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Signs Point to MAP Pharma Drug Rejection

MOUNTAIN VIEW, Calif. ( TheStreet) -- No official word yet but U.S. regulators have more than likely rejected an inhaled migraine drug from MAP Pharmaceuticals (MAPP).

How do I know this? In response to a question about the regulatory status of Levadex, an FDA spokesperson told me via email, "The company MAP Pharma should be able to provide you with an update on Levadex."

FDA does not publicly announce drug rejections, therefore, the most likely scenario is that regulators told MAP Pharma earlier today that Levadex cannot be approved. It's up to MAP Pharma to disclose the Levadex rejection.

"The company will update publicly when ready," said a MAPP Pharma spokesperson via an email sent at 2 pm EDT. More than two hours later, we're still waiting for MAP Pharma to say something about Levadex. If the drug were approved, MAP Pharma would be quick with an announcement.

MAP Pharma shares were up 7% to $17.14 Monday before being halted just before 2 pm EDT. The stock's market value has increased 30% this year on investor confidence in Levadex's approval. A chorus of sell-side analysts predicting the same certainly helped.

MAP's stock gains will disappear if/when the FDA's rejection of Levadex is confirmed. How far the stock falls will likely depend on the specific concerns raised by FDA and what the company needs to do in order to resubmit the drug for approval again.

MAP Pharma has about $3.30 per share cash based off its first-quarter burn rate.

Levadex is an inhaled formulation of DHE, a drug already used in intravenous and nasal spray formulations to treat migraines. MAP Pharma developed a simple device that allows patients suffering from acute migraines to inhale the drug into their lungs, thereby accelerating pain relief.

Had Levadex been approved, Allergan (AGN - Get Report) was set to market the drug to pain specialists and neurologists under a marketing partnership signed with MAP Pharma. Nektar Therapeutics> (NKTR - Get Report) was to receive royalties on sales of the drug.

--Written by Adam Feuerstein in Boston.

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Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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