Pfizer is paying $81.50 per share for Medivation, which has a market capitalization of more $11 billion. The company already has a breast-cancer treatment to its share, a new add-on treatment could mean boost in the company’s market for oncology treatments.
Advertisement
The prostate-cancer drug that Medivation now makes is Xtandi. The drug has also generated criticism for its high price.
According to Evaluate Pharma, Xtandi, could be one of the top-selling cancer drugs by 2020.
However, it is not without a rival. And its big appeal comes from an experimental breast-cancer treatment called talazoparib.
Drug major Pfizer Inc.
On Friday, Medivation shared stopped trading in NY at $67.16.
The purchase of Medivation, if approved by regulators, would be Pfizer’s biggest buy since it bought the medical device company Hospira past year for $17 billion, a report by AFP stated.
Pfizer expects to finance the transaction with existing cash. Medivation rejected that bid, but it wasn’t long before it was fielding other offers and analysts were speculating about possible buyers, including reports that Pfizer – which in April terminated its merger with Allergan after the US Treasury released new rules – was in the mix.
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.
Pfizer is optimistic that the deal will add $0.05 cents per share to its earnings in the first full year itself after closing.
Medivation’s founder and chief executive David Hung said Pfizer was the ideal partner to extend the reach of the company’s Xtandi franchise and take its late-stage assets – talazoparib and pidiluzimab – to their next stages of development. “It would end months of bidding for San Francisco’s Medivation, one of the most desired independent biotech companies because it sells a leading prostate-cancer drug”.
Advertisement
Pfizer has sought expansion of its oncology medications, and a blockbuster drug such as Xtandi will complement Pfizer’s breast cancer treatment Ibrance. The company already acquired a stake in kidney treatment drug firm a few years back. CEO David Hung says he made a decision to found the company after watching a 28-year-old breast-cancer patient die during his oncology fellowship.
