Pharma

Court puts wrinkle in Merz attempt to compete against Allergan’s Botox

The Botox alternative developed by Merz Pharmaceuticals will remain barred from the market until next January unless the company convinces the court to modify restrictions imposed following a ruling that Merz stole trade secrets from a competitor. A federal judge in California last week ruled that Merz Pharmaceuticals and Merz Aesthetics took company information from […]

By Frank Vinluan on March 14, 2012 5:26 pm

The Botox alternative developed by Merz Pharmaceuticals will remain barred from the market until next January unless the company convinces the court to modify restrictions imposed following a ruling that Merz stole trade secrets from a competitor.

A federal judge in California last week ruled that Merz Pharmaceuticals and Merz Aesthetics took company information from Allergan (NYSE:AGN), including financial details and identities of Allergan’s physician customers. The information came from former Allergan employees who went to work for Germany-based Merz Group, whose U.S. headquarters is in Greensboro, North Carolina. Merz said today that it is pursuing measures to modify or terminate the parts of the injunction that limit cosmetic sales of Merz product Xeomin. Merz said that such changes are allowed “on the grounds that they have satisfied the examination and remediation process.”

Xeomin has been approved by the U.S. Food and Drug Administration for therapeutic uses such as cervical dystonia, a condition in which contraction of the neck muscles causes the head to turn or twist to one side. That indication received FDA approval in 2010. The drug also has FDA approval to treat eyelid spasms in patients who have been treated with Botox. FDA approval for the cosmetic use of improving frown lines between the eyebrows of patients came in 2011. Merz can continue to sell Xeomin for therapeutic applications. But under the court order, the company is prohibited from marketing Xeomin for cosmetic uses for the next 10 months.

According to court documents, Allergan claimed that seven of its Botox sales staffers who left to work for Merz took company information that they sent to personal email accounts or stored on flash drives. The information included a list of Allergan’s physician list for Botox. U.S. District Judge Andrew Guilford agreed with Allergan’s position that the sales representatives stole trade secrets, including Allergan’s plans to compete against Merz. Guilford said in his ruling that “the value of this information is incalculable.”

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