Shares of Medivation Inc. soared almost 20 percent, or $13.25, to $80.41 before the opening bell Monday, while Pfizer stock slipped 18 cents to $34.80.
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Pfizer has agreed to acquire USA biopharmaceutical firm Medivation in a transaction valued at about $14bn.
United States-based pharmaceutical company Pfizer is set to buy American cancer drug firm Medivation in a $14-billion (Rs 94,048 crore approximately) deal.
The announcement of the deal was made on Sunday. Amgen was one of the pioneering biotechs, famed for the cancer drugs that poured out from its labs, but those products were aging. The transaction is a snub to the French pharmaceutical group Sanofi, which earlier offered USA $58 a share, which Medivation rejected in last month. The merger deal is likely to add $0.05 cents each share to the earnings of Pfizer in the first full year itself.
The main draw for Pfizer – and several other big pharmas and biotechs – is Medivation’s market-leading prostate cancer drug Xtandi (enzalutamide), which brings more than $2 billion in sales annually.
Xtandi, one of Medivaton’s drugs, already is generating close to $2 billion in annual sales and has been given the potential to double, according to reports by analysts. Cubicin generated almost $1 billion in yearly sales, and it fit into Merck’s expanding portfolio of antibiotics and other drugs given in hospitals.
Following weeks of speculation Pfizer has stepped forward with a $14-billion bid for Medivation, beating Sanofi and other suitors to the finish line in a move created to boost its oncology portfolio. The transaction is subject to USA and other regulatory approvals. The company’s stock has gone up this year, up more than 8 percent. The company has two more experimental drugs in the pipeline, one to treat breast cancer and another for use in immuno-oncology.
Medivation’s drugs in development could also complement Pfizer’s efforts to develop combinations of cancer agents with so-called immunotherapies, which deploy the immune system in the fight against cancer.
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Reuters had reported that Pfizer, Merck & Co Inc, Celgene Corp and Gilead Sciences Inc had submitted expressions of interest to acquire Medivation. Pfizer will also get access to Talazoparib, another breast cancer treatment under development. 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. And company shares have begun to climb after years in the doldrums.
