MAP Pharmaceuticals, Inc.

We are not profitable and do not expect to be profitable on a sustained basis in the foreseeable future. We have incurred significant net losses in each year since our inception, including net losses of approximately $32.9 million, $54.7 million and $9.0 million for the years ended December 31, 2011, 2010 and 2009, respectively. We have also incurred a net loss of $43.8 million for the nine months ended September 30, 2012. As of September 30, 2012, we had a deficit accumulated during the development stage of approximately $316.3 million. We have devoted most of our financial resources to research and development, including our pre-clinical development activities, clinical trials and manufacturing-related activities. We have not obtained regulatory approval for, or commercialized any product candidate and have therefore not generated any product revenues. In that regard, we expect to incur additional expenses as we continue to pursue our new drug application, or NDA, for LEVADEX, our most advanced product candidate, with the U.S. Food and Drug Administration, or the FDA. On March 26, 2012, we received a Complete Response letter in which the FDA described the reasons it was unable to approve our NDA and identified issues that we need to address in order to obtain FDA approval of LEVADEX. Following receipt of the Complete Response letter, we worked to address the issues identified in the Complete Response letter and had an End-of-Review meeting with the FDA to discuss our proposed plan for responding to the Complete Response letter. We resubmitted the NDA for LEVADEX in October 2012. Even though we submitted what we believe is a complete response to the items in the Complete Response letter, the FDA may not agree that we have completely addressed their concerns or approve our NDA. If the FDA determines that our resubmission does not provide a complete response or identifies additional concerns or issues with our NDA, the FDA may request that we conduct additional studies or provide additional data or analysis. If we are ultimately required by the FDA to perform studies in addition to those we have conducted, our expenses will increase beyond expectations and the timing of any potential product approval may be delayed. We expect an increase in our expenses associated with our manufacturing work and with preparing for commercialization. In addition, we expect to continue to incur costs to support operations as a public company. As a result, we may continue to incur substantial net losses and negative cash flow for the foreseeable future. These losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital.

Developing biopharmaceutical products, including conducting pre-clinical studies and clinical trials, and establishing manufacturing capabilities and an effective sales and marketing infrastructure, is expensive. While we have completed our clinical development program for LEVADEX for the acute treatment of migraine in adults, we expect to have continued expenses in connection with our ongoing activities, particularly as we seek to obtain approval of our NDA for LEVADEX, our most advanced product candidate, for the acute treatment of migraine in adults. In the March 26, 2012 Complete Response letter received from the FDA, the FDA requested that we address issues relating to the chemistry, manufacturing and controls, or CMC, of LEVADEX. The FDA also stated that manufacturing deficiencies identified during a recent facility inspection of one of our third party manufacturers need to be resolved to the FDA’s satisfaction. The FDA indicated in the Complete Response letter that it had not been able to complete its review of inhaler usability information requested late in the review cycle by the FDA. We resubmitted the NDA for LEVADEX in October 2012. The FDA will not determine the type of resubmission (Class 1 or Class 2) and the resulting review timeline until after the resubmission has been accepted for filing. Even though we submitted what we believe is a complete response to the items in the Complete Response letter, the FDA may not agree that we have completely addressed their concerns or approve our NDA. If the FDA determines that our resubmission does not provide a complete response or identifies additional concerns or issues with our NDA, the FDA may request that we conduct additional studies or provide additional data or analysis. If any additional studies, analysis or data are required by the FDA after our resubmission, it would require additional time and resources and may further delay our ability to obtain regulatory approval for LEVADEX, and our expenses will increase beyond expectations.

We have invested a significant portion of our efforts and financial resources in the development of LEVADEX and our Unit Dose Budesonide, or UDB, product candidate. In February 2009, we announced top-line results from our first Phase 3 trial of UDB, indicating that the trial did not meet its co-primary endpoints in either dose evaluated when compared to placebo. On July 8, 2009, we received a notice of termination of our license agreement with AstraZeneca AB, or the AstraZeneca Agreement, related to our UDB product candidate. Following the termination of the AstraZeneca Agreement, we suspended development of UDB. We are now largely dependent on the success of one product candidate, LEVADEX, for which we have completed a Phase 3 clinical development program for the acute treatment of migraine in adults. Our ability to generate product revenue is dependent on the successful regulatory approval and commercialization of this product candidate. In the March 26, 2012 Complete Response letter received from the FDA, the FDA requested that we address issues relating to the chemistry, manufacturing and controls, or CMC, of LEVADEX. The FDA also stated that manufacturing deficiencies identified during a recent facility inspection of one of our third party manufacturers need to be resolved to the FDA’s satisfaction. The FDA indicated in the Complete Response letter that it had not been able to complete its review of inhaler usability information requested late in the review cycle by the FDA. We resubmitted the NDA for LEVADEX in October 2012. The FDA will not determine the type of resubmission (Class 1 or Class 2) and the resulting review timeline until after the resubmission has been accepted for filing. Even though we submitted what we believe is a complete response to the items in the Complete Response letter, the FDA may not agree that we have completely addressed their concerns or approve our NDA. If the FDA determines that our resubmission does not provide a complete response or identifies additional concerns or issues with our NDA, the FDA may request that we conduct additional studies or provide additional data or analysis. If any additional studies, analysis or data are required by the FDA after our resubmission, it would require additional time and resources and may further delay our ability to obtain regulatory approval for LEVADEX, and our expenses will increase beyond expectations.

All of our product candidates in development require regulatory review and approval prior to commercialization, including review of pre-clinical data, clinical data and inspection of facilities and processes, including those relating to clinical and manufacturing activities. Any delays in the regulatory review or approval of our product candidates in development would delay market launch, increase our cash requirements and result in additional operating losses. In the March 26, 2012 Complete Response letter received from the FDA, the FDA requested that we address issues relating to the chemistry, manufacturing and controls, or CMC, of LEVADEX. The FDA also stated that manufacturing deficiencies identified during a recent facility inspection of one of our third party manufacturers need to be resolved to the FDA’s satisfaction. The FDA indicated in the Complete Response letter that it had not been able to complete its review of inhaler usability information requested late in the review cycle by the FDA. We resubmitted the NDA for LEVADEX in October 2012. The FDA will not determine the type of resubmission (Class 1 or Class 2) and the resulting review timeline until after the resubmission has been accepted for filing. Even though we submitted what we believe is a complete response to the items in the Complete Response letter, the FDA may not agree that we have completely addressed their concerns or approve our NDA. If the FDA determines that our resubmission does not provide a complete response or identifies additional concerns or issues with our NDA, the FDA may request that we conduct additional studies or provide additional data or analysis. If any additional studies, analysis or data are required by the FDA after our resubmission, it would require additional time and resources and may further delay our ability to obtain regulatory approval for LEVADEX, and our expenses will increase beyond expectations.

Any of these factors could cause the delay of required approvals or commercialization of our products, could prevent us from commercializing our product candidates successfully, could cause the suspension of initiation or completion of clinical trials and regulatory submissions, and could lead to higher product costs. Furthermore, if our contract manufacturers fail to deliver the required commercial quantities of finished product on a timely basis and at commercially reasonable prices and we are unable to find one or more replacement manufacturers capable of production at a substantially equivalent cost, in substantially equivalent volumes and quality and on a timely basis, we would likely be unable to meet demand for our products and we would lose potential revenue. It may take a significant period of time to establish an alternative source of supply for our product candidates and to have any such new source approved by the FDA. In the March 26, 2012 Complete Response letter received from the FDA, the FDA requested that we address issues relating to the chemistry, manufacturing and controls, or CMC, of LEVADEX. The FDA also stated that manufacturing deficiencies identified during a recent facility inspection of one of our third party manufacturers need to be resolved to the FDA’s satisfaction. While we believe that we have addressed the issues in the Complete Response letter, we continue to work closely with our third party manufacturer to ensure that the third party manufacturer has and will continue to meet all FDA requirements; however, we are dependent on the third-party manufacturer to do so.