Could AbbVie-Allergan merger 'disruption' open room for Botox competitors? Evolus hopes so

With regulator scrutiny of AbbVie and Allergan's $63 billion merger likely in its final days, both companies will soon face the arduous task of meshing into a single firm. But that process could take awhile—and leave opportunities for challengers to snag market share. Or so they hope. 

Evolus, maker of Botox competitor Jeuveau, believes the period after AbbVie and Allergan's merger could create a "disruption" to the blockbuster med's grip on the cosmetic aesthetics field and potentially "benefit new entrants," Wells Fargo analyst Jacob Hughes wrote in a note to investors this week. Namely, itself.

Instead of developing "complementary assets" for Jeuveau––such as dermal fillers––Evolus is crossing its fingers that a growing cosmetic market and a potential crack in Botox's share could help propel the drug into second place in the field, Hughes said. 

Despite its high hopes, Evolus has a long way to go to seriously compete with Botox, which hit $669 million in global sales––comprising its cosmetic and therapeutic indications––in the third quarter. Botox Cosmetic pulled in $235.6 million in sales alone. 

Jeuveau, still in its first full year on the market after an FDA approval in February, hit an estimated $18.5 million to $19.5 million in the fourth quarter, Hughes said. Evolus told Wells Fargo it believes the launch is "exceeding expectations," with re-orders up to 56% of total revenue in the fourth quarter, and the drugmaker is planning to roll out two customer loyalty programs in the first half.

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Despite the gap in sales, Allergan is very aware of Evolus after the Irish drugmaker filed a trade secrets theft case that, so far, has blown up in its face.

In August, a U.S. International Trade Commission (ITC) judge ordered Allergan to turn over details of its Botox manufacturing to Evolus and South Korea-based Daewoong as part of the discovery process in an investigation the Irish drugmaker requested in February.

But even with Evolus' intermediate win in that ITC case, the jury is still out. Hughes outlined three scenarios for the challenge––two of which would go Evolus' way––including an outright win in October when a final decision is due or a settlement with Allergan.

The third option, by far the worst for Evolus, would be a loss in the ITC dispute that would kick Jeuveau off the market. The case has an evidentiary hearing set for Feb. 2 and an "original determination" scheduled for June.