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. Perhaps the most notable example is AbbVie Inc’s (ABBV.N) $21 billion purchase a year ago of Pharmacyclics. Buoyed by sales of Ibrance (palbociclib), a breast cancer treatment, Pfizer surpassed analysts’ expectations when it reported its Q2 2016 earnings in August.
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Medivation also has two more products in the field of oncology that are now experimental, but hold promise. Sales of oncology related drugs around the world account for nearly sales worth $80 billion a year that is growing by over 10% every year.
However, it is not without a rival. Xtandi, which Astellas Pharma Inc. also sells, could be one of the top-selling cancer drugs by 2020, according to EvaluateSHYPharma. Johnson & Johnson is developing new prostate-cancer drug that could compete with Xtandi in future market.
On Friday, Medivation shared stopped trading in NY at $67.16. Medivation has rejected offers from two perspective buyers early this year.
Pfizer said Monday that it will pay $81.50 per Medivation share.
The acquisition will allow Pfizer to expand its oncology portfolio.
The company is optimistic that the molecule will be blockbuster drug after its launching.
In the past year, Pfizer has vacillated between bulking itself (acquiring Hospira last year), trying to move overseas (its collapsed 0 billion inversion deal with Allergan ) and considering breaking itself up.
The boards of both companies have approved the deal, which is targeted to close in the third or fourth quarter. Although everything is still under wraps at the moment, internal sources reveal that Medivation may accept Pfizer’s offer of $14 billion and pass up an earlier offer of $9.3 billion made by Sanofi.
Medivation also has a promising experimental breast cancer drug called talazoparib and an immuno-oncology drug called pidilizumab in late-stage development.
The acquisition would also further Pfizer CEO Ian Read’s efforts to bolster what he refers to as the innovative side of the company’s business.
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In addition to Xtandi, which is already approved for sale in the U.S. and is forecast to generate $5.7bn in sales by 2020, Medivation has a breast cancer treatment under development, Talazoparib. CEO David Hung says he chose to found the company after watching a 28-year-old breast-cancer patient die during his oncology fellowship.
