Allergan to acquire MAP Pharmaceuticals for $958 million

Transaction gains the company an inhaled migraine treatment and compounds for Parkinson’s, epilepsy

Kelsey Kaustinen
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IRVINE, Calif.—Allergan, Inc. and MAP Pharmaceuticals, Inc.have signed a definitive merger agreement, under which Allergan will acquire100 percent of MAP Pharmaceutical's shares at $25 per share, for an approximatetotal of $958 million. The offer price represents a 60-percent premium over MAPPharmaceuticals' closing price on Jan. 22, and the transaction, which will beaccomplished in accordance with a cash tender offer and then a second stepmerger, is expected to close in the first or second quarter of this year.
The boards of directors of both Allergan and MAPPharmaceuticals have unanimously approved the transaction. MAP Pharmaceuticals'board of directors has unanimously agreed to recommend that shareholders tendertheir shares to the offer, and the company's directors, executive officers anda major stockholder, who together own approximately 9 percent of theoutstanding stock, have entered into a tender and support agreement thatcommits them to tendering all of their shares in the offer.
"Through our dedicated employees at MAP Pharmaceuticals, wehave made tremendous progress to date with our lead product candidate, LEVADEX,enabling us to realize substantial value for our stockholders through thistransaction," Timothy S. Nelson, president and CEO of MAP Pharmaceuticals, saidin a press release. "We are pleased that we and Allergan share similar valuesand a common vision in neuroscience that make for a strong cultural andscientific fit between our companies. We believe this acquisition by ourpartner Allergan will increase the potential for our product candidates to makea meaningful difference for patients we have worked so hard to serve."
The companies already have a history together, havingestablished a collaboration agreement in January of 2011. The two collaboratedto co-promote LEVADEX, MAP Pharmaceuticals' orally inhaled drug for thepotential acute treatment of adult migraines, which is undergoing review by theU.S. Food and Drug Administration (FDA). MAP Pharmaceutical submitted an NDAfor the compound in May 2011, then resubmitted it in October 2012 withadditional data. The FDA accepted the NDA in November.
MAP Pharmaceuticals specializes in developing andcommercializing therapies for neurological diseases. In addition toLEVADEX—which is being developed to treat pediatric migraine and clusterheadache as well—the company also has a compound in its pipeline forParkinson's disease and a GABA agonist for epilepsy seizure intervention, bothof which are in the research stage.
Allergan expects the transaction to be dilutive to 2013earnings per share by roughly 7 cents, assuming it closes by the goal date ofApril 15, and accretive to earnings per share by the second half of next year.The offer is subject to customary closing conditions, including the tender of amajority of MAP Pharmaceuticals' outstanding shares and the expiration ortermination of the waiting period under the Hart-Scott-Rodino AntitrustImprovements Act.
"One of the key drivers of Allergan's continued success isour focus on medical specialties where we have extensive knowledge of physicianand patient needs, and can provide a broad portfolio of products," David E.I.Pyott, chairman, president and CEO of Allergan, said in a statement. "Allerganhas a record of leadership in the neurosciences field and, according to arecent physician survey, is now perceived as the #1 company in prophylacticmigraine management by physicians. During the past few years, Allergan hasreceived regulatory approvals in 56 countries for BOTOX for use in thetreatment of chronic migraine. As a result, thousands of patients who suffer fromchronic migraine have benefited from this important treatment option. We planto capitalize on this depth of expertise in neurology as we continue the globaldevelopment of LEVADEX as a potential acute treatment for migraine that iscomplementary to BOTOX and use MAP's proprietary drug particle and inhalationtechnologies to generate new pipeline opportunities."
Goldman, Sachs & Co. was brought on as Allergan'sfinancial advisor for the transaction, with Gibson, Dunn & Crutcher LLPproviding legal counsel. MAP Pharmaceuticals brought on Centerview Partners LLCas its exclusive financial advisor, with Latham & Watkins serving as its legaladvisor.

Kelsey Kaustinen

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