Medivation’s $14 billion sale to USA drug giant Pfizer Inc for a hefty premium, the largest U.S. biotechnology acquisition so far this year, had investors on Monday speculating about more dealmaking in the sector.
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Pfizer Inc. will pay $81.50 per Medivation share.
Medivation’s stock closed at $67.16 on Friday and traded up more than 20% in Monday’s premarket session at $80.66. The acquisition of Medivation will give it another one in Xtandi. As oncology becomes one of the hottest areas in drug development, large drug and biotechnology firms have found only a few mid-sized targets with revenue-generating, approved treatments.
USA pharmaceutical giant Pfizer has confirmed that it will buy a United States cancer drug firm, Medivation, for about $14bn (€12.4bn). Pfizer said Xtandi generated approximately $2.2 billion in worldwide sales, and the purchase should add to its earnings per share immediately. Bloomberg describes these PARP inhibitors as something that “disrupt cancer cells’ process of DNA fix”.
Shares of BioMarin Pharmaceutical Inc for example, a $16.7 billion market capitalization company that focuses on rare diseases, rose as much as 7 percent on takeover speculation.
Medivation is known for its prostate cancer treatment, which has been used to treat 64,000 men in the US, generating $2.2 billion in worldwide net sales over the past four quarters.
Medivation Inc (MDVN) made into the market gainers list on Wednesdays trading session with the shares advancing 1.94% or 1.265 points. Earlier in April, France’s Sanofi had offered $52.50 per share initially to Medivation.
“Pfizer has an oncology and some urology presence for marketing of distribution for Xtandi, so I think it makes sense for Pfizer, too”, Nierengarten said.
The deal may be announced as early as Monday, said the people, who asked not to be identified because the matter is still private.
The deals hints at a shift in Pfizer’s M&A strategy from lowering taxes – the rationale behind the failed Allergan deal -to strengthen its drugs portfolio ahead of a decision on selling or spinning off its generic drugs business by late 2016.
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Beyond that, Medivation has a strong pipeline full of oncology assets, including the Phase 3 PARP inhibitor talazoparib, being developed for BRCA-mutated breast cancer.
