MAP leads to pot of gold

Allergan subsidiary, MAP Pharmaceuticals merger could be worth nearly $1 billion

Jim Cirigliano
IRVINE, Calif.—Groundhog Acquisition Inc., a wholly ownedsubsidiary of Allergan Inc., has initiated a tender offer to purchase alloutstanding shares of MAP Pharmaceuticals Inc., pursuant to a merger agreementannounced in January. The tender offer is for $25 per share, net to the sellerin cash without interest and less applicable withholding taxes. This pricerepresents a substantial premium over MAP shares' closing price on Jan. 22—theday the tender offer was announced—which was $15.58 per share. The totalpurchase is valued at approximately $958 million.
 
 
Groundhog Acquisition will merge with and into MAP, with MAPcontinuing as the surviving company as a wholly owned subsidiary of Allergan.
 
 
The merger agreement and tender offer come as MAP'sprincipal product, Levadex, awaits approval from the U.S. Food and DrugAdministration (FDA). Levadex is a promising experimental treatment for use torelieve severe migraine headaches. Levadex is a novel form of the drugdihydroergotamine (DHE) that can be inhaled into the lungs and administered viaan inhaler, rather than be delivered by intravenous infusion in a hospitalsetting as it is today. The inhaler is similar to a common asthma inhaler andwould allow for DHE to be self-administered at home to treat migraines asneeded, at the time they occur.
 
 
The FDA earlier denied approval to Levadex in a decisionannounced in March 2012. MAP has since indicated, however, that the product wasrejected over concerns related to manufacturing and the use of the inhaler,rather than the safety or effectiveness of the drug. In October 2012, MAPresubmitted its application alongside additional data and answers to the FDA'squestions.  
 
 
FDA approval of Levadex is one of several conditions towhich the completion of the tender offer is subject. In addition, at least amajority of the outstanding shares of MAP's common stock must be tendered on afully diluted basis. Other customary conditions were set forth in the offer topurchase filed by Groundhog Acquisition and Allergan with the U.S. Securitiesand Exchange Commission on Jan. 31.
 
 
The merger has already cleared one major condition: theearly termination of the waiting period under the Hart-Scott-Rodino AntitrustImprovements Act of 1976. Allergan and MAP announced the Federal TradeCommission's decision to terminate the waiting period with respect to thistender offer on Feb. 7.
 
 
MAP's board of directors unanimously agreed to recommendthat their stockholders accept the tender offer and tender their shares. MAP'sdirectors and executives and a major stockholder—together representingownership of 9 percent of all the company's outstanding common stock—haveentered into a tender and support agreement with Allergan committing to tenderall of their MAP shares in the offer, and to vote in favor of the merger ifapplicable. The deal is expected to close in the second quarter.
 
 
Allergan is an Irvine, Calif.-based healthcare company bestknown for its popular product Botox, a form of the botulinum toxin that is usedfor cosmetic purposes as well as for the treatment of chronic migraines.
 
 
"Allergan is an established leader in neurosciences with aproven track record of scientific innovation, securing FDA approvals andcommercializing products to neurologists and pain specialists in the UnitedStates," Timothy S. Nelson, MAP Pharmaceuticals' president and CEO, said in astatement. "Their commitment to neurosciences and their understanding of theneeds of our target physicians for Levadex have been demonstrated through theongoing evolution of Botox, including its recent FDA approval for chronicmigraine patients. They are the ideal partner to help us best serve thisspecialty segment and to provide the resources needed to successfully launchand commercialize Levadex upon potential FDA approval."
 
MAP is based in Mountain View, Calif. The company'scurrent development programs in neurology include proprietary productcandidates that address large market opportunities, including migraines.Levadex is the company's most advanced product and would be its first to garnerFDA approval.
 
 

Jim Cirigliano

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