LAP-BAND sales in the U.S. are being impacted both by high unemployment rates, as well as reimbursement barriers and increasing co-pays, as employers shift cost to their employees… In the overall, U.S. bariatric market, which we estimate declined 6% year-to-date in November, bands declined in procedure share to 40% in November from 52% a year earlier, whilst bypass held steady at 34% and sleeve gastrectomy doubled from 11% to 22%.
Based on overseas experience, we believe that sleeve will reach a plateau. The only bright share data point is that LAP-BAND increased its share of the band market to 83%[i.e. JNJ’s Realize band had a 17% share].
Lap-Band addendum: The quoted passage in #msg-71672805 (“Based on overseas experience, we [AGN] believe that sleeve will reach a plateau”) requires some discussion since it’s not immediately obvious what AGN is saying. My interpretation is that AGN thinks the market share of sleeve gastrectomy will soon hit a ceiling due to the number of docs trained to perform it. I.e., even if every such doc is doing sleeve procedures all day every day, there are not enough of them to increase the market share above the low 20s.
This is not exactly a bullish argument for Lap-Band, however.
…we conclude that bariatric surgery represents a potentially useful strategy for management of uncontrolled diabetes, since it has been shown to eliminate the need for diabetes medications in some patients and to markedly reduce the need for drug treatment in others. In addition, among patients undergoing surgery, cardiovascular risk factors improved, allowing reductions in lipid-lowering and antihypertensive therapies.
Although the study in question did not include the LapBand device, the study’s conclusions are indirectly positive for the product, IMO.
Allergan is exploring strategic options for maximizing the value of its obesity intervention business, including among other things, a potential sale of that business unit.
LapBand is currently selling at an annualized rate of about $160M, about 3% of AGN’s overall sales.