Big pharmaceutical companies aren't at a crossroads so much as on the edge of a cliff. Thanks to a special provision in patent laws for drugs, companies lose intellectual property protection on pharmaceuticals after 20 years. After that, exclusive rights to the drugs fall into an abyss of competition from other companies making much cheaper generic versions. The point at which pharma companies lose exclusive rights to their drugs is called the patent cliff.
Allergan launched a marketing campaign to promote Botox for treating migraines, despite the fact that the FDA never gave it the green light. As punishment, the company received a bill for $600 million -- in the form of a fine and settlment -- from the Department of Justice.
Allergan is in a tough spot. It manufactures Botox, the blockbuster cosmetic product that's made with a diluted form of the most potent toxin on the planet. America's favorite smile-line smoother is safe to use, but a new paper in Scientific American suggests that the global market for the cosmetic treatment could indirectly create an international security threat -- one that Allergan should help sidestep.
The Food and Drug Administration may have caused pandemonium on Park Avenue and Rodeo Drive with its announcemenet late last week of a safety review of the famed cosmetic therapy, Botox. But on Wall Street at least a few financial analysts are advising investors to buy shares of Botox maker Allergan while they're cheap.
The market for painkillers for the shooting pain associated with cancer, diabetes and shingles is expected to soar over the next decade, driven by a largely untapped patient pool of millions of Americans.
Investors will be watching for a couple of key earnings statements and some movement in the trade deficit Tuesday morning, looking for either positive or negative signs that could help shake the market out of its weeks of stagnation.