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Botox Tax

Botox has been lifting brows in Hollywood for quite some time, but lately it’s been raising quite a few eyebrows in DC, as well!

With lawmakers tightening their purse strings, word has surfaced that President Obama may consider taxing Botox treatments as a way to fund healthcare reform.

The move could bring in a pretty penny. According to the latest earnings from Botox maker Allergan, sales of the drug brought in $337 million in the last quarter.

And it’s not just Botox. All kinds of plastic surgery ranging from facelifts, to tummy tucks and even hair transplants would be subject to tax.

Now before you get your knickers in a knot, it's hardly a done deal. In fact, the speculation largely stems from a post on the Drudge report. “This initiative is already losing momentum," Allergan CEO David Pyott tells Fast Money. And according to Senator Max Baucus, it’s not under serious consideration.

What should be under serious consideration, however, is whether this stock belongs in your portfolio. The firm beat Street expectations when they reported earnings this week. And for the year, Allergan projected 2009 sales of $4.2 billion to $4.3 billion.

"We cannot remember a time when Allergan beat by this much, so we assume it was intended to send a strong message to the Street that it has plenty of flexibility in its discretionary spending," Natixis Bleichroeder analyst Corey Davis said in a research note.

Want to find our more about Allergan? Check out our interview with CEO David Pyott. Watch the video, now!


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Trader disclosure: On July 31st, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Terranova Owns (AMZN), (MSFT), (MCD); Terranova Is Short (TM)

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