Allergan Squashes Botox Rival, for a While

SANTA ANA, Calif. (CN) - Finding that a German company stole trade secrets, a federal judge blocked Merz Pharmaceuticals for 10 months from selling a botulinum-based product that competes with Allergan's Botox.

Merz aka Merz Aesthetics fka BioForm Medical makes Xeomin, "a botulinum toxin posted to compete with Botox," and announced in July 2011 that it had received FDA approval for it, U.S. District Judge Andrew Guilford wrote in a 27-page Findings of Fact and Conclusions of Law. He followed it up with a 3-page Order and Injunction.

Merz and its predecessor also make Radiesse, a dermal filler that competes with Allergan's Juvederm.

Guildford ruled after a bench trial.

The injunction stops Merz from selling Xeomin in the facial cosmetics market for 10 months. Merz also must remove Allergan's trade secrets from its computers and files, and implement a corporate compliance program.

Allergan claimed that Merz hired seven former Allergan sales representatives, who disclosed the Irvine,-based company's confidential information, including customer lists and other materials.

Merz employed the defendants in 2010, the same year the FDA approved Xeomin.

In his findings and conclusions, Judge Guilford wrote that "there is overwhelming circumstantial and direct evidence" that Merz stole the trade secrets and that "Allergan faces a substantial threat of impending injury as a result of this misappropriation."

Guilford found that monetary damages would be "insufficient" to remedy the harm to Allergan, and that an injunction was in the public interest.

"Defendants did not meet their burden of demonstrating that Allergan's request for injunctive relief is moot as a result of defendants' claim that they have returned, and no longer possess, any of Allergan's trade secrets," Guilford added in the 27-page order.

Allergan was represented by Dan Petrocelli with O'Melveny & Myers.

Petrocelli, Allergan and Merz did not immediately respond to requests for comment.

Botox has medical uses other than its famous wrinkle-paralysis. It is used to treat dystonia (sometimes painful muscle contractions) and blepharospasm (uncontrollable eyelid contractions), and has other uses.

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