“This transaction is another example of how we are effectively deploying our capital to generate attractive returns and create shareholder value”. In addition, Medivation has a wholly-owned, late-stage oncology pipeline, which includes two development-stage oncology assets, talazoparib and pidilizumab.
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Previously, French drug company Sanofi SA had made an unsolicited proposal, which the biotech rejected in April, saying the offer substantially undervalued the company.
Expected to “immediately accelerate revenue growth”, Pfizer’s multi-billion-dollar deal values Medivation at $81.50 a share.
Pfizer has been seeking to expand its lineup of such oncology treatments.
“While Ibrance is doing great, Pfizer could benefit from more critical mass in oncology”, pharmaceuticals analyst Timothy Anderson of Sanford C. Bernstein said in a client note.
The drug is now being tested in Phase III studies in non-metastatic prostate cancer and hormone-sensitive prostate cancer, as well as Phase II trials for the potential treatment of advanced breast cancer and hepatocellular carcinoma.
San Francisco-based Medivation produces the prostate-cancer treatment Xtandi.
Medivation is a specialty drugmaker, focused on developing medicines for cancer and serious diseases with few treatment options. It was originally approved by the Food and Drug Administration in 2012; it does cost a list price of $129,000 in the USA, however, which has gotten it in some hot water with Congress.
The current M&A between the drug and biotechnology industry illustrates the future demand for new cancer treatments adding up to patient’s lives and burgeoning revenues of the companies holding the business.
In case if Pfizer’s bid accepted, Medivation would make more than double the $6 billion it was prized earlier in the year.
“Given the already very high price being discussed, the hard public relationship between Medivation and Sanofi. we see a higher bid as very unlikely, but not impossible”, RBC Capital Partners wrote in a client note ahead of the announcement.
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Pfizer will be strengthening its portfolio of innovative cancer-fighting drugs, like Medivation’s biggest seller XTANDI – a prostate cancer treatment that brought in $2.2 billion in revenue previous year. The company’s stock was up 19.74% following the Pfizer announcement, closing the day at $80.42. In Medivation’s second-quarter earnings call, Xtandi alone reported double-digit growth, affirming the pharma giant’s expectations on the blockbuster drug.
