IPO Report: Mapi Pharma Ltd. (MAPI)

Francis Gaskins |

mapi pharma IPO, IPO report, generic drugs, stocks to buy now, IPOs today, small-cap stocksMapi Pharma Ltd. ($MAPI) is a development stage pharmaceutical company, engaged in the development of high-barrier to entry and high-added value generic drugs that include complex APIs, formulations and LCM products that target large markets. It is headquartered in Ness Ziona, Israel,

Ten other companies are scheduled for the week of July 21, 2014. The full IPO calendar is available at IPOpremium.

The manager is Aegis Capital Corp. The joint managers is Chardan Capital Markets.

MAPI scheduled a $38 million IPO with a market capitalization of $213 million at a price range midpoint of $14 for Thursday, July 24, 2014 on the Nasdaq.  SEC filings

Mapi Pharma IPO Report

Overview

MAPI is a development stage pharmaceutical company, engaged in the development of high-barrier to entry and high-added value generic drugs that include complex APIs, formulations, and LCM products that target large markets.

In January 2014, MAPI signed an agreement with a large pharmaceutical company to jointly develop, manufacture, and commercialize Risperdal LAI.

Valuation

Glossary

Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

Annualizing Q1 '14

         

Mapi - Pharma Ltd. (MAPI)

$213

n/a

-35.5

3.9

4.5

18%

             

Conclusion

The rating on MAPI is neutral.  This generic drug development company, however, is worth watching.

Business

MAPI is a development stage pharmaceutical company, engaged in the development of high-barrier to entry and high-added value generic drugs that include complex APIs, formulations and LCM products that target large markets.

MAPI is currently developing two LCM products for the treatment of multiple sclerosis (“MS”) and neuropathic pain.

LCM products are new forms of marketed drugs which may offer advantages over existing formulations, such as improved patient compliance and reduced side effects, and allow extended patent and regulatory exclusivity of a marketed drug due to different formulations of product components, for example through depot or extended release formulations.

MAPI’s LCM products seek to add value to products that are expected to go off-patent by integrating off-patent APIs with its formulations, resulting in a new final combination that is believed to be patentable.

Business strategy

-- Complete clinical development and regulatory approval for the Risperidone LAI, a generic depot formulation of Risperdal Consta.

According to Johnson & Johnson, Risperdal Consta produced revenues of approximately $1.3 billion in 2013.

MAPI plans to start bioequivalent clinical trials of Risperidone LAI in the third quarter of 2014. MAPI intends to launch  Risperidone LAI in 2018. Of the 12 Orange Book listed patents for Risperdal Consta, only four expire after the proposed launch date. Based on a preliminary review by outside counsel, MAPI's LAI formulation does not infringe any claims of these remaining patents.

In January 2014, MAPI signed an agreement with a large pharmaceutical company to jointly develop, manufacture and commercialize Risperdal LAI. As of the date of the prospectus, MAPI  has not filed any applications with the FDA or any foreign jurisdictions necessary to commence clinical studies for Risperidone LAI.

-- Continue the development and commercialization of complex APIs and formulations portfolio. APIs are complex due to their intricate, multiple production stages and existing patent limitations.

MAPI's current portfolio consists of 13 APIs scheduled to launch starting in 2017, with early pre-patent expiration quantities of registration batches of certain products to be supplied to generic pharmaceutical companies beginning in 2014.

MAPI also plans to develop formulations for five of its APIs.

-- Pursue co-development and marketing partnerships. MAPI has entered into co-development agreements with large pharmaceutical companies in connection with the development of Pregabalin ER and Risperidone LAI, as well as a co-development and marketing agreement with a large pharmaceutical manufacturer to manufacture the formulations for certain complex generic drugs.

MAPI intends to pursue additional co-development partnerships in order to accelerate the clinical development and maximize the market potential for its APIs, as well as for Glatiramer Acetate Depot.

In particular, MAPI intends to partner with large pharmaceutical companies that possess market know-how and marketing capabilities to complete the development and commercialization of MAPI's products.

LCM portfolio

MAPI’s LCM portfolio focuses on big-market products, consisting of (i) Glatiramer Acetate Depot, a once-monthly injection for the treatment of MS, (ii) Pregabalin ER, extended release capsules for the treatment of neuropathic pain and epilepsy, and (iii) Risperidone LAI, a depot formulation of Risperdal Consta. MAPI is developing Pregabalin ER currently only in Latin America, although further development in the U.S. and the European Union is expected to be either under the ANDA or 505(b)(2) shortened regulatory pathway.

MAPI expects that Risperidone LAI will also be developed under either the ANDA or 505(b)(2) shortened regulatory pathway.

API portfolio

MAPI’s current API portfolio consists of 13 complex APIs and formulations scheduled to launch between 2017 and 2028, with early pre-patent expiration quantities of registration batches to be supplied to generic pharmaceutical companies beginning in 2014.

Marketing

MAPI plans to market its complex APIs and formulations through two channels.

The first will be by licensing out the APIs to pharmaceutical companies that will manufacture the formulations and commercialize them into the market.

The second will be by developing the APIs and the respective formulations ourselves and ultimately selling or licensing them, in certain cases using regulatory pathways that enable a period of exclusivity and a first generic positioning.

For its LCM products, MAPI plans to seek co-development partnerships with large pharmaceutical companies and enter into co-development arrangements at the manufacturing and/or marketing stages.

At present, MAPI does not plan to develop its own sales organization, but rather to focus on business development activities, co-development and product sales partnerships.

Dividend Policy

No dividends are planned.

Intellectual Property

MAPI has obtained three patents in the U.S. and have applied for several others in the U.S., covering certain products and product candidates, and MAPI is also considering development of brand names and trademarks for other products and product candidates.

Generally, the brand pharmaceutical business relies upon patent protection to ensure market exclusivity for the life of the patent. MAPI considers the overall protection of its patents, trademarks and contractual rights with partners to be of material value and act to protect these rights from infringement and misappropriation.

MAPI’s business is not dependent, however, upon any single patent, trademark or contract.

Competition

MAPI views its principal competitors in the generic pharmaceutical products and LCM markets as Teva Pharmaceutical Industries Ltd. (TEVA) , Impax Laboratories, Inc. (IPXL) , Alkermes Plc. (ALKS) , Momenta Pharmaceuticals, Inc. (MNTA) , and Andrx Corporation, a private U.S. company.

Due to their size, in general MAPI’s competitors may have significant advantages over MAPI.

5% stockholders

Ehud Marom     50%

Allegro               50%

Use of proceeds

MAPI expects to net $33 million from its IPO. Proceeds are allocated as follows:

$12 million to expand its clinical development program, specifically with respect to Glatiramer Acetate Depot and Risperidone LAI, as well as other products;

$7 million to finance the completion of its manufacturing plant in Neot Hovav, Israel;

$3 million to continue the development and commercialization of its complex API and formulation products; and

the balance of the net proceeds for general corporate purposes, including working capital requirements.

MAPI believes that based on the anticipated size of this offering, the net proceeds from the offering, together with its current cash reserves, should be sufficient to complete Phase II trials in both Europe and Israel and a Phase III trial for Glatiramer Acetate Depot and a bioequivalence trial for Risperidone LAI in India.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
ALKS Alkermes plc 56.25 1.36 2.48 892,820
MNTA Momenta Pharmaceuticals Inc. 14.15 0.35 2.54 518,784
IPXL Impax Laboratories Inc. 13.65 -0.10 -0.73 989,345
TEVA Teva Pharmaceutical Industries Limited American De 36.53 -0.04 -0.11 6,924,116
PWB.H:PUR Power Tech Corporation Inc. n/a n/a n/a 0

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