News In Brief

Diversified eye care and aesthetic devices maker Allergan Inc. is exploring “strategic options” for its obesity intervention unit, including a potential sale of the business, the company announced Oct. 30 during its third-quarter earnings call. The obesity intervention unit, which makes the Lap-Band laparoscopic adjustable gastric banding device, generated sales of $37.4 million in the third quarter, down 24.7% from the same quarter last year. “The sales dynamics do not fit the profile of a high-growth company like Allergan,” CEO David Pyott explained during the earnings call. The firm also cited Allergan’s lack of scale in the general surgery market as a factor. “Lap-Band’s growth has been negatively impacted in recent years due to reimbursement issues and new competition from other brands, as well as the rise in popularity of gastric sleeving procedures,” noted Wells Fargo analyst Larry Biegelsen in an Oct. 31 report. A small Belgian study released last year pointed to poor long-term outcomes with Lap-Band, noting that about half the 82 patients in the study required removal of the band during the 12-plus-year follow-up period. (See Also see "Small Study Points To Poor Long-Term Gastric Banding Outcomes" - Medtech Insight, 28 March, 2011..)

“While we are confident in the long-term prospects of the [obesity] business, we also must consider the best potential for future development and clinical advancement may exist outside of the...