Doctors expect enthusiasm for Allergan's high-flying Zeltiq to fade: survey

Allergan’s fight-fighting remedy Zeltiq has been on a tear as of late, but doctors aren’t expecting that trend to last as long as they once did.

Long-term expectations for the product “are moderating,” Bernstein analyst Ronny Gal wrote in a Tuesday note to clients. Doctors who use Zeltiq “increasingly view it as less material for their practice longer term,” he said, adding that 48% of the high-volume aesthetics physicians he surveyed in March held that opinion, versus the 21% who held it six months ago.

As a result, the CoolSculpting system, while still growing, “may flatten below estimates,” Gal predicted—and that’s not great news for a company whose lead seller, Botox, has competitive threats on the horizon.

While Gal himself once dismissed an in-development Botox rival from Revance as nothing to worry about, he’s since changed his tune after doctor surveys suggested the candidate could give the Allergan blockbuster a run for its money. And earlier this month, Revance teamed up with generics giant Mylan to develop a cheaper copy of the medication.

That piece of news is just one of the recent negative items weighing on Allergan’s shares. Its second-best-seller Restasis, an eye drug, could also soon be facing down generic competition thanks to an October federal court decision, and that prospect spurred Allergan in January to embark on a cost-cutting drive.

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More recently, the company backtracked on its “no breakup” stance, telling investors it would be conducting a strategic review to consider asset sales—and fast.

Meanwhile, though, Allergan doesn’t plan to let those Zeltiq predictions come true. In November, commercial chief Bill Meury said the Dublin drugmaker had upped its DTC spending on the product “to drive awareness and demand.” And earlier this year, it rolled out “Not Cool vs. Cool,” a multichannel campaign for Zeltiq featuring figure skater Johnny Weir and golfer Ian Poulter.