Pfizer will pay about $14 billion in cash for the cancer drug company Medivation, a deal that will add the pricey late-stage prostate cancer treatment Xtandi to its oncology portfolio.
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Medivation shares were up 20pc at $80.56 in premarket trade, just shy of the offer price of $81.50 per share in cash.
Correction: The original version of this story misstated Xtandi’s sales.
This is considered a major deal in the drug industry and may be announced on Monday, but can still “fall apart at the last minute”.
Pfizer said the deal is expected to be immediately accretive to its adjusted diluted earnings per share upon closing, around 5 cents in the first full year. Pfizer, Novartis, Celgene, Merck & Co, Gilead and AstraZeneca have all been mentioned in connection with a possible takeover in recent weeks.
In fact, the Medivation deal might even raise Pfizer’s taxes.
The deal would put Medivation as the company’s biggest acquirement since Hospira Inc. previous year when they bought it for $17 billion. Pfizer expects the proposed acquisition would build upon the success of its breast cancer drug IBRANCE and with its strong immuno-oncology portfolio. The medication, which is sold by Japanese drug maker Astellas Pharma, has an average wholesale price in the USA of more than $129,000 annually.
The transaction is a snub to the French pharmaceutical group Sanofi, which earlier offered $58 a share, which Medivation rejected in July.
Pfizer Inc.is reported to be buying Medivation Inc. It is expected that an acquisition of the company would boost the firm’s revenues and make it a leading marketer of effective prostate-cancer drugs.
Sanofi said while it recognised the potential strategic benefits of a combination with Medivation, it was a “disciplined acquirer and remained committed to acting in the best interests of Sanofi shareholders”. Pfizer’s statement said Medivation also has two promising late-stage cancer drugs, talazoparib, which would be used to treat breast cancer, and pidilizumab, which would be used to target lymphoma and other hematologic malignancies.
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Shares of Medivation Inc. soared almost 20 percent, or $13.33, to $80.49 early Monday, while Pfizer climbed 22 cents to $35.20. According to Market Realist, XTANDI has a 51% share in the novel hormone therapy market, and it is on track to becoming the fourth-largest oncology drug by 2021.
