Shares of Breast Implant Makers Surge on Anticipation of Pending FDA Approval of Product

[Guest guest]

Officially they aren't approved YET . . . however, it

looks like the cat is out of the bag . . .As soon as

the insiders stop trading, they'll be ready to make an

announcement . . . probably on a Friday afternoon -

that's when they announce most of the things they are

ashamed about . . . or in the middle of the holiday

season where they hope it will get lost in the

shuffle!

Did I say something bad? . . . My computer is acting

up!!!

Rogene

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http://biz./ap/051102/breast_implants_movers.html?.v=1

AP

Breast Implant Makers See Shares Advance

Wednesday November 2, 4:56 pm ET

By Wallace Witkowski, AP Business Writer

Shares of Breast Implant Makers Surge on Anticipation

of Pending FDA Approval of Product

NEW YORK (AP) -- Shares of breast implant makers

surged Wednesday on the anticipation of a pending Food

and Drug Administration approval of silicone gel

breast implants after one company's fax notifying

clinical trial investigators came to light.

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Shares of Mentor Corp. rose $3.60, or 7.4 percent, to

close at $52 on the New York Stock Exchange. Inamed

Corp. shares climbed $2.26, or 3.1 percent, to $75.44

in regular trading on the Nasdaq, and continued to

rise 92 cents in aftermarket activity. Shares of

Inamed suitor by Medicis Pharmaceutical Corp. rose

$1.37, or 4.5 percent, to close at $32 on the NYSE.

As reported Wednesday in the Washington Post and a

CIBC World Markets research note, Mentor mistakenly

sent out a draft fax Oct. 25 telling clinical trial

investigators who implant silicone gel breast implants

for reconstructive purposes they would still have to

track study patients now that the FDA had approved the

implants for cosmetic use.

The letter was retracted Oct. 27, CIBC analyst

Calcagnini said in a research note. In an interview,

Calcagnini attributed the stock movement to

anticipation of an FDA approval of the implants

generated by the news of the fax.

Silicone-gel implants were banned for cosmetic use in

the United States 13 years ago, after thousands of

women claimed that leaking implants had damaged their

health. However, scientific advisers to the Food and

Drug Administration convened in April, clearing the

way to reintroduce the implants to the market. During

those meetings, Mentor's data elicited a panel

recommendation to the FDA for approval, whereas Inamed

did not.

In an interview, Lazard Capital Markets analyst

Arrow agreed the fact that the letter had

already been written rallied investors to buy shares

in the companies. However, Arrow disagreed with other

analysts in the belief that Mentor will get a head

start over Inamed for approval for safety reasons.

" Our research shows that what most likely will come

out is an equivalent synchronized decision: they could

both be approved, or they could both be denied, or

could both be asked for more data on the same day, "

Arrow said. " FDA's view and our understanding is that

being fair to the companies is less of a priority than

protecting the public health. "

Arrow backed up his opinion calling the panel

preference for Mentor's data over Inamed's in April as

" a popular misconception, " in that three panel members

who were instrumental in deciding the vote showed

concerns that would be of little to no importance in

an FDA decision. The analyst believes the level

playing field will lower the risk profile for the

devices.

Both Mentor and Inamed currently market saline-filled

breast implants for cosmetic use in the United States.

Some consumers believe the silicone-gel implants look

and feel more natural than their salt-water

counterparts.

Arrow also disagrees with the belief that silicone gel

implants will naturally be higher margin products than

saline-filled implants. Arrow said the average saline

implant, which is essentially a shell filled by the

surgeon, is about $400 and costs about $92 to make. On

the other hand, silicone gel implants must be filled

at the factory and undergo more rigorous quality

control. While silicone gel implants for

reconstructive purposes currently cost about $800,

Arrow said the market is unlikely to support double

the price once the implants are approved for cosmetic

use.

Mentor Corp. reported Monday that its fiscal

second-quarter profit fell 4 percent on

lower-than-anticipated sales of its breast implants,

as consumers held out for the silicone gel implants.

Profit slipped to $12.1 million, or 25 cents per

share, as revenue rose 5 percent to $114.2 million.

Inamed on Tuesday said that third-quarter earnings

fell 11 percent as expenses from the Medicis takeover

offset rising sales. Inamed earnings slipped to $14.9

million, or 41 cents per share, as revenue grew 17

percent to $105.2 million.