What Price Vanity? About $2.8 Billion

[Guest guest]

Note from Ilena: A few years ago, there were other SEC

Investigations of Inamed ... here are the Rulings.

http://www.sec.gov/litigation/litreleases/lr16466.htm

SEC Files Settled Financial Fraud Case Against Inamed Corporation's

Former CEO McGhan

http://www.sec.gov/litigation/admin/34-41751.htm

What Price Vanity? About $2.8 Billion

Mon Mar 21, 2005 12:20 PM ET

CHICAGO (Reuters) - Skin products maker Medicis Pharmaceutical Corp.

(MRX.N: Quote, Profile, Research) on Monday said it agreed to buy

breast implant maker Inamed Corp. (IMDC.O: Quote, Profile, Research)

for $2.8 billion to capitalize on the growing market for cosmetic

treatments.

The deal is pegged on the fast-growing vanity market, fueled by

demand from aging baby boomers and other image-conscious consumers,

the companies said.

" It would create a one-stop shop for dermatologists and plastic

surgeons, " said Schumacher Hoggatt, an analyst at Hibernia

Southcoast Capital.

Inamed, which is trying to convince regulators to allow silicone-

based breast implants back on the market, is growing on soaring

sales of its obesity products, including a device used in lieu of

gastric bypass surgery. Sales of breast implants made from other

materials are also rising.

Both companies make wrinkle treatments and Inamed is working on a

rival to Allergan Inc.'s (AGN.N: Quote, Profile, Research) popular

Botox.

Shares of Santa Barbara, California-based Inamed rose about 3

percent on the Nasdaq on the news, while Medicis shares sank about 8

percent on the New York Stock Exchange.

The U.S. Food and Drug Administration will next month consider for

the second time Inamed's bid to reverse a 12-year-old ban on

silicone breast implants.

Some analysts questioned whether the deal would be as valuable if

the FDA rejects the bid.

" If Inamed does not win approval of silicone breast implants in the

U.S., this could be a negative, " Maris, a Banc of America

analyst, said in an investor note.

Thousands of women said they suffered a range of conditions caused

by the silicone implants, including autoimmune diseases such as

lupus and rheumatoid arthritis, leading to a slew of lawsuits and

recalls of the products made by several manufacturers.

Inamed last week disclosed that the Securities and Exchange

Commission has begun a formal private investigation related to one

style of its silicone gel-filled breast implants.

TRIM PROFIT IN 2005, ADD IN 2006

Under the deal, Inamed stockholders will receive 1.4205 shares of

Medicis common stock and $30 in cash for each share of Inamed common

stock. Based on Medicis' closing price on Friday, the deal is worth

$75 per Inamed share, or about $2.8 billion overall, the companies

said.

The deal represents a 13 percent premium over Inamed's Friday close

of $66.24 on the Nasdaq.

sdale, Arizona-based Medicis said the deal would reduce 2005

profit and add slightly to earnings in 2006. Both forecasts do not

include new products.

In January, Medicis said it expects fiscal 2005 earnings of $1.43

per share excluding special charges.

Analysts on average expect Medicis to earn $1.44 in fiscal 2005 and

$1.64 in fiscal 2006, according to Reuters Estimates.

The combined company will have annual revenue of more than $700

million, operations in more than 12 countries, businesses in over 60

countries, and about 1,500 employees.

The companies expect the transaction to close by the end of 2005.

Deutsche Bank Securities is financial advisor to Medicis; JP

is financial advisor to Inamed.

Latham & Watkins are attorneys for Medicis, and on & Foerster

are counsel to Inamed.

Shares of Medicis fell $2.66, or 8.4 percent, to $29.02, while

Inamed rose $2.20, or 3.3 percent, to $68.44. (Chicago Newsdesk, 312-

408-8787)

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www.BreastImplantAwareness.org