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Allergan plan to sell Lap-Band division within two months

Allergan's HQ in Irvine, California
Interview with Bloomberg confirms intent to sell

Allergan hopes to sell their obesity intervention business in the first quarter of this year, according to the company’s CEO, David Pyott.

In an interview with Bloomberg, Pyott said: “There’s a lot of interest, some strategic companies, but especially in terms of numbers, private equity players. Sometime in the first quarter this will come to pass.”

The company, who manufacture the Lap-Band device, announced in October 2012 that they were considering a sale of the unit after disappointing sales figures.

The interview confirms that Allergan are seeking a sale of the unit rather than exploring another avenue to revive its fortunes. The company had previously said that they were considering a sale as part of “a very in-depth internal assessment process”.

Sales in their obesity intervention division, which sells the Lap-Band as well as the Orbera gastric balloon, have dropped in recent years: they announced in their October financial statement that they projected sales of $160m in 2012, almost half of their 2008 high of $296 million.

The Lap-Band’s popularity has dropped as questions have been repeatedly raised over the device’s safety and long-term efficacy. A 2011 study found that almost half of bariatric patients required their bands to be removed within 12 years.

At last week’s BOMSS 2013 conference, James brown, of City Hospital, Sunderland, UK, said that based on past trends he expected to remove at least 150 bands that he had previously implanted over the next three years. He said that in his opinion, the gastric band was an “historical” procedure.

Allergan are issuing their 2012 financial results on February 5, which is a likely opportunity for them to announce a sale.

Over the last three months, the company have acquired two companies: MAP Pharmaceuticals, who make neurological drugs, and SkinMedica, who make aesthetic skin creams and lotions.

Both acquisitions are closer to Allergan’s core businesses than their obesity intervention division, which make the company’s only two surgical devices. Their best-selling product is Botox, which last year sold in the region of US$1.8bn.

Allergan acquired the Lap-Band business in 2006 as part of a $3.1bn merger with medical aesthetics company Inamed, along with a line of breast implants.

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