SC TO-C

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 3, 2005

MGI PHARMA, INC.

(Exact name of registrant as specified in its charter)

Minnesota	0-10736	41-1364647
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of incorporation)		Identification No.)

5775 West Old Shakopee Road, Suite 100, Bloomington, Minnesota 55437

(Address of principal executive offices)

Registrant’s telephone number, including area code: (952) 346-4700

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

x Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 1 – Registrant’s Business and Operations

Item 1.01 Entry into a Material Definitive Agreement

On October 3, 2005, MGI PHARMA, INC. (the “Company”) announced that its wholly-owned subsidiary Granite Acquisition, Inc., a Delaware corporation (“Granite”), merged with and into Guilford Pharmaceuticals Inc., a Delaware corporation now known as MGI GP, Inc.(“MGI GP”), with MGI GP surviving as a wholly owned subsidiary of the Company (the “Merger”). Guilford is a biopharmaceutical company engaged in the research, development and commercialization of drugs that target the acute care market.

On October 3, 2005, in connection with the effectiveness of the Merger, the Company, MGI GP, and Wachovia Bank, National Association, as trustee (the “Trustee”), entered into a First Supplemental Indenture dated as of October 3, 2005 (the “Supplemental Indenture”), amending and supplementing the Indenture dated June 17, 2003, between MGI GP and the Trustee (the “Indenture”), relating to MGI GP’s 5% Convertible Subordinated Notes due 2008 (the “Notes”). The Supplemental Indenture provides, among other things, that (i) after the Merger and in accordance with the conversion provisions of the Indenture, holders of Notes will be entitled to convert the principal amount of the Notes (or any portion thereof equal to $1,000 or an integral multiple of $1,000) into shares of the Company’s common stock, $0.01 par value, and cash, where the number of shares of the Company’s common stock is determined by using a conversion price of $56.57, plus cash of $180.28 for each $1,000 principal amount of Notes converted, and (ii) the Company guarantees, to each holder of Notes and to the Trustee and its successors and assigns, (a) the full and punctual payment of principal of and interest on the Notes when due, whether at maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of MGI GP under the Indenture and the Notes, and (b) the full and punctual performance within applicable grace periods of all other obligations of MGI GP under the Indenture and the Notes. As of October 3, 2005, $69,354,000 aggregate principal amount of Notes were outstanding, and approximately $1.2 million of accrued interest was outstanding, with interest payments payable on each of January 1 and July 1 of each year. The foregoing description of the Indenture and the Supplemental Indenture are qualified in their entirety by reference to the text of the Indenture and the Supplemental Indenture, copies of which are attached hereto as Exhibits 4.1 and 4.2, respectively, and are incorporated by reference herein.

Section 2 – Financial Information

Item 2.01 Completion of Acquisition or Disposition of Assets

On October 3, 2005, upon closing of the Merger, all shares of Guilford common stock were exchanged for the right to receive an aggregate of approximately 5.3 million shares of Company common stock plus approximately $53.9 million in cash, which represents $3.75 per Guilford share of common stock, based on the average closing price of the Company’s common stock over a five trading day period ending on September 27, 2005, or total consideration of $179.6 million.

The press release is attached as an exhibit to this report. Please note that the five trading day period ended on September 27, 2005, and not on September 25, 2005, as disclosed in the press release.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information provided in Item 1.01 of this Form 8-K is hereby incorporated by reference into this Item 2.03.

Item 2.04 Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement

The information provided in Item 1.01 of this Form 8-K is hereby incorporated by reference into this Item 2.03.

The Merger triggered an obligation for MGI GP to make an offer to repurchase the Notes in accordance with the terms of the Indenture. Under the terms of the Indenture, in the case of certain “Designated Events,” including the Merger, MGI GP must make an offer to repurchase all or any part (equal to $1,000 or in integral multiples of $1,000) of the Notes then outstanding at a repurchase price in cash equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest and liquidated damages, if any, up to but excluding the payment date. Notice of the offer must be mailed to holders of the Notes not more than 20 days after the Merger, payment must be made no later than 60 days following the Merger, and the offer must remain open for at least 20 business days after the date on which notice is mailed. The Company expects to commence an offer to repurchase the Notes within the required time frame.

Section 5– Corporate Governance and Management

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

In accordance with the terms of the Merger Agreement, the Company’s Board of Directors appointed Dean J. Mitchell, formerly the president and chief executive officer of Guilford, to fill a vacancy on the Board of Directors upon the effectiveness of the Merger. Mr. Mitchell had certain interests in the Merger that are more fully described in the Proxy Statement/Prospectus included in the Company’s Registration Statement, as amended on Form S-4/A, filed on August 26, 2005.

Section 9– Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

(a) Financial statements of the business acquired. Financial statements of the business acquired will be filed in an amendment to this report no later than December 16, 2005

(b) Pro forma financial information. Pro forma financial information of the combined companies will be filed in an amendment to this report no later than December 16, 2005.

(c) Exhibits.

4.1 Indenture dated June 17, 2003, by and between Guilford Pharmaceuticals Inc. and Wachovia Bank, National Association, as Trustee, for 5% Convertible Subordinated Notes due 2008. (Incorporated by reference to Exhibit 4.03 of the Form 10-Q for the quarterly period ended June 30, 2003, filed on August 7, 2003, by MGI GP, INC., formerly known as Guilford Pharmaceuticals Inc. (Commission file number 000-23736)).

4.2 Supplemental Indenture dated October 3, 2005, by and among Guilford Pharmaceuticals Inc., MGI PHARMA, INC. and Wachovia Bank, National Association, as Trustee, for 5% Convertible Subordinated Notes due 2008.

99.1 Press Release of MGI PHARMA, INC. dated October 3, 2005.

THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER TO SELL THE GUILFORD PHARMACEUTICALS INC. 5% CONVERTIBLE SUBORDINATED NOTES DUE JULY 1, 2008 (THE “NOTES”). AT THE TIME THE OFFER IS COMMENCED, MGI PHARMA, INC. AND ITS WHOLLY OWNED SUBSIDIARY, MGI GP, INC., WILL FILE A TENDER OFFER STATEMENT WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION. THE TENDER OFFER STATEMENT (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND OTHER OFFER DOCUMENTS) WILL CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. THE OFFER TO PURCHASE, THE RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER OFFER DOCUMENTS WILL BE MADE AVAILABLE TO ALL NOTEHOLDERS AT NO EXPENSE TO THEM. WHEN AVAILABLE, THE TENDER OFFER STATEMENT (INCLUDING THE OFFER TO PURCHASE, THE RELATED LETTER OF TRANSMITTAL AND ALL OTHER OFFER DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION) CAN BE OBTAINED AT NO CHARGE AT THE COMMISSION’S WEBSITE AT WWW.SEC.GOV, OR FROM MGI PHARMA’S INVESTOR RELATIONS DEPARTMENT BY CALLING (212)332-4381.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

Date: October 7, 2005	MGI PHARMA, INC.
	By:	/s/ James C. Hawley
		James C. Hawley Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

4.1	Indenture dated June 17, 2003, by and between Guilford Pharmaceuticals Inc. and Wachovia Bank, National Association, as Trustee, for 5% Convertible Subordinated Notes due 2008. (Incorporated by reference to Exhibit 4.03 of the Form 10-Q for the quarterly period ended June 30, 2003, filed on August 7, 2003, by MGI GP, INC., formerly known as Guilford Pharmaceuticals Inc. (Commission file number 000-23736).)
4.2	Supplemental Indenture dated October 3, 2005, by and among Guilford Pharmaceuticals Inc., MGI PHARMA, INC. and Wachovia Bank, National Association, as Trustee, for 5% Convertible Subordinated Notes due 2008.
99.1	Press Release of MGI PHARMA, INC. dated October 3, 2005.

EX-4.2

Exhibit 4.2

GUILFORD PHARMACEUTICALS INC.

5% Convertible Subordinated Notes Due 2008

SUPPLEMENTAL INDENTURE

Dated as of October 3, 2005

to

INDENTURE

Dated as of June 17, 2003

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Trustee

SUPPLEMENTAL INDENTURE

This SUPPLEMENTAL INDENTURE (the “Supplemental Indenture”) is dated as of October 3, 2005, between Guilford Pharmaceuticals Inc., a Delaware corporation (the “Company”), MGI PHARMA, INC., a Minnesota corporation (“MGI PHARMA”), and Wachovia Bank, National Association, a national banking association organized and existing under the laws of the United States, as trustee (the “Trustee”).

WITNESSETH:

WHEREAS, there has previously been executed and delivered to the Trustee an indenture dated as of June 17, 2003 (the “Indenture”), under which the Company issued $69,354,000 aggregate principal amount of the Company’s 5% Convertible Subordinated Notes due 2008 (the “Convertible Notes”); and

WHEREAS, the Company, MGI PHARMA and Granite Acquisition, Inc. have entered into an Agreement and Plan of Merger, dated as of July 20, 2005, pursuant to which, substantially concurrently with the execution and delivery of this Supplemental Indenture, Granite Acquisition, Inc. will merge with and into the Company (the “Merger”), and the Company will survive and become a wholly-owned subsidiary of MGI PHARMA; and

WHEREAS, pursuant to the Merger, each outstanding share of Common Stock of the Company is being converted into shares of common stock of MGI PHARMA and cash; and

WHEREAS, Section 12.06 of the Indenture requires that, as a condition to a transaction such as the Merger, a supplemental indenture be executed and delivered providing that the Holders shall have the right to convert the Convertible Notes into the kind and amount of consideration receivable in the Merger by holders of the number of shares of Common Stock of the Company deliverable upon conversion of the Convertible Notes immediately prior to the Merger; and

WHEREAS, Section 12.06 of the Indenture requires that the supplemental indenture shall further provide for adjustments of the Conversion Price that are as nearly equivalent as practicable to the adjustments of the Conversion Price provided in Article XII of the Indenture, and shall contain such additional provisions as the Board of Directors shall reasonably consider necessary to protect the interests of the Holders of the Convertible Notes; and

WHEREAS, in accordance with Sections 9.06, 10.04, 10.05 and 12.09 of the Indenture, the Company is concurrently delivering to the Trustee an Officers’ Certificate and an Opinion of Counsel; and

WHEREAS, all acts and proceedings required by law, under the Indenture and by the respective [Certificates of Incorporation] of the Company and MGI PHARMA to constitute this Supplemental Indenture a valid and binding agreement for the uses and purposes set forth herein, in accordance with its terms, have been done and taken, and the execution and delivery of this Supplemental Indenture have been in all respects duly authorized by each of the Company and MGI PHARMA;

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Company, MGI PHARMA and Trustee hereby agree as follows:

1. For the purposes of this Supplemental Indenture, except as otherwise herein expressly provided or unless the context otherwise requires: (i) the capitalized terms and expressions used herein shall have the same meaning as corresponding terms and expressions used in the Indenture; and (ii) the words, “herein,” “hereof,” and hereby” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.

2. Pursuant to the provisions of Section 12.06 of the Indenture, from and after the effective time of the Merger, the Convertible Notes shall no longer be convertible into shares of Common Stock of the Company but instead shall be convertible into the Merger consideration as follows: a Holder of any Convertible Note may, at any time prior to the last Trading Day prior to the Maturity Date and subject to the conversion provisions of the Indenture, convert the principal amount of such Convertible Note (or any portion thereof equal to $1,000 or an integral multiple of $1,000) into shares of MGI PHARMA common stock, $0.01 par value, and cash, where the number of shares of MGI PHARMA common stock is determined by using a Conversion Price of $56.57, plus cash of $180.28 for each $1,000 principal amount of Notes so converted, subject to earlier termination of such right if the Note is called for redemption under Article III of the Indenture. Pursuant to the formula set forth in the foregoing sentence of this Section 2, each reference in the Indenture and each Security that refers to the delivery of Common Stock upon conversion of a Convertible Note should be read to also require delivery of the cash due upon conversion pursuant to the formula in the foregoing sentence.

3. From and after the effective time of the Merger, a Change of Control of MGI PHARMA shall have the same effect as a Change of Control of the Company under the Indenture, and a Change of Control of MGI PHARMA shall mean the same as “Change of Control,” as defined in Section 1.01 of the Indenture, substituting MGI PHARMA for the Company in that definition.

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4. In accordance with Section 12.06 of the Indenture, from and after the Effective Time of the Merger, adjustments to the Conversion Price as established by Section 2 of this Supplemental Indenture are to be as nearly equivalent as practicable to the adjustments provided for in Sections 12.05 and 12.06 of the Indenture, as if MGI PHARMA had been named in those sections as the Company. In the event of an adjustment to the Conversion Price under Sections 12.05 and 12.06 of the Indenture, MGI PHARMA will provide to the Trustee an Officers’ Certificate of MGI PHARMA equivalent to and with the same effect as the Officers’ Certificate contemplated by Section 12.09.

5. Conversion of the Convertible Notes into MGI PHARMA common stock and cash shall take place in the manner and under the terms provided for conversion by Sections 12.02, 12.03 and 12.07 of the Indenture.

6. From and after the effective time of the Merger, and from time to time as may be necessary thereafter, MGI PHARMA shall reserve, out of its authorized but unissued MGI PHARMA common stock, a sufficient number of shares of MGI PHARMA common stock to permit the conversion of all outstanding Convertible Notes into shares of MGI PHARMA common stock. Such shares of MGI PHARMA common stock shall be newly issued shares, shall be duly authorized, validly issued, fully paid and nonassessable and shall be free from preemptive rights and free of any lien or adverse claim. MGI PHARMA will endeavor to promptly comply with all federal and state securities laws regulating the offer and delivery of shares of common stock upon conversion of Convertible Notes, if any, and will list or cause to have quoted such shares of MGI PHARMA Common Stock on each national securities exchange or on the Nasdaq National Market or other over-the-counter market or such other market on which the MGI PHARMA Common Stock is then listed or quoted.

7. From and after the effective time of the Merger, MGI PHARMA will comply with the notice requirement of Section 12.10 as if MGI PHARMA had been named as the Company for purposes of that section.

8. From and after the effective time of the Merger, MGI PHARMA will comply with the terms of Article V of the Indenture as if MGI PHARMA was named as the Company in Article V of the Indenture.

9. Subject to the limitations provided for in Section 10 and from and after the effective time of the Merger, MGI PHARMA irrevocably and unconditionally guarantees (the “Guarantee”), to each holder of Convertible Notes and to the Trustee and its successors and assigns, (i) the full and punctual payment of principal of and interest on the Convertible Notes when due, whether at maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of the Company under the Indenture and the Convertible Notes, and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Company under the Indenture and the Convertible Notes. MGI PHARMA further

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agrees that the Guarantee constitutes a guarantee of payment, performance and compliance and not merely of collection. The obligation of MGI PHARMA to make any payment hereunder may be satisfied by causing the Company to make such payment.

10. The Guarantee is made subject to, and each Holder’s obligations to enforce the Guarantee is limited by, the provisions of Article XI of the Indenture as if MGI PHARMA was named as the Company for all purposes in Article XI of the Indenture; provided, however, that with respect to MGI PHARMA Designated Senior Debt shall not include the Senior Bank Credit Facility.

11. From and after the effective time of the Merger, MGI PHARMA will comply with the terms of section 4.02 of the Indenture as if MGI PHARMA is named as the Company in Section 4.02 of the Indenture and is the obligor for the Convertible Notes, and the Company will no longer have the obligation to comply with the terms of Section 4.02 of the Indenture; provided, however, that the obligation arising under Section 4.02 of the Indenture to comply with Section 314(a)(4) of the TIA will remain the obligation of the Company and MGI PHARMA will not need to comply with the requirements of Section 314(a)(4) of the TIA.

12. From and after the effective time of the Merger, the failure of MGI PHARMA to comply with any of its agreements contained in this Supplemental Indenture shall constitute an Event of Default for purposes of Article VI of the Indenture. Notwithstanding the previous sentence, failure of MGI PHARMA to comply with any of its agreements contained in this Supplemental Indenture shall only be an Event of Default if MGI PHARMA fails to remedy such failure to comply with its agreements within a period of sixty days after the receipt of written notice from the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding Convertible Notes. When any default under this paragraph is cured, it ceases.

13. Upon request of the trustee, MGI PHARMA will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Supplemental Indenture.

14. The Trustee accepts the amendment of the Indenture effected by this Supplemental Indenture and agrees to execute the trust created by the Indenture, as hereby amended, including the terms and conditions as set forth in the Indenture, as hereby amended, including the terms and provisions defining and limiting the liabilities and responsibilities of the Trustee, which terms and provisions shall in like manner define and limit its liabilities in the performance of the trust created by the Indenture, as hereby amended, and without limiting the generality of the foregoing, the Trustee has no responsibility for the correctness of the recitals of fact herein contained which shall be taken as the statements of the Company and MGI PHARMA and makes no representations as to the validity or sufficiency of this Supplemental and shall incur no liability or responsibility in respect of the validity thereof.

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15. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed by the Company and Trustee, and all the terms conditions and provisions shall remain in full force and effect.

16. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Convertible Notes heretofore or hereafter authenticated shall be bound hereby.

17. This Supplemental Indenture may be executed in any number of counterparts each of which when so executed shall be deemed to be an original, and all of such counterparts shall together constitute one and the same instrument.

18. This Supplemental Indenture shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with such laws.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be executed all as of the day and year first above written

MGI PHARMA, INC.
By:	/s/ Leon O. Moulder, Jr.
Its:	President and Chief Executive Officer
GUILFORD PHARMACEUTICALS INC.
By:	/s/ Dean J. Mitchell
Its:	President
WACHOVIA BANK, NATIONAL ASSOCIATION, as Trustee
By:	/s/ Monique Green
Its:	Vice President

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EX-99.1

Exhibit 99.1

MGI PHARMA Completes Acquisition of Guilford Pharmaceuticals

MINNEAPOLIS—(BUSINESS WIRE)—Oct. 3, 2005—MGI PHARMA, INC. (Nasdaq:MOGN):

• Combined Company Markets Aloxi(R) Injection and Gliadel(R) Wafer

• Response to Dacogen(R) Injection Approvable Letter On Track

• Saforis(TM) Oral Suspension NDA Preparation Underway

• Robust Oncology and Acute Care Pipeline Includes Four Pivotal Programs

• Updated Financial Guidance Provided

MGI PHARMA, INC. (Nasdaq:MOGN), an oncology and acute care focused biopharmaceutical company, today announced that it closed its previously-announced acquisition of Guilford Pharmaceuticals Inc., a biopharmaceutical company engaged in the research, development and commercialization of drugs that target the acute care market, on October 3, 2005.

Under the terms of the acquisition, which was approved by Guilford’s shareholders, all shares of Guilford were exchanged for 5.3 million shares of MGI PHARMA stock plus $53.9 million in cash, which represents $3.75 per Guilford share, as determined based on MGI PHARMA’s five day average stock price ending on September 25, 2005 (three days prior to the transaction closing date), or total consideration of $179.6 million. As part of this transaction, Dean Mitchell, formerly the president and chief executive officer of Guilford, has joined the MGI PHARMA Board of Directors. In addition, MGI PHARMA has extinguished an approximate $60 million obligation related to a revenue interest agreement between Guilford and Paul Royalty Fund. MGI PHARMA intends to offer to repurchase Guilford’s convertible debt during the fourth quarter of 2005, which totaled $69.4 million as of June 30, 2005. MGI PHARMA’s obligation to provide Guilford with bridge financing in the event that the acquisition closed after October 1, 2005 has terminated.

“This strategic transaction enhances MGI PHARMA’s late-stage acute care development pipeline by adding Aquavan(R) Injection, a complementary product to Aloxi(R) injection for PONV, and adds Gliadel(R) Wafer to our franchise of marketed oncology products,” said Lonnie Moulder, president and chief executive officer of MGI PHARMA. “Integration of our two organizations is well underway, and we continue to expect to recognize the efficiencies related to this transaction over the coming quarters. We look forward to leveraging the Guilford field organization’s well-established relationships in acute care to enhance the penetration of Aloxi injection for CINV in the hospital market and advancing our expanded research and development pipeline.”

Building Franchises in Oncology and Acute Care

Aloxi(R) Injection for Chemotherapy-Induced Nausea and Vomiting (CINV)

MGI PHARMA markets Aloxi (palonosetron hydrochloride) injection at a dose of 0.25 mg for the prevention of acute nausea and vomiting associated with initial and repeat courses of moderately and highly emetogenic cancer chemotherapy, and for the prevention of delayed nausea and vomiting associated with initial and repeat courses of moderately emetogenic cancer chemotherapy. Aloxi injection holds the number one market share position among injectable 5-HT3 receptor antagonists in the CINV market. Sales of Aloxi injection for 2005 are expected to be in the range of $250 to $260 million. MGI PHARMA projects that peak sales of Aloxi injection and Aloxi oral for CINV may approximate $500 million annually.

Gliadel(R) Wafer

Gliadel (polifeprosan 20 with carmustine implant) Wafer is a biodegradable wafer containing the chemotherapy agent carmustine, or BCNU, approved for the treatment of high-grade malignant gliomas as an adjunct to surgery and radiation. MGI PHARMA expects that Gliadel Wafer will be complementary with the Company’s existing oncology franchise and immediately additive to MGI PHARMA’s revenues. MGI PHARMA anticipates that fourth quarter Gliadel Wafer sales will approximate $10 million.

Dacogen(TM) Injection for Myelodysplastic Syndromes (MDS)

Dacogen (decitabine) injection is a product candidate that belongs to a class of drugs called hypomethylating agents and is the subject of more than 40 ongoing clinical trials including studies of various dosing regimens in MDS, a pivotal program in acute myeloid leukemia (AML), phase 2 studies in chronic myeloid leukemia (CML), and phase 1 trials in solid tumors. An approvable letter was received from the FDA for Dacogen injection in MDS on September 1, 2005, and the Company is diligently working to provide the requested analyses to the FDA early in the fourth quarter. The Marketing Authorization Application (MAA) for Dacogen injection for MDS is currently under review by the European Medicines Agency (EMEA). MGI PHARMA projects that peak sales of Dacogen injection may exceed $250 million annually.

Saforis(TM) Oral Suspension for Oral Mucositis

Saforis oral suspension, a product candidate, is an oral formulation of L-glutamine in a proprietary delivery vehicle designed to increase uptake of glutamine by the oral mucosa. Data from a phase 3 trial of Saforis oral suspension, conducted in 326 breast cancer patients receiving anthracycline-based chemotherapy regimens, was the subject of an oral presentation at the American Society of Clinical Oncology (ASCO) annual meeting in 2004. Saforis oral suspension successfully met the primary endpoint of this trial, which indicated that patients receiving Saforis experienced a 22% risk reduction of clinically significant (WHO is greater than or equal to grade 2) oral mucositis compared with placebo. Side effects of Saforis treatment were mild in nature and similar to placebo. MGI PHARMA plans to submit a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) early in the fourth quarter of 2005. MGI PHARMA estimates that peak sales of Saforis oral suspension may approximate $100 million annually.

Aquavan(R) Injection

Aquavan (fospropofol disodium) injection is a product candidate for procedural sedation that may offer the benefits of rapid onset and recovery. A randomized, dose-ranging study designed to evaluate four doses of Aquavan injection in patients undergoing colonoscopy is ongoing in order to optimize its pharmacological profile. Following completion of this dosing study, MGI PHARMA plans to evaluate Aquavan injection in a pivotal program to support a New Drug Application (NDA) filing with the Food and Drug Administration (FDA). The Aquavan injection pivotal program is planned to begin in early 2006. MGI PHARMA estimates that peak sales of Aquavan injection may exceed $250 million annually.

Aloxi(R) Injection for Post-Operative Nausea & Vomiting (PONV)

Aloxi injection is currently being evaluated in a pivotal program for the prevention of post-operative nausea and vomiting. Two clinical trials are evaluating three doses of Aloxi injection (0.025mg, 0.050 mg, or 0.075 mg) in more than 1,000 patients undergoing outpatient abdominal or gynecological laproscopic surgery or inpatient gynecological or breast surgery. The co-primary endpoint of this study is complete

response rate, defined as no emesis and no use of rescue medication, during the first 24 hours and 24-72 hour periods following surgery. The Company projects that peak sales of Aloxi injection for PONV may exceed $250 million annually.

ZYC101a

ZYC101a, a product candidate, is an immune response therapeutic currently being evaluated in a pivotal program designed to evaluate ZYC101a in young women with high grade cervical dysplasia, a condition that can lead to cervical cancer. Administration of ZYC101a stimulates an immune response that targets cells containing human papillomavirus (HPV), the agent that causes both cervical dysplasia and cervical cancer. A phase 2, multicenter, randomized placebo controlled study of 161 women with high-grade cervical dysplasia indicated that in a prospectively defined cohort of patients under 25 years of age, ZYC101a promoted complete resolution of high-grade dysplasia in 70% of patients, versus 23% in the placebo arm. The most frequently observed adverse event in these studies was mild to moderate injection site pain, which was manageable with ibuprofen or acetaminophen. MGI PHARMA anticipates that peak sales of ZYC101a may exceed $250 million annually.

Irofulven

Irofulven, MGI PHARMA’s novel and broadly active anti-cancer agent, is a product candidate currently being studied in a series of phase 1 and 2 monotherapy and combination therapy clinical trials. A multicenter, phase 2 clinical trial of irofulven in approximately 135 patients with hormone refractory prostate cancer is currently ongoing and is designed to assess time to disease progression, PSA response, pain palliation, survival, and quality of life in hormone-refractory prostate cancer patients who have progressed following treatment with docetaxel. MGI PHARMA plans to evaluate the results of this program with a goal to identify the registration path for irofulven before the end of 2005.

Neuroimmunophilin Ligands and GPI 1485

GPI 1485 is a product candidate that belongs to a class of small molecule compounds called neuroimmunophilin ligands. In preclinical experiments, neuroimmunophilin ligands have been shown to repair and regenerate damaged nerves without affecting normal, healthy nerves. GPI 1485 is being studied in phase 2 clinical trials for the treatment of Parkinson’s disease and post-prostatectomy erectile dysfunction and in pre-clinical development for HIV related dementia and neuropathy. GPI 1485 is licensed to Symphony Neuro Development Company.

ZYC300

ZYC300, an encapsulated plasmid encoding a novel tumor antigen, has completed a phase 1 study in 17 patients with late stage metastatic hematological and solid tumors. Data from this study were selected for oral presentation at ASCO 2003, and indicated that ZYC300 was well tolerated and biologically active. MGI PHARMA plans to advance the ZYC300 clinical program in solid tumors before the end of 2005.

NAALADase Inhibitors

N-Acetylated-Alpha-Linked-Acid-Dipeptidase (NAALADase) is a membrane-bound enzyme found principally in the central and peripheral nervous systems that is believed to play a role in modulating the release of glutamate, one of the brain’s most common chemical messengers. During conditions of acute injury or chronic disease, there is a large increase in glutamate release that causes a cascade of biochemical events, ultimately leading to cell injury and death. MGI PHARMA is currently pursuing

applications for NAALADase inhibitors in the area of chemotherapy-induced neuropathy in preclinical studies.

PARP Inhibitors

Poly (ADP-Ribose) polymerase (PARP) is a nuclear enzyme involved in repairing DNA or damage, mediating cell death and regulating immune response. PARP activation occurs when cells are damaged in instances such as during chemotherapy and cancer radiation therapy. Targeting PARP may prevent tumor cells from repairing DNA themselves and developing drug resistance, which may make them more sensitive to cancer therapies. The Company is focused on evaluating PARP inhibition as a chemotherapy and radiation therapy sensitizer in a preclinical program.

Financial Impact

For the year ending December 31, 2005, including the impact of the Guilford transaction, MGI PHARMA now anticipates:

— Total revenue of approximately $280 to 290 million, including

— Aloxi injection product sales of approximately $250 to 260 million;

— Cost of product sales of approximately $92 to 96 million;

— SG&A expenses of approximately $90 million;

— Net R&D expenses of approximately $70 million(a);

— Preliminary in process R&D of approximately $150 million;

— Preliminary GAAP operating loss from continuing operations of $116 to $122 million; and

— Preliminary pro forma operating income from continuing operations of $30 to $36 million. (Note: GAAP refers to U.S. generally accepted accounting principles. MGI PHARMA’s pro-forma operating income from continuing operations shown above excludes acquired in-process research and development expenses of $150 million and amortization of product acquisition intangible assets of $2 million. We are providing pro forma financial guidance in addition to, and not as a substitute for, financial measures calculated in accordance with GAAP. The Company is providing this pro forma number to facilitate a comparison of our business from period to period and allow investors to analyze revenues and operating expenses related to our core business. We encourage investors to carefully consider our financial guidance and results under GAAP, as well as our pro forma disclosures and the reconciliation between these presentations to more fully understand our business.)

(a) Includes an estimated $3 million related to expenses incurred for Symphony Neuro Development Company, which are reversed as minority interest prior to computing pre-tax income.

The effect of FASB Statement No. 123 (Revised 2004), Share-Based Payment, is not included in this guidance. Aggrastat(R) injection-related revenues and expenses will be accounted for as discontinued operations, as MGI PHARMA plans to continue efforts to divest this product. Although transaction timing and structure are difficult to predict, MGI PHARMA remains focused on and is in active discussions related to identifying commercialization paths outside of North America for our pipeline of late stage product candidates, including Dacogen injection, Saforis oral suspension, Aquavan injection, ZYC101a, and irofulven.

MGI PHARMA expects this transaction to be accretive beginning in 2008 and to significantly accelerate future earnings growth. Driven primarily by the pivotal development program for Aquavan and pre-launch costs, the net reduction of pre-tax income in 2006 and 2007 is expected to be approximately $35 million and $25 million, respectively.

MGI PHARMA plans to announce its third quarter 2005 results after market close on Wednesday, October 19, 2005.

About MGI PHARMA

MGI PHARMA, INC. is an oncology and acute care focused biopharmaceutical company that acquires, develops and commercializes proprietary products that address the unmet needs of patients. MGI PHARMA markets Aloxi(R) (palonosetron hydrochloride) injection and Gliadel(R) Wafer (polifeprosan 20 with carmustine implant) in the United States. The company directly markets its products in the U.S. and collaborates with partners to reach international markets. For more information about MGI PHARMA, please visit www.mgipharma.com.

THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER TO SELL THE GUILFORD PHARMACEUTICALS INC. 5% CONVERTIBLE SUBORDINATED NOTES DUE JULY 1, 2008 (THE “NOTES”). AT THE TIME THE OFFER IS COMMENCED, MGI PHARMA, INC. AND ITS WHOLLY OWNED SUBSIDIARY, MGI GP, INC., WILL FILE A TENDER OFFER STATEMENT WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION. THE TENDER OFFER STATEMENT (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND OTHER OFFER DOCUMENTS) WILL CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. THE OFFER TO PURCHASE, THE RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER OFFER DOCUMENTS WILL BE MADE AVAILABLE TO ALL NOTEHOLDERS AT NO EXPENSE TO THEM. WHEN AVAILABLE, THE TENDER OFFER STATEMENT (INCLUDING THE OFFER TO PURCHASE, THE RELATED LETTER OF TRANSMITTAL AND ALL OTHER OFFER DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION) CAN BE OBTAINED AT NO CHARGE AT THE COMMISSION’S WEBSITE AT WWW.SEC.GOV, OR FROM MGI PHARMA’S INVESTOR RELATIONS DEPARTMENT BY CALLING (212)332-4381.

This news release contains certain “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are typically preceded by words such as “believes,” “ expects,” “anticipates,” “intends,” “will,” “may,” “should,” or similar expressions. These forward-looking statements are not guarantees of MGI PHARMA’s future performance and involve a number of risks and uncertainties that may cause actual results to differ materially from the results discussed in these statements. Factors that might cause either company’s results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, the ability of MGI PHARMA’s product candidates to be proven safe and effective in humans, to receive marketing authorization from regulatory authorities, and to ultimately compete successfully with other therapies; continued sales of MGI PHARMA’s marketed products; development or acquisition of additional

products; reliance on contract manufacturing; changes in strategic alliances; continued access to capital; ability of MGI PHARMA to successfully complete the integration of Guilford with its existing operations; the risk that the perceived advantages of the Guilford transaction may not be achieved; and other risks and uncertainties detailed from time to time in MGI PHARMA’s filings with the Securities and Exchange Commission including its most recently filed Form 10-Q or 10-K. MGI PHARMA undertakes no duty to update any of these forward-looking statements to conform them to actual results.

CONTACT:	MGI PHARMA
	Jennifer Davis, 212-332-4381
	IR@mgipharma.com
	or
	Noonan Russo
	Robert Stanislaro, 212-845-4268
	robert.stanislaro@eurorscg.com
SOURCE:	MGI PHARMA, INC.