There has been a quiet hare-and-tortoise race under way for first rights to the silicone breast implant market. Inamed (NASDAQ:IMDC) was the early favorite and in the lead, with Mentor (NYSE:MNT) lagging behind.

All that changed on Jan. 7, 2004, when the FDA denied Inamed pre-market approval for its silicone implants. Inamed shares dropped almost 12% that day. The not-approvable letter sends Inamed back to the starting line. Unfortunately, there is no clear idea of just where the starting line is now.

Inamed's director of regulatory affairs, Joann Kuhne, said, "To be honest, I'm not sure the FDA knows exactly what they want. They just feel like the information that was presented wasn't enough for them, so they're looking for a more thorough analysis of ruptures and what the... causes of the ruptures are."

Meanwhile, Mentor continues to gather data and submitted its own application for pre-market approval in December. There has been no ruling yet, but Mentor knows additional information will need to be submitted and is getting ready to provide it.

Silicone implants have been around since the 1960s, with Dow Corning, now Corning (NYSE:GLW), as the major player in the field. Ruptured implants were blamed for a spectrum of diseases, including lupus, and lawsuits mushroomed from 137 to tens of thousands of cases involving $3.2 billion in the 1990s. Dow Corning filed for bankruptcy in 1998 and bowed out of the silicone implant market.

Now, Inamed and Mentor have the entire potential silicone implant market to themselves -- and it is a large, profitable arena. There were 249,641 breast augmentations done in 2002. It is estimated that silicone implants would deliver $100 million in additional revenue. Whichever company wins first approval will step into some handsome profits.

Neither Mentor nor Inamed gives any indication of just how much new data must be analyzed or how long it will take. The race gets set back to start and Mentor and Inamed are off again. Inamed was the clear winner in 2003, climbing to a 52-week high (split-adjusted) of $58.90 from $18.53. Meanwhile, Mentor plodded along, going from $14.50 to a 52-week high of $25.50. Mentor currently trades around $25 and Inamed is at $49.35, considerably off its 52-week high. The next leg of the race should provide some thrills for both investors and spectators.

And by the way, in the fable, the tortoise wins.

Jean Graham does not own shares in any of the companies mentioned.