Silicone Goes Subtle

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http://www.businessweek.com/magazine/content/06_52/b4015155.htm?chan=tc & campaign_id=rss_tech DECEMBER 25, 2006 NEWS & INSIGHTS Silicone Goes Subtle Allergan's campaign relies on friendly persuasion Now that the FDA has lifted a 14-year moratorium on silicone breast implants, Allergan Inc., which along with rival Mentor Corp. owns the lion's share of the global business, faces what seems like a monumental marketing challenge. It must find a way to persuade women to pay $5,000 for a surgery that only a few years ago many claimed was making them desperately ill. Allergan CEO E.I. Pyott professes himself unfazed by the job at hand. "I don't really see it as a challenge," says the irrepressible Englishman. "I see it as an opportunity." Allergan has lost no time revving up its marketing machine. Practically the moment the Food & Drug Administration gave the green light on Nov. 17, the Irvine (Calif.) company went live with an informational Web site for consumers. It features the oh-so-searchable address breastimplantstoday.com. Meanwhile, Pyott has been laying the groundwork for a public-relations blitz, flying to New York, for example, to powwow with women's magazine editors. He has been poaching marketers from companies with long experience selling to women, including Nestlé (NSRGY ) and Procter & Gamble (PG ) Co. Next year, Allergan will launch a print advertising campaign.Initially, says Pyott, "our objective is to

destigmatize this product." He's the man to do it. Pyott helped turn Botox into a cultural phenomenon—by cozying up to doctors, advertising 24/7, and fighting liability claims in court. Wrinkle-erasing Botox treatments will generate $1 billion in revenues for Allergan this year.Silicone implants represent another magnitude of controversy. By the early 1990s they had a dominant share of the market, but sales collapsed when the FDA responded to claims that the implants caused such autoimmune diseases as lupus and imposed a ban on using them for augmentation (reconstruction was still allowed). Thousands of product-liability lawsuits filed against silicone implant makers forced Dow Corning Corp. into bankruptcy and prompted big players such as 3M, (MMM ) Bristol-Myers Squibb (BMY ), and Baxter International (BAX ) to exit

the business.New studies have quieted many critics, but regulators are forcing Allergan to warn women of the potential risks. The company's own studies found that about 13% of women suffer a painful hardening of breast tissue and that the implants rupture in fewer than 3% of subjects. Women who opt for silicone are required to read and sign a 30-page consent form.How do you get around such concerns? Since consumer focus groups suggested that women do a lot of research into the surgery before committing, Allergan has posted links to positive studies from such institutions as the Mayo Clinic and the National Cancer Institute. Allergan also hired Joanne Gladfelter, a nurse, to answer questions from consumers on the site under a feature it calls Ask Nurse Joanne. "They do a good job of providing information in a low-key way," says Deborah MacInnis, a professor of marketing at the University of Southern California's Marshall School of Business. "They're not

saying: Oh, God, you're going to look so sexy and beautiful.NATURAL LOOK Playing to the informed consumer is Allergan's game plan. Hence the tagline "You've never looked smarter" on its Web site. While some might find that borderline-tacky, Pyott points out that most women who opt to have breast-augmentation surgery, a far more common procedure than reconstruction, tend to be well-educated. Besides, he argues, "in people's minds, the way you look and feel cannot only be visual. It can be cerebral as well.That may be a stretch. But the company is betting that vanity will trump fear. Since the halt on silicone implants, augmentations—mostly saline implants—are up to 10 times the previous level, to about 300,000 operations a year, says the American Society of Plastic Surgeons. Analysts are expecting Allergan's implant business to increase 20%, to $300 million, next year (largely because silicone, which looks and feels much

more natural, costs twice as much as saline). Allergan's stock has climbed 33% since May, when approval began to seem likely, to $120. Many women remain squeamish, but Wall Street is cheering.