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Allergan Snags MAP for $958M, Targets Migraine Franchise

By Marie Powers

Staff Writer

Allergan Inc. plans to purchase MAP Pharmaceuticals Inc. through an all-cash deal, acquiring 100 percent of the shares of MAP at $25 each. The acquisition was valued at approximately $958 million, with the per share cash offer price representing a 60 percent premium over MAP’s closing price of $15.58 on Jan. 22.

The transaction, which caught many investors and biotech analysts by surprise, is designed to strengthen Allergan’s grip on the migraine headache space. The company’s Botox (onabotulinumtoxinA) is one of two approved products in chronic migraine, together with Topamax (topiramate, Johnson & Johnson). MAP’s Levadex is currently under review by the FDA in acute migraine after MAP received a complete response letter (CRL) from the FDA for the drug, an orally inhaled formulation of the intravenous migraine drug dihydroergotamine (DHE). MAP originally submitted its new drug application (NDA) for Levadex in May 2011.

In the CRL, issued last March, the FDA did not cite clinical safety or efficacy issues and did not request additional pre-approval studies, but the agency did raise questions relating to chemistry, manufacturing and controls and to issues related to a facility inspection at a third-party manufacturer. (See BioWorld Today, March 28, 2012.)

MAP, of Mountain View, Calif., resubmitted the NDA in October 2012. The drug has a PDUFA date of April 15, 2013.

“With the PDUFA approaching, we believe Allergan management must be confident in the approvability of the product,” RBC Capital Markets LLC analyst Shibani Malhotra posted in a bulletin Tuesday evening after the acquisition was disclosed. “That said, we do believe that the acquisition fits well with Allergan’s neurology franchise as the company already has a sales force in place to support Botox’s neurologic indications.”

Allergan's U.S. sales force markets Botox for chronic migraine – 15 or more a month – to headache specialists. If approved, Levadex would be designed for acute migraine – two to eight headaches a month.

Allergan already had a $157 million collaboration agreement with MAP, inked in January 2011, to co-promote Levadex, contingent on regulatory approval in the U.S. and Canada, to neurologists and pain specialists. At the time, MAP CEO Timothy S. Nelson described the Allergan alliance as "very complementary," based on Allergan’s "well-established presence in the neurology space.” (See BioWorld Today, Feb. 1, 2011.)

The transaction, which was unanimously approved by the boards of directors of both companies, will be executed through a cash tender offer followed by a second step merger. The acquisition is expected to close by the second quarter.

Shares of MAP (NASDAQ:MAPP) zoomed to $24.76 at Thursday’s opening bell, a gain of 59 percent, while shares of Irvine, Calif.-based Allergan (NYSE:AGN) opened 23 cents lower and trended modestly lower throughout the morning.