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Inamed becomes the second U.S. company to move closer toward marketing approval for its silicone breast implants.

September 21, 2005

Medical device maker Inamed took a step closer Wednesday toward gaining U.S. Food and Drug Administration approval for its silicone gel-filled breast implants, sending its shares up nearly 9 percent to a 52-week high.

Inamed is the second silicone implant maker to receive an FDA "approvable letter," which is generally seen as a key step in obtaining agency approval to market a product. In April, an FDA advisory panel voted to send rival Mentor a similar notice.

Inamed’s news drove its stock up $6.33, or 8.9 percent, to $77.39, a 52-week high on Nasdaq. Meanwhile, rival Mentor’s shares fell $1.86, or 3.5 percent, to $50.70.

Jayson Bedford, an analyst with Adams Harkness, said he expects Inamed and Mentor to gain approval for the implants by early 2006.

"[Federal Trade Commission] clearance is the only remaining hurdle and we expect both companies to satisfy any FTC requirements," Mr. Bedford said.

Inamed agreed to merge with Medicis, a Scottsdale, Arizona-based pharmaceutical company, in March. If Inamed gains final approval for its silicone breast implants, Mr. Bedford said the implant sales in 2006 could add another $35 million to the $700 million in expected revenue for the combined company. Mr. Bedford expects the merger to go through by the end of this year.

Overall, Mr. Bedford said silicone breasts could add $70 million to the U.S. breast implant market, which he currently estimates at about $400 million.

Earlier this year, an FDA advisory panel had recommended against sending Santa Barbara, California-based Inamed the approvable letter in a five-to-four vote. Among the reasons given for the rejection were Inamed’s need for more patient follow-up data and quality concerns over one of its implant models.

The company has since provided additional information to address safety concerns. Inamed also pulled the implant model that had raised a red flag for the panel.

Although the FDA won’t comment on the letter’s content, Inamed CEO Nick Teti said the conditions stating what the firm must do in order to bring its product to market are in line with what the company was expecting.

Silicone gel implants were banned in the United States 13 years ago amid growing fear they could result in serious health problems for women, such as cancer. Since then, some studies have shown that side effects are mostly limited to breakage, infection, and scar tissue.

Proponents have been pushing for the return of these implants, saying they look and feel more natural than the saline-filled ones currently on the market.