The global facial aesthetics market was valued at $2.5 billion in 2013 and is forecast to reach $5.4 billion by 2020, at a CAGR of 11%. Future growth will be driven by sustained economic recovery in developed countries such as the US, aided by increasing awareness among the general public of the facial injectables available to them. The focus of companies such as Allergan on Direct-to-Consumer (DTC) marketing has been effective in expanding patient demographics from exclusively wealthy individuals to a wider range of people. Individuals born during the 1980–1994 period present a significant opportunity for companies in this market to sustain revenue growth in the future as this demographic is seeking age reversal techniques earlier than their predecessors. Recurring revenue from facial injectables encourages beauty clinics and medical practitioners to continue to recommend facial injectables such as Botox and dermal fillers to their patients. Topical neurotoxins which are expected to be launched by early 2016 will have a significant impact on the facial aesthetics market. As patients increasingly prefer non-invasive age reversal techniques, topical neurotoxins will replace injectable Botox products such as Botox Cosmetic and Dysport. Increasing job opportunities for women in developing economies such as India and China is leading to higher disposable income which drives the demand for facial aesthetic procedures. The global facial aesthetics market is highly exposed to economic volatility as aesthetic procedures are elective and purely cosmetic. These procedures lack reimbursement which is another major drawback as any economic uncertainty or insecurity at work may result in people refraining from opting for facial aesthetic procedures.
Allergan dominates the global facial aesthetics market with a share of 58% in 2013. The company enjoys dominance in the Botox segment as its brand Botox Cosmetic remains the most preferred brand worldwide, accounting for a 76% share in the global Botox market. The company’s presence in the global dermal fillers market stood at 38% at the end of the fiscal year ended 2013. Allergan has been able to sustain its leadership position in both the Botox and dermal filler segments despite the entry of new products such as Dysport in 2009 and Xeomin in 2011. The company has invested heavily in DTC advertising in recent years which has resulted in increasing awareness of the company’s facial aesthetic products and their effects. The company’s DTC expense stood at $180m in 2013. Allergan’s strong lead in the Botox segment is expected to come under pressure once topical neurotoxins
such as RT-001 are approved in the US and rest of the world. Though this will not occur before 2016, the
expected impact of topical neurotoxins cannot be understated. Allergan faces increasing competition in the dermal fillers segment with Valeant Pharmaceuticals holding 22% share in 2013. The competition is more intense in Europe where there are a number of local dermal filler brands that compete with Allergan’s Juvéderm and Valeant’s Restylane line of products. In Asia-Pacific, Medytox is the leader of the Botox segment and competes with Allergan.
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In April 2014, Valeant offered to acquire Allergan in a cash and stock purchase consideration of $45.7 billion. However Allergan rejected the deal as the company focuses on its strategy to remain independent and make acquisitions to sustain leadership position in the global facial aesthetics market. If the deal was approved, Valeant would have become the undisputed leader in the global Botox and dermal fillers markets. The deal is in line with Valeant’s growth strategy to become one of the largest drug makers in the world and will enable Valeant to be the dominant presence in both the Botox and dermal fillers segments. The deal would have strengthened Valeant’s market share in Botox market to 90% and in dermal fillers market to 60%. Valeant would also have benefitted from the robust pipeline portfolio of Allergan and the strong brand loyalty that Allergan has enjoyed over the years for its flagship brands Botox Cosmetic and Juvéderm. Allergan’s decision to reject the deal followed the company’s unsuccessful efforts to convince medical device giants such as Johnson & Johnson and Sanofi to acquire the company
The US market for facial aesthetics was valued at $1 billion in 2013 and is forecast to reach $2.5 billion by 2020 at a CAGR of 10%. According to the American Society of Aesthetic Plastic Surgery, the frequency of facial aesthetic procedures grew by 21% in 2013 (ASAPS, 2013). The growth of the US facial aesthetics market has been increasing steadily in line with the sustained recovery of the US economy since 2010. The US market grew at 22% in 2012 followed by 21% in 2013. The number of Botox procedures grew by 15.6% in 2013 and the number of Hyaluronic Acid (HA) filler procedures grew by 31%. Botox Cosmetic, Dysport and Xeomin are the only Botox products approved by the US Food and Drug Administration (FDA). Xeomin was able to join the US market after the completion of its injunction in 2013 due to a lawsuit filed by Allergan. The injunction was against Merz Aesthetics; the manufacturer of Xeomin.
It has been proven that Merz recruited Allergan’s employees and accessed confidential information related to Botox Cosmetic. This injunction led to Xeomin being banned from the US market for 12 months, whilst legal proceedings took place. The US dermal fillers market is dominated by Allergan and Valeant Pharmaceuticals. Allergan’s Botox Cosmetic and Valeant’s Restylane accounted for more than 75% of the US dermal fillers market in 2013.
The US market accounted for 42% of the global facial aesthetics market in 2013, which is expected to decrease to 38% by 2020. As awareness of the benefits of facial aesthetic procedures increase in developing countries, the contribution of the rest of the world to the global market is expected to increase accordingly. In particular, countries such as India, Korea and China are expected to witness rapid growth in the global facial aesthetics market by 2020.
HA fillers are expected to be the fastest growing segment during the forecast period. The global market for HA fillers was valued at $1 billion in 2013 and is expected to exceed $2.5 billion by 2020 at a CAGR of 15%. HA filler procedures have become affordable, with many local entrants competing with the leading companies in this market. In Europe, HA fillers are sold at half the price of HA fillers sold in the US as there is intense competition in the market. Europe has many players, particularly in the dermal fillers segment, which has led to increasing competition driving down prices. HA fillers are associated with good safety profiles and cause minimal patient discomfort which is the major driver for the rapid growth of this segment. The ingredients of HA fillers are a natural constituent of the human body as HA is responsible for the production of collagen. Unlike polymer fillers, HA fillers are completely biodegradable and do not contain any toxic monomers that lead to adverse effects. Procedures using HA fillers are non-surgical as HA enters the blood stream gradually and its effects are temporary.
The global facial aesthetics market is highly exposed to economic slowdown as procedures are elective and purely cosmetic. During times of economic slowdown, there is high risk of previous patients opting to defer facial aesthetic procedures which could negatively impact market growth. As these procedures are cosmetic, there is no harm if these procedures are not performed. The above figure shows how demand for facial aesthetic procedures decreased during the economic downturn in the US in 2008 and remained flat through to 2010. The growth in demand recovered only when the economy demonstrated sustained recovery in 2011. In 2012 and 2013 the US market witnessed a rapid increase in line with the rebounding US economy. This shows that facial aesthetic procedures are highly exposed to economic uncertainties which are a major threat to leading companies such as Allergan and Valeant in this market. As companies try to diversify into developing economies such as India and China, which show significantly greater potential for growth during the forecast period, the high dependence on the US economy will remain a major threat.
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