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Update on AGN's Acquisition of MAP

SNY LLY AGN

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Allergan, Inc. (AGN - Analyst Report) recently announced that it has commenced a cash tender offer to purchase all the shares of MAP Pharmaceuticals, Inc. for $25.00 per share.

Allergan had announced its intention to acquire MAP Pharma last month. The offer price represents a premium of 60% over MAP Pharmaceuticals’ closing price on Jan 22, 2012. The deal is expected to be worth approximately $958 million. The tender offer and withdrawal rights will expire at the end of Feb 28, 2013.

The acquisition will give Allergan the exclusive rights to migraine candidate, Levadex, in the US. Levadex is currently under regulatory review for the treatment of adults suffering from acute migraine. A response from the US Food and Drug Administration (FDA) should be out by Apr 15, 2013. Allergan and MAP Pharma had entered into a collaboration agreement to promote Levadex in Jan 2011.

The acquisition is expected to close in the second quarter. After the completion of the transaction, MAP Pharmaceutical will become a wholly owned subsidiary of Allergan.

Our Take

We are positive on Allergan’s decision to buy MAP Pharmaceuticals. Levadex’ approval would be a major boost for Allergan and will complement the company’s portfolio, which includes Botox (onabotulinumtoxinA). Botox is indicated for several indications including the treatment of chronic migraine headache.

We remind investors that last month the FDA approved Botox for the treatment of patients suffering from overactive bladder (OAB) with symptoms of urge urinary incontinence, urgency and frequency.

Allergan carries a Zacks Rank #3 (Hold). Right now, Eli Lilly and Company (LLY - Analyst Report) and Sanofi (SNY - Analyst Report) look more attractive with a Zacks Rank #2 (Buy).

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