Get ready for the battle of the injectable botulinum toxins.

The Food and Drug Administration has given a long-awaited and much-delayed approval for the anti-wrinkle drug Dysport, which will offer Medicis Pharmaceutical (NYSE:MRX) a bottom-line lift and give consumers a face-smoothing alternative to Allergan's (NYSE:AGN) Botox.

Medicis expects to launch Dysport in one to two months, starting the clock on a key strategic move for a company whose long-term stock performance has lagged that of its larger, more diversified competitor.

The FDA approval for Dysport, previously known as Reloxin, comes during a time of greater economic and competitive challenges for the company. It ended last year with fourth-quarter revenue up just over 1% and earnings per share, excluding one-time charges, dropping to $0.42 from $0.48. Medicis will release first-quarter results tomorrow.

The company likely has high hopes for Dysport as it seeks to shore up lagging sales of prescription products not covered by insurance, something the recession is playing havoc with. For instance, last year, revenue from its non-acne skin drugs, including the dermal filler Restylane, used for treating wrinkles around the nose and mouth, dropped to $148 million, down over 14%.

Unfortunately for Medicis and Dysport, Allergan has a long lead from offering Botox for treating frown lines between the eyebrows -- the same cosmetic use as Dysport.

Tough time for frown lines
But that doesn't mean all is smiles at Allergan, either. For the past two quarters, Botox sales fell 6% and 3% year over year. The economic environment has been so tough that Allergan didn't raise prices around the end of last year, as it often does. Instead, it offered rebates on Botox during February in an attempt to boost sales.

Medicis' Dysport will reach the market just in time to receive the black-box warning that the FDA is now requiring for all botulinum toxin products, including Botox, Dysport, and Myobloc from Solstice Neurosciences. The black-box warning wasn't initiated because of problems with cosmetic treatments; the FDA said these drugs had been prescribed for unapproved uses, and that some patients being treated for approved uses had experienced side effects requiring hospitalization. The FDA also told companies to make sure consumers know that different botulinum drugs aren't interchangeable.

Medicis licenses Dysport from France's Ipsen for cosmetic sales in the U.S., it but won't get all the sales. Instead, Ipsen will sell Dysport in the U.S. for treating cervical dystonia, an involuntary contraction of the neck muscles. For comparison, Botox, which is also approved for cervical dystonia (as is Myobloc), had 2008 sales split almost evenly between cosmetic and therapeutic uses.

Defense and offense
Dysport will hopefully give Medicis some offense while it tries to protect its flank as the dermal filler market becomes more competitive. It's also shored up another flank, its important acne drug Solodyn, by signing deals with Teva Pharmaceutical (NASDAQ:TEVA) and with Impax Laboratories (NASDAQ:IPXL). The deals protect Solodyn against generic attack in the U.S. until November 2011.

Among other advantages Dysport might provide the company, it could make Medicis a more attractive takeover target. After all, aesthetic medicine and dermatology companies have become quite popular recently:

  • Allergan bought Inamed in late 2005.
  • Johnson & Johnson (NYSE:JNJ) finished acquiring Mentor early this year.
  • Switzerland's Galderma bought Pennsylvania's CollaGenex last year.
  • GlaxoSmithKline (NYSE:GSK) is in the middle of buying private Stiefel Laboratories for $3.6 billion, after being a rumored suitor for Allergan.

Chin up, Medicis investors.

For related Foolishness:

Fool contributor Robert Steyer doesn't own shares of any companies cited in this article. Johnson & Johnson is an Income Investor pick while Glaxo is a former recommendation. The Motley Fool has a disclosure policy.