The $150 million LipoSonix purchase is the most recent in a string of what appears to be high-profile coups for Medicis. In 2006 the company spent $90.1 million to acquire the U.S., Canadian and Japanese rights to Paris-based Ipsen’s Reloxin, a botulinum toxin type A injectable already used aesthetically in 23 countries. Launched in the UK in 1991 to treat muscle spasms, it is expected to rival the muscle-freezing wonders of Botox, which contains a strikingly similar form of the toxin. The two strains were researched at chemistry labs run by the British and U.S. governments, respectively. Lending a royal air to his offering, which is expected to be available in the U.S. in 2009, Shacknai says, “Botox comes from the U.S.; Reloxin comes from Her Majesty.”
And last December the company invested $20 million in Revance Therapeutics, a Mountain View, California, firm working on a topical form of botulinum toxin type A. “They’ve got a way to deliver really large molecules through the skin [without a needle],” says Kane. While a cosmetic application may be the first way the technology is employed, Kane and some of his peers fantasize that the technology could also be used to administer vaccines, insulin and other medications currently delivered via shots.
How did a relatively small pharmaceutical company (small, that is, in comparison with the industry’s multibillion-dollar giants like Johnson & Johnson and Pfizer) become a leader in one of the most innovative fields in medicine? As Shacknai tells it, major drug companies have long been disinterested in dermatology, a category that he says has a revenue stream comparable to the earnings for a single cancer or diabetes drug. After working in health-care policy in Washington, D.C., and as a lawyer and consultant for companies like Key Pharmaceuticals, he saw an opening in the market in the late Eighties. Shacknai built an initial portfolio of what he says were “mundane products” developed both in and out of house for hyperpigmentation, rosacea, dermatitis and acne. Mitchell S. Wortzman, Medicis’s executive vice president and chief scientific officer, says that the company has always valued compelling science above all else, and that, unlike “big pharma,” it has no qualms about taking on products it did not invent or will not own outright. “We work on things that we think are important,” Wortzman says. “It’s not based on intellectual ownership of an idea.” To wit: Medicis holds only the North American rights to its most visible product, Restylane, which comes courtesy of the Swedish company Q-Med.
This open-minded approach lets Medicis move quickly, a significant advantage in such a rapidly changing environment. It’s part of what has allowed the company to compete so fiercely with a much bigger fish, Allergan, an outfit several times its size with a much broader product portfolio (its aesthetic holdings include Botox, the Restylane competitor Juvéderm and Natrelle silicone gel breast implants) and $4 billion in revenue last year. “As we did with Restylane, our idea is really to shift the paradigm and to open up the imagination to different kinds of therapy that hadn’t been taken seriously or haven’t been conceived at all. But if there are signals that a product isn’t what we thought it was, we have the discipline to bail,” says Shacknai, an affable executive whose work attire on the day we meet consists of unremarkable blue jeans and a short-sleeve button-down shirt. The casual dress is just the first sign that Shacknai is not your typical CEO: He calls thousands of doctors a year on their birthdays, attends all the dermatological and, now, plastic surgery meetings, and personally interviews each and every sales rep before he or she is hired. “He’s extremely popular among doctors, and he’s extremely visible, which is not true with all of his competitors,” says Wendy Lewis. “And he’s the only person I allow to call me Wendela.”