Pfizer’s offer for the San Francisco, California-based Medivation goes far beyond the company’s market value of $11.1 billion.
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In May, Pfizer announced it would buy Anacor Pharmaeuticals for $5.2 billion to add an eczema gel to its portfolio.
Pharmaceutical giant Pfizer has said it is going to buy the USA cancer drug company Medivation.
Medivation shares jumped almost 20 percent to close at $80.42, just shy of the offer price of $81.50 per share. Earlier this year, it rejected a $9.3 billion offer from the French drugmaker Sanofi. The firm has maintained Outperform rating on Pfizer stock and a PT of $40, which suggests that the stock has 14.81% upside potential over the last close of $34.84.
Medivation is known for its prostate cancer treatment, which has been used to treat 64,000 men in the USA, generating $2.2 billion in worldwide net sales over the past four quarters.
The deals hints at a shift in Pfizer’s M&A strategy from lowering taxes – the rationale behind the failed Allergan deal – to strengthen its drugs portfolio ahead of a decision on selling or spinning off its generic drugs business by late 2016.
The Medivation acquisition is the biggest deal from Pfizer since it purchased Hospira Inc.in 2015 for $17 billion. They will be able to sell the drug in the U.S. and other countries.
Pfizer has sought expansion of its oncology medications, and a blockbuster drug such as Xtandi will complement Pfizer’s breast cancer treatment Ibrance.
It is also being evaluated in phase 2 studies for the potential treatment of advanced breast cancer and hepatocellular carcinoma.
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. Pfizer expects to complete the acquisition in the third or fourth-quarter 2016.
Shares are up 8 percent this year, outpacing all major US trading indexes. Other companies that reportedly were interested in Medivation included Gilead Sciences in Foster City, Merck, AstraZeneca and Celgene.
What: Investors in Medivation (NASDAQ: MDVN) are having a pleasant start to the trading week.
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In its second-quarter earnings call earlier this month, Medivation reported continued double-digit year-over-year growth for Xtandi, affirming the company’s expectations of more than 50 percent revenue growth for the year.
