Allergan Will Buy Map Pharmaceuticals for $958 Million

Allergan Inc., the maker of the wrinkle filler Botox, agreed to buy Map Pharmaceuticals Inc. in a deal valued at $958 million to gain an experimental inhalable migraine treatment.

Allergan will pay Map investors $25 a share, a 60 percent premium over yesterday’s closing price in New York, the companies said in a statement. The boards of both companies unanimously approved the deal, which is expected to close late in the first quarter or in the second quarter.

Allergan has targeted sales growth in specialty pharmaceuticals and skin care as it considers divesting its weight-loss unit, including the Lap-Band device, Chief Executive Officer David Pyott has said. The Irvine, California-based company has announced five acquisitions in the past two years, including a $350 million deal in November for a unit of SkinMedica Inc.

Map, based in Mountain View, California, is seeking U.S. regulatory approval of Levadex, an inhaled form of a 60-year-old migraine drug, for patients who have acute attacks, defined as fewer than 15 a month. Allergan’s Botox is approved as a treatment for chronic migraine patients, those who suffer attacks more than 15 days a month. The companies agreed in January 2011 to co-promote Levadex should it gain approval.

“Levadex is about as perfect as one can imagine for a complementary product,” Pyott said today on a conference call. “We’re really excited by the Levadex opportunity, and forecast that peak sales will be approximately $500 million.”

Regulatory Schedule

“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,” said Shibani Malhotra, an analyst with RBC Capital Markets, in a note to clients.

Map’s drug was rejected last March by the Food and Drug Administration because of manufacturing issues, Chief Executive Officer Tim Nelson said then. The company has resubmitted its application for approval and the FDA has scheduled a decision by April 15, the companies said in the statement.

Allergan said it expects the deal will reduce 2013 earnings by 7 cents a share and, should the migraine drug gain marketing approval, add to earnings by the second half of 2014.

Allergan fell 1 percent to $104.65 at the close in New York. The shares have increased 17 percent in the past 12 months. Map rose 59 percent to $24.71.

Migraine Sufferers

More than 36 million Americans suffer from migraines, a neurological condition that triggers headaches, dizziness, nausea and sensitivity to sound and light. The global market for treatments should increase 38 percent to $4.4 billion from $3.2 billion in 2013, according to Burlington, Massachusetts-based Decision Resources. If approved, Levadex may be worth $1 billion a year by 2020, the firm said.

“We are pleased that we and Allergan share similar values and a common vision in neuroscience that make for a strong cultural and scientific fit between our companies,” Nelson said in the statement. “We believe this acquisition by our partner Allergan will increase the potential for our product candidates to make a meaningful difference for patients we have worked so hard to serve.”

Goldman Sachs Group Inc. acted as financial adviser to Allergan. Centerview Partners LLC was Map’s financial adviser.

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