It would be approximately $0.05 accretive in first full year after close with additional accretion and growth anticipated thereafter, the company said.
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UCLA licensed Xtandi to Medivation in 2005, and then sold its royalty interest in March to Royalty Pharma, a pharmaceutical company.
Other eye-popping deals for cancer drugs lately include AbbVie’s acquisitions of Pharmacyclics for $21 billion last year and of Stemcentrx for $5.8 billion earlier this year.
Since Pfizer is tucking one of the world’s best-selling oncology drugs into its cancer drug lineup, it gets two potential future cancer drugs, and the deal is immediately accretive, there’s little to dislike about this deal.
Medivation also has two late-stage oncology assets, talazoparib, which is aimed at treating breast cancer, and pidilizumab for blood cancer.
Ropes also represented Pfizer past year on its $17bn (£13bn) buy of injectable drug giant Hospira, as well as Pfizer’s $130m (£99m) purchase of meningitis vaccines from GlaxoSmithKline and the acquisition of an $87m (£66m) minority interest in Dutch biopharma firm AM-Pharma.
Ten months ago, Pfizer attempted to acquire Allergan for $150 billion – a deal that would have created the largest drug company in the world and significantly lowered Pfizer’s US tax exposure through a corporate tax inversion.
A year ago this month, Cooley sat across the table from Medivation in its role advising BioMarin Pharmaceutical on the $570m (£433m) sale of its rights to talazoparib, a treatment for breast cancer. Pfizer is forecasting sales of between $51 billion and $53 billion and EPS of at least $2.38 this year, up from sales of $48.9 billion and EPS of $2.20 in 2015, and next year should be even better following this deal.
Shares of other companies that are developing cancer drugs, like Incyte, Clovis, and Tesaro, rose on Monday on hopes they might also attract suitors.
Xtandi generated USA net sales of US$330.3 million in the second quarter.
Xtandi is used to treat advanced metastatic prostate cancer, a type of prostate cancer that spreads throughout the body.
“The product is just at the beginning of its growth cycle”, Read predicted.
Reuters reported earlier this week that Pfizer, Sanofi, Merck & Co Inc., Celgene Corp and Gilead Sciences Inc. had submitted expressions of interest to acquire Medivation.
Jefferies analyst Jeffrey Holford said that while the price may be seen as expensive, the deal is a logical fit for Pfizer. The high price is partly due to Xtandi already competing strongly in the market.
Pfizer said the deal was approved by boards of both companies and should be completed in the third or fourth quarter. Pfizer will acquire Medivation, which has a blockbuster cancer drug in the pipeline, for $14 billion.
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J.P. Morgan Securities and Evercore were Medivation’s financial advisers, while Cooley LLP and Wachtell, Lipton, Rosen & Katz served as its legal advisers.
