With Medicis Pharmaceutical's (NYSE:MRX) shares falling, and its rivals expanding, investors are increasingly exhibiting the same facial wrinkles the company's products seek to alleviate.

The recession has been tough for aesthetic-medicine companies, and Medicis is no exception. The company specializes in prescription wrinkle-removal drugs, as well as acne treatments. Over the last year, the stock fell 48%, compared to a 40% drop in the S&P 500-stock index.

Competitors have been hit hard, too. Allergan (NYSE:AGN) and Mentor (NYSE:MNT), which inject breast implants and other devices into their product mixes, have also fallen significantly.

Mentor's stock was beaten down so much that Johnson & Johnson (NYSE:JNJ) was able to offer $31 a share on Dec. 1, a 92% premium over the previous trading day. That offer, however, was still well below the $40 to $50 range where Mentor's stock spent most of 2006 and 2007.

So far, Medicis sounds firm about its desire for independence, although given the J&J-Mentor deal and Monday's surprise acquisition of Advanced Medical Optics (NYSE:EYE) by Abbott (NYSE:ABT), it's always possible that some large pharma company could move on Medicis as an economic-rebound bet.

Boom times ahead?
As Chairman and CEO Jonah Shacknai told a JPMorgan medical investing conference on Jan. 12, Medicis believes an economic recovery will lead to a revival -- and even an expansion -- in the business. One source of growth will be baby boomers, who find they must work more years to repair financial foundations that have been eroded by the recession. Assuming employers want an energetic workforce, the baby boomers "will want to look and feel the part," Shacknai said.

Medicis has always acted like an acquirer rather than an acquiree. In 2005, it bid for Inamed, then an independent public company. Allergan made a higher, and eventually successful, offer. In the middle of the Inamed battle, Mentor made a run at Medicis, which rejected the offer.

Medicis continues to preach strategic acquisitions, such as its July 2008 purchase of LipoSonix, a new move into medical devices by the company. LipoSonix is working on ultrasound technology for "body contouring" -- a non-invasive alternative to liposuction for body fat removal. Body aesthetics, Shacknai said, is an "under-served" market. Medicis expects FDA approval in 2011.

Dermatology deadline
However, the inflection point for Medicis isn't the next few years; it's the next few months. Medicis is waiting for an FDA verdict on Reloxin, a wrinkle-removing drug that acts like Allergan's Botox. Medicis licenses Reloxin from France's Ipsen to market the drug for aesthetic medicine uses in Japan, Canada, and the United States.

Reloxin's regulatory path hasn't been wrinkle-free. Twelve months ago, the FDA rejected one filing, and the companies ended up resubmitting their application last March.

The FDA told Ipsen on Jan. 7 that the agency would take another three months to review the drug. The longer the delay, the more time Allergan builds its Botox advantage. Like Botox, Reloxin is aimed at wrinkles on the forehead and around the eyes.

The Reloxin delay also puts more of a burden on Restylane, a dermal filler, which faces increasing competition from rivals like Allergan's Juvederm. Dermal fillers treat wrinkles around the mouth and nose, and Restylane accounts for a significant portion of Medicis' revenue.

In December, Medicis also was able to clear up a nagging problem; it signed a deal with Impax Laboratories to avert a generic challenge to the acne drug Solodyn, which also accounts for a significant portion of Medicis' revenue.

That's one case, at least, in which Medicis investors didn't need aesthetic medicine to remove their serious frown lines.

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Fool contributor Robert Steyer doesn't own shares of any companies cited in this story. Johnson & Johnson and JPMorgan are Motley Fool Income Investor recommendations. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy hasn't aged a day.