Summary
The purchase of implant manufacturer, Mentor Corporation, by Johnson and Johnson will level the playing field as Mentor seeks to take market share from Allergan in both the breast implant business as well as facial fillers and competitors to Botox.
Analysis
The purchase of Mentor by Johnson and Johnson has been anticipated by plastic surgeons for a number of years and it gives significant advantages to both companies.
For Mentor, the purchase means that it has the capital to compete with Allergan - its rival in the breast implant market and the dominant company in facial fillers (Juvaderm) and Botox. Mentor has several new products including a HA filler and Botox-equivalent due out soon and it will need the assistance of a larger sales force and marketing budget to compete efficiently. It will also allow Mentor to bring brands such as NIA-24, its skin care line, either under the J&J umbrella (Neutrogena) or to benefit from J&J's skin care experience. Hopefully, it will also allow Mentor more focus and direction within the aesthetic arena. Widely diversified products - from liposuction garments to office management software to skin care - have in some ways been a distraction from the core business.
J&J gains a company in an area highlighted for growth within J&J. Development of a lap band equivalent, investigation into home hair reduction lasers, and development of high end cosmetic Neutrogena cosmetic lines have all indicated J&J's interest in the growing cosmetic surgery/aesthetics market. Already the leader in surgical suture and surgical mesh, J&J is not unfamiliar to plastic surgeons but their sales force has only recently tried to make inroads into doctors offices with their acquisition of tissue bank, MTF, and their offering of a human allograft to compete with Lifecell's Alloderm.
As with any acquisition, integration will be somewhat trying. As of now it appears that Mentor will operate with its current leadership under the Ethicon division of J&J. As opportunities to achieve synergies and innovation in the plastic surgery market come about hopefully, some of the walls within J&J will be removed to capitalize of J&J's diversity and expertise.
