MAP Pharmaceuticals Inc. priced an underwritten public offering of 3.9 million shares of its common stock at $13.40 apiece, seeking to raise $52 million as the biotech prepares to resubmit the new drug application (NDA) for Levadex, its inhalation aerosol for the acute treatment of migraine.
The offering price represented a discount of 5 percent to the closing price of $14.11 for the company's shares (NASDAQ:MAPP) on Tuesday, the last trading day before the offer priced.
The Mountain View, Calif.-based company granted underwriters a 30-day option to purchase an additional 582,088 shares, potentially raising another $7.8 million. The offering is expected to close on or about Aug. 6. BofA Merrill Lynch is acting as sole book-running manager.
In March, MAP received a complete response letter from the FDA for the orally inhaled formulation of the intravenous migraine drug dihydroergotamine (DHE). 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, as well as issues related to a facility inspection at a third-party manufacturer. (See BioWorld Today, March 28, 2012.)
The company completed an end-of-review meeting with the FDA in June to seek clarity from the agency in developing its response.
"We believe we understand what [the FDA] is looking for, and we're driving like crazy to put that information together," Tim Nelson, MAP's president and CEO, told BioWorld Today.
MAP is on track to resubmit the Levadex NDA in the late third quarter or early fourth quarter, he said.
Acute migraine treatments are dominated by triptans, which include more than a half-dozen branded products in the U.S., led by GlaxoSmithKline plc's Imitrex (sumatriptan).
The migraine drug DHE also has a long history of use but has been limited to intravenous, oral, intramuscular and subcutaneous delivery systems that are invasive or inconvenient, Nelson said. MAP's formulation uses a simple inhaler, not unlike an asthma inhaler, to improve the speed and predictability of drug delivery.
"When you have a migraine attack, you have headache, sensitivity to light, sensitivity to sound and nausea," he explained. Consequently, patients develop gastric statis, temporarily shutting down the digestive system and severely limiting the absorption of oral medications.
With Levadex, MAP can deliver the reformulated DHE quickly, consistently and at the proper dosage.
Approval of Levadex hinges largely on a single Phase III trial, dubbed FREEDOM-301, which hit all four co-primary endpoints, reducing pain, phonophobia, photophobia and nausea. FREEDOM-301 demonstrated a statistically significant clinical benefit in as little as 30 minutes. (See BioWorld Today, May 27, 2009.)
MAP also conducted a follow-on safety study and smaller studies evaluating pharmacokinetics, pharmacodynamics, cardiovascular safety and other measures. Because DHE has a long history of use, MAP was able to file for FDA approval through the 505(b)(2) pathway after conducting a single pivotal trial.
With the robust efficacy findings, analysts generally had expected approval of Levadex last year. Despite the delay, a sense of optimism remains. In a research note last month following the release of MAP's second-quarter 2012 results, Leerink Swann LLC analyst Michael Schmidt predicted a "95 percent probability of approval" for the resubmitted NDA and a PDUFA date of six months, predicated on the FDA's classification of Levadex as a Class II drug.
The compound could generate peak revenues of $600 million annually for MAP, Schmidt added.
Levadex is partnered with Allergan Inc., which paid $60 million up front and as much as $97 million in milestones for rights to co-promote the drug to neurologists and pain specialists in the U.S. MAP will hire its own sales force of 50 reps, Nelson said, but the co-promotion agreement allows the company to tap into Allergan's neurology expertise – gained from marketing Botox (onabotulinumtoxinA) for chronic migraine – while retaining ex-U.S. rights to Levadex as well as rights to promote to U.S.-based primary care physicians. (See BioWorld Today, Feb. 1, 2011.)
MAP plans to bring in other partners to exploit those additional segments inside and outside the U.S., according to Nelson.
MAP earned a $20 million milestone payment from Allergan when the initial NDA filing was accepted for review. Another $25 million is tied to approval of Levadex, with certain undisclosed language in the product label, and $50 million is tied to the first commercial sale.
Once Levadex is approved, MAP plans to push forward with a supplemental NDA of the drug in pediatric migraines and a third indication in cluster headaches in adults, Nelson said.
In its SEC filing, MAP reported 30.7 million shares of common stock outstanding and 34 shareholders of record as of July 30. In its second-quarter results, the company reported cash and equivalents of $68.4 million on June 30, compared to $79.0 million on March 31.
On Wednesday, shares of MAP fell 81 cents, closing at $13.30.
In other financings news:
• Horizon Pharma Inc., of Deerfield, Ill., filed an S3 shelf registration with the SEC for a public offering not to exceed $175 million. Last week, the FDA approved Rayos (known as Lodotra in Europe), a delayed-release form of low-dose prednisone, for rheumatoid arthritis (RA), polymyalgia rheumatica, psoriatic arthritis, ankylosing spondylitis, asthma and chronic obstructive pulmonary disease. Horizon's CAPRA-2 trial showed that RA patients who received Rayos had a statistically significant improvement in ACR20 compared to placebo. The specialty pharma raised $49.5 million a year ago in its initial public offering. On Wednesday, shares of Horizon (NASDAQ:HZNP) fell 58 cents, or 10.2 percent, to close at $5.13. (See BioWorld Today, July 29, 2011.)
• Hyperion Therapeutics Inc., of South San Francisco, completed its initial public offering of 5 million shares of common stock at $10 each for proceeds of $50 million. Underwriters exercised their overallotment option in full, purchasing an additional 750,000 shares to raise another $7.5 million. Leerink Swann LLC and Cowen and Co. LLC acted as joint book-running managers, with Needham & Company LLC acting as co-manager. (See BioWorld Today, July 27, 2012.)