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Jan 23, 2013

Allergan Grows Migraine Portfolio with $958M MAP Purchase

  • Allergan will acquire MAP Pharmaceuticals for $958 million, in a deal that broadens the multi-specialty healthcare company’s drug portfolio with the promising inhalable drug candidate Levadex®, for acute migraine headaches in adults, and other neurology drug candidates, the companies said today.

    The acquisition blossomed from a partnership between the companies that began in January 2011, when Allergan agreed to join MAP in co-promoting Levadex to neurologists and pain specialists in the U.S. and Canada, contingent upon regulatory approvals. In return, Allergen agreed to pay MAP $60 million up-front and up to $97 million tied to regulatory milestones.

    FDA is reviewing MAP’s new drug application (NDA) to market Levadex, with a decision expected around April 15 under the Prescription Drug User Fee Act. MAP originally submitted its NDA in 2011, but agreed to re-submit it in order to include additional data and responses to FDA concerns about chemistry, manufacturing and controls (CMC), and manufacturing deficiencies at a third-party manufacturer, as well as the agency’s need for more time to complete its review of inhaler usability information.

    The companies envision marketing Levadex—a reformulated version of the intravenous drug dihydroergotamine that treats migraines after occurrence—as a complement to Allergan’s Botox® for chronic migraine, approved in 56 countries.

    “We plan to capitalize on this depth of expertise in neurology as we continue the global development of Levadex® as a potential acute treatment for migraine that is complementary to Botox® and use MAP’s proprietary drug particle and inhalation technologies to generate new pipeline opportunities,” David E.I. Pyott, Allergan’s chairman of the board, president, and CEO, said in a statement.

    The deal is expected to close late in the first quarter or in the second quarter of 2013, after having won unanimous approval by the boards of both companies. Allergan will acquire 100% of MAP’s shares for $25 per share—a 60% premium over MAP’s closing stock price on Nasdaq of $15.58 on Jan. 22.

    Allergan said the deal would dilute its 2013 earnings per share by about 7 cents, but add to its earnings per share by the second half of 2014. Allergan will provide more specific guidance to investors on its planned February 5 conference call with analysts to discuss Q4 and full-year 2012 earnings.

    During the third quarter of 2012, MAP finished with a $12.6 million net loss compared with the net income of $8.2 million in Q3 2011, when the company received a $20 million milestone payment from Allergan for Levadex. Allergan racked up $250.6 million in net income, barely below $251 million in the year-ago quarter, though net sales rose to about $1.4 billion, up 9.4% at constant exchange rates (CER), buoyed by an 11.4% CER jump in sales of specialty pharma products like Botox.

    “Allergan currently anticipates that, excluding this transaction, 2013 earnings per share growth expectations will fall within our mid-teens growth aspiration,” the companies said in the statement.


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