---

October 30, 2012  

As Sales Fall, Allergan Seeks a Buyer for Lap-Band

By ANDREW POLLACK

 

Allergan said Tuesday that it was looking to divest itself of its Lap-Band, the once-popular weight-loss device that has experienced several years of falling sales, loss of market share and controversies about its safety and effectiveness.

The falling sales “do not fit the profile of a high-growth company like Allergan,” David E. I. Pyott, the company’s chief executive, told analysts Tuesday morning on a call announcing the company’s third-quarter financial results.

In an interview, Mr. Pyott said Allergan had already hired an investment banking firm, which he would not name, and was sending letters to other medical device companies and private equity firms seeking a buyer for its obesity business, which also includes a balloonlike device that is not approved in the United States but is used in some other countries.

The Lap-Band, a silicone ring that is wrapped around the stomach and can be inserted in an outpatient procedure, once appeared to have a bright future as a less drastic, if less effective, alternative to gastric bypass, which involves rerouting the digestive tract.

But Allergan’s obesity business sales have fallen from a peak of $296 million in 2008 to an expected $160 million this year. In the third quarter, the sales fell by 25 percent to $37.4 million from a year earlier.

The obesity business, while still profitable, represents less than 3 percent of total product sales for Allergan, which is known most for its Botox treatment for wrinkles, migraine headaches and other conditions.

Although one-third of American adults are obese, the number of weight loss surgeries in the United States — about 160,000 a year — has stopped growing, largely because of the economy, Mr. Pyott said. Many patients pay out of pocket for weight loss surgery, and even when the procedure is covered by insurance, there can be a co-payment of thousands of dollars.

Mr. Pyott said Allergan had made progress in the last year in lowering barriers to insurance coverage, but it was not sufficient to reverse the decline in sales of the Lap-Band.

But gastric banding has also lost market share among weight loss surgeries, falling to about one-third from 44 percent a year ago, Mr. Pyott said. Lap-Band has most of the market among bands, although Johnson & Johnson also sells such a product.

Gaining in popularity has been sleeve gastrectomy, which involves cutting out part of the stomach. It is considered midway between banding and bypass in terms of both effectiveness and the degree of invasiveness of the surgery.

Dr. Marc Bessler, director of the center for metabolic and weight loss surgery at Columbia University, said that Lap-Band had lost some luster among bariatric surgeons because studies suggested it was not effective in the long run for one-third to two-thirds of patients.

“You had data coming out that 10-year outcomes are not what we were expecting,” Dr. Bessler said.

One study in Europe, for instance, published in The Archives of Surgery last year, reported that over 12 years, 60 percent of patients needed another operation, often to remove the band, because of complications or lack of weight loss. Allergan has said that techniques have improved since the patients in that study received their bands.

In 2011, Allergan succeeded in getting the Food and Drug Administration to approve use of the Lap-Band for patients with lower weight than had been previously required. But that did not bolster sales, in part because of difficulty getting insurance to pay.

The company dropped efforts to get the Lap-Band approved for use in teenagers after controversy arose about the product’s safety.

There have been news reports about problems, including deaths, from the band.

Allergan said its overall product sales for the third quarter rose 6.1 percent from a year earlier to $1.39 billion. Earnings per share, after adjustments, rose to $1.06 from 92 cents.

 

 

 

 

 

Log in to NYTimes.com

Close   E-Mail/Member ID: Password:Forgot your password? Log In Remember me     Close

Share

• Facebook
• Twitter
• Google+
• Tumblr

• Linkedin
• Reddit
• E-mail
• Permalink

 

 

This is the beginning of the end for the band... and it's about time. I absolutely hate to think of all of us who are damaged by this device.

 

 

Thanks Mary for this article....it's all making sense now, based on the information that I got from my surgeons office of how sales have DECLINED with the new AP SYSTEM because they WERE NOT COMPARABLE TO THE OLDER BANDS.

Since Allergan took over and they replaced the old GOOD BANDS with the new AP SYSTEMS....that's when the problems started....ACTUALLY THE OLD BANDS MADE THIS COMPANY SALES SOUR...NOT THE NEW AP BANDS.....as indicated they MADE MORE MONEY IN 2008 AFTER THE RESULTS OF THOSE OLDER 4CC AND VG BAND patients success was recorded.. MOST OF THE COMPLAINTS STARTED from 2008-2011.

I've been saying for a while now that the band will be obsolete in the US within the next ten years.  I feel like many of us got caught up in the swell of a new cult, and for many the thrill is gone.

Isn't it interesting how Allergan is bailing once the cash flow slows down?  So much for their commitment to the product.

And yes, I get that Allergan is in business to make money.

Yeah they want to get out before someone files a class action suit and sues them for every penny they claim they don't have, altho they still made 37 million last year off of us and our suffering! Shows what the company is made of!

This is a very good article but as one report was from Europe 12 years ago I don't see were that would lead one to believe that old was better than the new band.  They may be but, I have yet to see statistics showing this.  We are just behind Europe like always, they were getting out while we were getting into them.  Up to 60% failure.