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, which makes the erectile dysfunction treatment Viagra and fibromyalgia and pain treatment Lyrica, expects to finance it with existing cash. According to regulatory filing, if the acquisition would not be complete, Medivitation could pay Pfizer a hefty $510 million termination fee. Xtandi would give the NY drug company a beachhead in prostate cancer complementing its breast-cancer treatment Ibrance, which is on track to be a blockbuster. These drugs have high prices often surpassing $100,000 a year per patient.
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This acquisition, would further the efforts of Ian Read the Pfizer CEO, to bolster the innovative side of the business. He said on a call with analysts Monday that the move “accelerates our strategy in line with our priorities”.
The Medivation acquisition is the biggest deal from Pfizer since it purchased Hospira Inc.in 2015 for $17 billion. The company’s founder said Pfizer, by contrast, was the ideal marriage partner.
“This compelling transaction will deliver significant and immediate value to our stockholders and provides new opportunities for our employees as part of a larger company”, said David Hung, M.D., Medivation’s President and Chief Executive Officer.
Pfizer Inc has agreed to buy Medivation Inc which is a biopharmaceutical company focused on developing and commercializing in the treatment for cancer.
Xtandi is the star in Medivation’s portfolio with sales of US$330mln in the latest quarter and is key to the company’s target to grow annual sales this year by 50%.
“We see a lot of parallels between prostate and breast cancer”, Bourla said. The company rejected the bid, saying that it undervalued the business substantially.
Medivation Inc. and the Japanese drugmaker Astellas Pharma jointly market Xtandi, with Astellas selling the drug outside the U.S.
Medivation has the rights to Xtandi in the United States, with Japanese firm Astellas having ownership elsewhere. A bidding war ensued.
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Medivation’s stock has risen significantly this year, up more than 38 percent.
