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Botox Makes Allergan Worth a Shot

Clinical trial requirements and the lack of interchangeability mean that Botox remains a wide-moat franchise.

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The market has punished  Allergan (AGN) over concerns that Botox will face declines, but we still think the product is well positioned and see value in the wide-moat firm.

We do expect the biosimilar Botox that Revance and  Mylan (MYL) are developing will slow sales. Our forecast assumes a roughly 1% market share loss per year over the near term, which is consistent with the previous launches of other neurotoxins like Dysport and Xeomin in the United States. Still, Botox is an unusual product and the market underappreciates the defensibility of the franchise.

Michael Waterhouse does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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