“The Boards of Directors of both companies have unanimously approved the merger, which is expected to be immediately accretive to Pfizer’s Adjusted Diluted EPS upon closing, approximately $0.05 accretive in the first full year after close with additional accretion and growth anticipated thereafter”, the company said in a statement.
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Pfizer, whose oncology offerings include breast cancer drug Ibrance and several other promising immuno-oncology products, is now set to get access to Medivation’s successful prostate cancer drug Xtandi, as well as Talazoparib, another breast cancer treatment under development by Medivation.
Pfizer has been trying to set itself apart from competitors with its oncology pipeline, but has been lagging behind companies like Merck & Co. and Bristol-Myers Squibb, which are dominating the immune-oncology landscape.
Pfizer, best known for mass-market drugs such as impotence pill Viagra and cholesterol fighter Lipitor, began pursuing cancer drugs well after most industry leaders.
Pfizer said Monday that it will pay $81.50 per Medivation share.
It has missed out in pursuits before, including its high-profile £69.4 billion failed hostile bid for Britain’s AstraZeneca two years ago, while this April it scrapped a planned merger with Ireland’s Allergan due to plans to change U.S. tax laws.
It also produces the promising new talazoparib breast cancer drug, now in a phase three study. While hesitant, Pfizer has promised to decide the issue by the end of this year.
In the meantime, the company has focused on a series of partnerships and deals showing the company can grow as a whole. And company shares have begun to climb after years in the doldrums.
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Shares are up 8 percent this year, outpacing all major USA trading indexes. Its share price has more than doubled in the past six months on takeover talk. Post the announcement, the shares of Medivation – which closed at $67.16 on Aug. 19 – rocketed to $80.58 in early trading on Monday, Aug. 22, a jump of almost 20 percent.
