MAP Pharmaceuticals Inc. (NASDAQ: MAPP) announced the issuance of a U.S. patent which extends Levadex intellectual property protection to 2028.
"We believe Levadex's intellectual property (IP) protection has been strengthened, while recent market weakness has created an attractive buying opportunity," said Liana Moussatos, an analyst at Wedbush Securities.
The U.S. patent 7,994,197 "Method of Therapeutic Administration of DHE to Enable Rapid Relief of Migraine while Minimizing Side Effect Profile" was recently issued and the company believes this patent extends intellectual property protection for Levadex to 2028.
MAP Pharma's management has cited the success of Purdue Pharma protecting OxyContin against generic entrants based on intellectual property protecting OxyContin’s pharmacokinetics profile.
Moussatos said this strategy may be just as or even more effective as a composition-of-matter patent since it would block any dosage form of dihydroergotamine (DHE) which replicates Levadex’s PK profile which the company has associated in clinical trials with efficacy and safety as an acute migraine treatment.
MAPP ended second quarter with $103 million in cash which Moussatos projects can last into 2013 -- her projected first full-year of profitability. MAPP should receive $20 million in third quarter from Allergan as a milestone payment for the FDA acceptance of filing for the Levadex NDA.
The company also has an additional $40 million potential draw-down from the Azimuth facility until November 2011. The company has completed all clinical work necessary to support the announced NDA filing via the 505(b)(2) pathway.
With NDA filing announced, the company went on to announce the prescription drug user fee act (PDUFA) deadline of March 26, 2012, for a FDA approval decision and, if approved, launched shortly thereafter.
Moussatos does not anticipate an advisory panel will be necessary since the active ingredient in Levadex, DHE, is already approved to treat acute migraine in an IV formulation.
Moussatos believes it is time for investors to add MAPP ahead of additional potential partnerships for Levadex. MAPP has pulled back with the rest of its peers in August from about $15 at the end of July to under $12 -- which she believes has created an especially attractive buying opportunity.
With what Moussatos believes is relatively low near-term financing risk and no major negative news expected, she believes MAPP could almost double in the next 12 months. Additionally, she believes MAPP is a potential big pharma acquisition target with a take-out value of about $39 per share.
The brokerage maintained its "outperform" rating on shares of MAP Pharmaceuticals with a fair value estimate of $29.
"Our fair value is calculated based on a sum-of-parts for each drug candidate/indication combination with established clinical proof-of-concept. Individual fair value estimates are calculated based on a 30 percent annual discount from our net peak annual sales projection and a 1-10 times multiple is applied based on stage of development to reflect risk. Our take-out value of about $39 is based on the total sum of the company’s pipeline value plus cash," said Moussatos.
MAP Pharma stock moved down 2.60 percent to $11.22 in the NASDAQ Stock Market at 10:02 am EDT.