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EXHIBIT 99.1
INAMED CONTACTS:
Ilan Reich, President & Co-CEO
Michael Doty, CFO
(212)273-3430
INAMED CORP. COMMENTS ON EARNINGS EXPECTATIONS, RECENT TRILUCENT EVENT AND SHELF
REGISTRATION FILING; ALSO UPDATES STATUS OF LAP-BAND(R) SYSTEM PMA FILING
SANTA BARBARA, CALIFORNIA - JUNE 6, 2000 -- Inamed Corporation (Nasdaq NM: IMDC)
commented today on a variety of matters, including earnings expectations for the
second quarter, a recent Trilucent event, and a new shelf registration filing.
The Company also announced that the FDA has granted expedited review to the
LAP-BAND(R) System PMA filing.
First, the Company noted that, due to favorable sales and margin trends, diluted
earnings per share for the second quarter of 2000 will likely be 15% higher than
the $0.49 consensus of current estimates by Wall Street research analysts. By
comparison, the Company reported proforma diluted EPS of $0.37 for the second
quarter of 1999. Owing to the July 4 holiday weekend, the Company will report
its second quarter financial results on Tuesday, July 25, 2000.
Second, the Company announced that it has undertaken a comprehensive program of
support and assistance for women who have received Trilucent breast implants,
under which it will cover medical expenses associated with the removal and
replacement of those implants for women in the European Community, the United
States and other countries.
The Company noted that no adverse operational or EPS impact will arise, due to
the fact that the Company already has in excess of $100 million of reserves and
insurance which are available for Trilucent-related issues. This product was
introduced in 1995, and discontinued in 1998, by a predecessor company before
Inamed acquired Collagen Aesthetics last year.
Inamed (through its subsidiary, AEI Inc.) has been cooperating fully with the
U.K. Medical Devices Agency (MDA), which today recommended as a precautionary
measure that Trilucent implants should be removed from all patients. The MDA's
announcement states: "Although there have been reports of breast swelling and
discomfort in some women with these implants, there has been no clinical
evidence of any more serious health problems, so far."
A Company spokesperson said: "We deeply regret any distress suffered by patients
and their families. As a responsible company, we have set up a program which is
designed to provide them with support and assistance." Additional information is
presented in the next section of this press release.
Third, the Company announced that it is filing today a shelf registration
statement covering approximately 5.5 million shares of common stock, of which
approximately 4.4
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million shares are held by Appaloosa Management L.P. and its affiliates, while
the balance are held by a court-appointed receiver on behalf of Medical Device
Alliance, Inc.
This filing completes the Company's previously-announced obligation to provide
registration statements to various stockholders. The Company believes that none
of its stockholders with registration rights intend to sell their shares in a
manner which could impair the value of their remaining ownership interest in
Inamed.
Appaloosa has not sold any of its shares pursuant to the previous registration
statement filed on the firm's behalf in February 2000, nor has it sold any of
its shares which are eligible for sale under Rule 144. Consistent with the
reporting requirements of the federal securities laws, Inamed believes that if
Appaloosa does choose to sell any shares, it would file an amendment to its
Schedule 13D on the next business day in the event an aggregate of approximately
205,000 shares (1% of Inamed's outstanding shares) are sold since its last
amendment.
Finally, the Company announced that the Food and Drug Administration (FDA) has
granted expedited review status for the Premarket Approval Application (PMA) for
the LAP-BAND(R) Adjustable Gastric Banding System. This product is designed for
the surgical treatment of obesity and is usually placed laparoscopically.
According to the FDA's notice letter, expedited review status was granted
because "the LAP-BAND(R) System appears to offer significant advantages . . .
[including:]
- Reduced operative morbidity/mortality [as compared to other types of
obesity surgery,]
- Post operative and patient specific adjustability without the need for
further surgery, [and]
- Reversability of the procedure."
As previously announced, an advisory panel will meet on June 19, 2000 to
consider the LAP-BAND(R) System PMA and advise the FDA staff of its views and
recommendations. Neither the granting of expedited review status nor an approval
recommendation by the advisory panel ensures ultimate approval of the PMA. As is
the case with all PMAs, the FDA has sole and final authority to approve or
disapprove.
Information on Trilucent Breast Implants
History
The Trilucent breast implant is unique because it contains a soybean oil filler
material. It was introduced by LipoMatrix Inc. for commercial sale in the
European Community in 1995. At the time LipoMatrix thought that this material
would be superior to traditional silicone or saline filler materials because it
is translucent in a mammogram and would naturally degrade in the body in the
event of a rupture. Approximately 10,500 women
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chose to receive the Trilucent implant during the time it was on the market, of
which roughly one-half reside in the United Kingdom. In the United States this
product was not sold commercially, and was restricted to use in clinical trials
which enrolled 165 women.
LipoMatrix stopped manufacturing Trilucent breast implants in 1997. It ceased
all sales in March 1999 in response to concern by the U.K. Medical Devices
Agency (MDA) about reports of local inflammation or swelling following rupture.
These localized complications resolve following explant without any adverse
clinical consequences.
Following the publicity arising from the withdrawal of Trilucent breast implants
from the market in March 1999, approximately 200 explant and replacement
procedures were conducted -- primarily for women with symptoms of swelling or
rupture. In recent months the number of complaints has fallen significantly.
There is only one Trilucent court proceeding currently pending anywhere in the
world.
Scientific Program and MDA Actions Following Trilucent Withdrawal
At the time of the product's withdrawal in March 1999 the MDA expressed its view
that there was insufficient scientific data to ascertain the long-term safety of
the product. Accordingly, an extensive program of chemical analysis and
epidemiology studies was designed.
Recently, as part of that program, testing was conducted in order to determine
whether an analysis technique using nuclear magnetic resonance could be used to
detect the breakdown products which might arise as soybean oil ages and
oxidizes. This preliminary testing revealed that one group of breakdown products
(which can sometimes include a chemical that may be genotoxic) may be present in
some (but not all) samples of aged, unused implants. Although further studies
are ongoing, Inamed promptly brought these preliminary results to the MDA's
attention.
In the opinion of various experts consulted by Inamed, further testing is
necessary before any scientifically reliable conclusions can be drawn. Although
Inamed has concluded that soybean oil is not an optimal filler material for
implants, it must be emphasized that there is no evidence of Trilucent implants
being injurious to human health or reproduction, even in the case of maximum
assumed exposure (such as a rupture).
After receiving the preliminary test results, the MDA convened its own panel of
experts. That panel recommended for purely precautionary reasons that all women
with Trilucent implants be publicly advised to consider explant.
Today's announcement by the MDA reflects that recommendation, and provides
physicians and their patients with information about the current scientific
data, and the explant and replacement program which Inamed has voluntarily
undertaken in cooperation with the MDA (through its subsidiary, AEI Inc.).
More detailed information about the scientific research on Trilucent, the MDA's
explantation recommendation, and Inamed's explant and replacement program can be
found at www.trilucentinfo.com. Inamed intends to offer this support program to
all
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women with Trilucent implants, both in the European Community, the United States
and elsewhere, and appropriate arrangements are now being undertaken with public
health authorities throughout the world.
Financial Information
LipoMatrix was owned by Collagen Aesthetics from 1996 to November 1998. When
Collagen sold LipoMatrix it effectively retained certain liabilities associated
with Trilucent. At the time Inamed acquired Collagen in September 1999 there was
approximately $13 million of reserves on Collagen's balance sheet to cover that
potential Trilucent exposure.
Since then Inamed has increased its financial protection against potential
Trilucent liabilities to more than $100 million, consisting of $35 million of
reserves on its balance sheet and in excess of $65 million of insurance.
Inamed's balance sheet as of March 31, 2000 includes $35 million of reserves to
cover all of the premiums, co-payment obligations and deductibles potentially
payable under its various insurance policies, as well as certain administrative
expenses which may not be covered by insurance. That reserve also includes a
provision for a program of continued scientific testing and surveillance of
women with Trilucent breast implants.
Based on those reserves and insurance, in its most recent Form 10-Q (for the
quarter ended March 31, 2000) Inamed updated management's belief that Trilucent
does not pose a materially adverse risk to Inamed's business, results of
operation, financial position or future prospects. Inamed reiterates that view
today in light of the MDA's explant recommendation.
As disclosed in the most recent Form 10-Q, the Trilucent liability reserves were
increased by approximately $25 million, as was the goodwill asset arising from
the Collagen acquisition. These changes in estimates do not impact Inamed's
income statement or its previously-reported earnings, based on the generally
accepted accounting principles which apply to acquisitions accounted for under
the purchase method. In future periods, however, there will be an additional two
cents per share of annual goodwill amortization.
Arthur Andersen LLP, which is Inamed's certified public accountants, reviewed
the recent Form 10-Q prior to filing in accordance with the new SEC standards
for auditors' review of unaudited quarterly statements. Arthur Andersen LLP were
satisfied with the accounting and disclosures contained in that Form 10-Q.
Liability Coverage
Inamed's insurance coverage consists of two types of policies which were
underwritten by U.S. based carriers with the highest category of ratings issued
by A.M. Best and other rating agencies. The first policy is a $50 million
non-cancelable, multi-year, worldwide medical expense reimbursement policy owned
by Inamed. A $5 million premium was paid at the time the policy was written.
This policy was specifically negotiated and designed to cover the reasonable
medical costs associated with explanting and replacing all Trilucent breast
implants. Secondly, Inamed is a named insured under more than $50
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million of traditional claims-made product liability insurance coverage obtained
by Inamed, Collagen and the current owner of LipoMatrix. Of that insurance
coverage, $35 million is for the current policy year.
These policies have basic and extended discovery periods ranging from five to
ten years during which liability claims can be asserted and applied against the
applicable policy year.
Investors should realize that the legal systems vary between the United States
and other countries where most Trilucent implants were sold. These differences
include the absence of class actions and attorney retainers with conditional
(contingency) fees; furthermore, the loser generally pays the prevailing party's
legal fees.
Accordingly, the legal systems outside the United States generally favor
negotiated settlements which, in the Trilucent context, would provide for some
compensation, expenses and lost wages, but would not involve the kind of
settlements or awards which can sometimes arise in the class action context
under the U.S. tort system. Moreover, in the past U.S. courts have not favored
allowing foreign claimants to bring breast implant claims in this country.
Inamed is a global surgical and medical device company engaged in the
development, manufacturing and marketing of products for the plastic and
reconstructive surgery, aesthetic medicine and obesity markets.
Inamed sells a variety of lifestyle products used to make people look younger
and more attractive, including breast implants for cosmetic augmentation and
collagen-based facial implants to correct facial wrinkles and to improve lip
definition.
Inamed also sells products that address women's health issues, including breast
implants for reconstructive surgery following a mastectomy, and devices that
treat severe obesity and urinary incontinence.
This release contains, in addition to historical information, forward-looking
statements. Such statements are based on management's current expectations and
are subject to a number of uncertainties and risks that could cause actual
results to differ materially from those described in the forward-looking
statements. Factors that may cause such a difference include, but are not
limited to, those described in the Company's annual report on Form 10-K for the
year ended December 31, 1999.
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