The Wall Street Journal-20080124-Estee Lauder- Allergan Set Product Deal
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Estee Lauder, Allergan Set Product Deal
Coming this fall to certain doctors' offices: A new upscale skin- care line from Estee Lauder Cos.' Clinique Laboratories and Botox- maker Allergan Inc. that won't be available from retailers and represents the next step in the blending of cosmetics and aesthetic medicine.
Today the firms are set to announce a partnership that will combine Clinique's product-formulation expertise with Allergan's clout among dermatologists, plastic surgeons and other doctors specializing in aesthetic treatments. The products will be sold exclusively through physicians, a strategy reflecting the increasing importance of doctors' offices as retail space.
That trend is particularly robust in dermatology. Consumers are increasingly consulting physicians for product recommendations in hopes of getting more science-based advice than is readily available online or at cosmetics counters. Physicians, for their part, are seizing on product sales to bolster their practice income.
The new line will carry a variation on the Clinique name and likely will be priced at a premium over Clinique's retail-store brand as well as Allergan's existing physician-dispensed skin-care products, including Prevage MD, M.D. Forte and Vivite. Some new products will be created to complement and speed recovery from aesthetics procedures, such as laser treatments and microdermabrasion. The products may include medical-grade ingredients that tend to add to the cost and the effectiveness of skin-care products.
"The big idea here was: How do we really become a leader in skin care?" said Allergan Chairman and Chief Executive Officer David E. I. Pyott. The Irvine, Calif., company's existing line is familiar to skin-care aficionados but lacks the broad consumer appeal of Clinique, which is the top-selling prestige brand in department stores. Mr. Pyott said Allergan also was drawn to Clinique because of its dermatology heritage. Clinique has long had a presence at medical dermatology meetings and a co-founder was a dermatologist.
The "most vibrant channel" in skin care today is the physician's office, said Lynne Greene, global president of Clinique Laboratories in New York. She said the Allergan partnership grew out of conversations she and Mr. Pyott had beginning more than a year ago. Physicians consulted in focus groups have confirmed that the companies have "a natural affiliation," she said.
The new line will be Clinique's first to be sold exclusively by doctors. Clinique's makeup and skin-care products, which are fragrance-free and allergy-tested, are sold in more than 135 countries and online.
The physician channel is only about $238 million in sales but growing at a double-digit rate, Allergan said. Others in the market include Obagi Medical Products Inc. and L'Oreal, which sells SkinCeuticals and La Roche-Posay. Mr. Pyott said he expects the new Clinique/Allergan line to significantly increase the overall market, which is still in its infancy. Financial terms weren't disclosed.
The move is the latest for Allergan, a specialty pharmaceutical company expanding its portfolio in medical aesthetics, especially in facial rejuvenation, since buying a small California company in 2006. Allergan, best known for Botox, also sells another popular antiwrinkle treatment, Juvederm, that works through a different mechanism than Botox's.
