Botox.

Allergan CEO Brent Saunders has said 2017 would be the “pivotal” year for aesthetic product Kybella. But with the year now more than halfway through, one analyst describes the product’s launch as “meh.”

After surveying 100 high-volume aesthetic docs in the U.S., Bernstein analyst Ronny Gal determined that the chin-fat reducer “increasingly looks like a modest product,” he wrote in a note to clients last week. And what’s more, physicians “increasingly see it as niche,” he said.

Allergan had not returned a request for comment at press time.

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That’s not a description one might expect for a product its maker says has the potential to rival Botox, the blockbuster toxin that Allergan’s developed for everything from wrinkles to migraines. And it’s also not one that’s likely to thrill investors, considering Saunders’ reassurance at January’s J.P. Morgan Healthcare Conference that “Year 2 is pivotal to the launch of a medical aesthetic product.”

That’s not to say the product won’t grow, though. Forty-five percent of the medical practices Gal surveyed do body sculpting, and the practice “is expected to make gradual penetration to others,” he wrote.

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The good news? Kybella isn’t alone in Allergan’s sculpting lineup. Back in February, the company inked a $2.47 billion deal to nab fat-freezing system Zeltiq, a product Saunders touted as “best-in-class.” And that treatment is killing it, Gal noted. It “dominates the segment” with 78% placement, and “among users is growing at 9% sequentially” with 8% growth forecast for Q3.

“Long term, users expect it to be similar to line fillers in terms of adoption,” he wrote—meaning it could land in the $500 million to $1 billion sales range.

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Elsewhere in the Dublin drugmaker’s aesthetic portfolio, new rosacea treatment Rhofade, which snagged regulatory approval in January, already looks good, Gal pointed out. “Familiarity with Rhofade is at ~75% of practices,” he said, adding that 30% of the docs he surveyed described themselves as “very excited” about the therapy.

And with that in mind, he’s not too worried about Kybella’s impact on the overall aesthetics business, which generates about 35% of Allergan’s operating income.

“Zeltiq and Rhofade look reasonably strong and as Meatloaf says, 'two out of three ain't bad,'” he wrote.